Thursday, September 17, 2009

Paul Krugman: U.S. Unemployment to Peak in 2011

Another Nobel Prize in Economics adds to the bleak projections for the U.S. This time, it's Paul Krugman, 2008 Nobel prixe winner, Princeton Professor and New York Times writer.

He says unemployment will peak only in early 2011 because of a slow and painful recovery from the global economic crisis. He adds that the global economy seems to be stabilizing at a level that is "unacceptably poor".

"(U.S.) unemployment will peak in early 2011 ... certainly staying very high and possibly rising all next year." [...] the acute phase of the global crisis had passed but the recovery is likely to feel like a continuing recession." "[...] recoveries have been weak from past crises in the United States and other regions as job sectors continued to get worse long after the crises have bottomed out, adding the global job market will continue to get worse well into 2011."

He says the the effects of stimulus programs will start to fade early next year.

He states that governments should help people retain jobs, essential income, social services and health care. He suggests boosting global investment in green technology and getting serious about climate change as that "could help sustain demand".

Unemployment in the U.S chart:

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