Unemployment Will Be High for Several Years

Employers cut a net total of 190,000 jobs in October, the government said last week and until companies are willing to hire, the unemployment rate is likely to keep rising from its current level of 10.2 percent, the highest in 26 years.

US unemployment, now in the double digits, may remain “high” for several years and dampen economy recovery from a brutal recession, a regional central bank official warned Tuesday.

Job openings are in the lowest levels, according to government and private surveys released yesterday, a trend that could keep the unemployment rate high even as layoffs slow.

Small businesses in particular are reluctant to add workers as they struggle to obtain credit. Many are pushing their current employees to produce more. Economists say small businesses account for about 60% of new jobs.

The department’s Job Openings and Labor Turnover survey said employers advertised about 2.5 million job openings at the end of September, up slightly from the previous month. That is down from a peak of 4.8 million openings in June 2007.

The increase in joblessness came even as analysts say the economy grew by 3.5 percent in the July-September quarter.

Many economists worry the U.S. will experience a jobless recovery. That happened after the last two recoveries in 1991 and 2001, when the unemployment rate didn’t peak until 15 months and 19 months, respectively, after those recessions ended.

“In both cases, output growth was less robust than in the typical recovery and, unfortunately, things seem to be shaping up similarly this time around,” said Janet Yellen, president of the Federal Reserve Bank of San Francisco.

The National Federation of Independent Business said Tuesday that small companies remain skeptical about the recovery.

Its Index of Small Business Optimism rose 0.3 points to 89.1 last month, the third straight increase but still below the 94.6 reading in December 2007.

Small businesses are reluctant to hire or invest in expansion, the monthly survey found. 16% of the survey respondents plan to cut jobs over the next three months, while only 9 percent plan to hire.

Many small businesses also are still having a hard time getting loans, the report said.

The Americano / Agencies

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