High U.S. Unemployment Rates Could Continue for Years to Come
In a sobering moment at Wednesday's Congressional testimony, Ben Bernanke stated that the U.S.'s economic outlook was "unusually uncertain." Following the passing of an unemployment benefits extension for workers who have expired their initial 26 weeks of benefits, but haven't used up the 99-week total extension, Bernanke's comments sent stocks shooting down on Wednesday and increased many's fear that the economic job situation won't be improving any time soon.
Even with the numbers from the June Jobs Report - in which President Obama reported that 600,000 private sector jobs had been added to the economy, as opposed to the 3.7 million jobs that were lost last year - showing an increase, many are realizing how tough the road to recovery will be.
Bernanke went on to say that "This is the worst labor market, the worst episode, since the Great Depression. Not only for the sake of the unemployed and for the short-term strength of the economy but also for a long-term viability in international competitiveness, I think we need to be very seriously concerned."
Economists state that a healthy economy typically holds a 5% unemployment rate. With a current employment rate at 9.3%*, Bernanke speculated that the unemployment rate will hold strong at around 7% or higher until 2012. With around half of unemployed U.S. workers being long-term jobless (over six months of unemployment), that percentage will likely rise exponentially if Bernanke's thoughts are correct and the country does suffer from an extended bout of increased unemployment.
*Unemployment rate as of today