How Long Until the Job Market Bounces Back?
The recession came to an end in June 2009, but employees are still feeling the effects of the weak economy and, according to experts, it may take even longer to bounce back than expected.
Dr. Christy Huebner Caridi, director of the Marist College Bureau of Economic Research, said that it is without a doubt that employees are faced with a poor job market but, despite the announcement that recession is long over, it will take time for the job market to bounce back.
"The unemployment rate remains very high by historical standards," Caridi says. "There is very little to suggest significant improvement in the near future."
The country's current unemployment rate stands at 9 percent, according to the U.S. Bureau of Labor Statistic. In addition to many workers being unemployed, there are about 9.2 million workers who are employed part-time for economic reasons, or "involuntary part-time workers," adds Caridi. This brings light to the fact that even those who are employed are still struggling due to the recession and the number could increase as families head into the holiday season.
But when can workers start to see the light at the end of the tunnel? Caridi says that it is hard to judge since it has taken the economy longer to re-hire the pre-recession labor force since 1990.
"The job market will not return to 'normal' until the demand for goods and services returns to 'normal,'" she says.
Caridi adds that consumer confidence determines how long it will take for the economy to bounce back. Currently, consumers are still struggling despite their employment status; it is unsure when that confidence will grow in society. When workers do not feel confident about the job market, that has a direct effect on employment.
"Confidence does not tend to rise until the unemployment rate shows consistent improvement, [yet] unemployment does not tend to decline until consumer confidence improves," Caridi says. "This feedback loop is significant and is one of the primary reasons why government intervention is necessary."
Caridi points out that one area where consumers lack confidence is the housing market; with weak housing prices, upside-down mortgages, foreclosures and personal bankruptcies, these together have "diminished the mobility" of employees -- which in turn translates into longer periods of unemployment.
Unemployment has created a "buyer's market," says Caridi, so job security has suffered as well during the recession. In particular, manufacturing jobs are on a decline while the service sector such as health care and retail jobs have shown recent gains.
For the most up-to-date information on which industries are growing and where jobs are being cut, workers can consult the U.S. Bureau of Labor Statistics.