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UPDATED: May 17, 2011 Web Exclusive
U.S. Labor Recovery Will Take Five More Years
The unemployment rate in the United States is still quite high and it will take four to five years for the recovery of the labor market
By CHEN WEN
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A man holds a "I want to work" placard as he joins a protest of several thousand people and unionists demanding jobs outside City Hall in Los Angeles on August 13, 2010 (AFP PHOTO) 

The economic recovery in the Unites States remains weak and it will take four to five years to return to an overall healthy labor market, said U.S. economists.

"Generally we're now on a durable track [of recovery], but we're going much slower than we historically had recovered from recessions," said Roger Altman, former Deputy Treasury Secretary under Bill Clinton, at the China Business News New York Forum on May 12.

Altman said that the unemployment rate in the United States is still quite high and it will take four to five years for the recovery of the labor market. But he pointed out that the increase of jobs in the private sector last month is a good indicator that the economic recovery is on track.

Data showed that despite a rise in the unemployment rate from 8.8 percent to 9 percent in March, the U.S. private sector added 268,000 jobs in April, the largest number since 2006. This is viewed by many economists as a confirmation that growth will accelerate.

Private sector employment data is more important than general unemployment data, said Edmund Phelps, Professor of Political Economy at Columbia University and winner of the 2006 Nobel Prize in Economics. General unemployment rates can increase rapidly whenever there is surge of people reentering the labor force, said Phelps.

Housing activity is still very low relative to previous periods, said Paul Sheard, Global Chief Economist and Global Head of the Economic Research at Nomura Securities.

According to Sheard, housing accounted for 6.3 pecent of GDP in normal terms at its apex when the housing bubble burst in 2008, while that number is only 2.2 percent now, which is "incredibly low." That's one of the contributors to the still high unemployment rate, because a lot of people who were employed by the housing sector two or three years ago cannot find jobs now.

(Reporting from New York)



 
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