WASHINGTON — Even as the nation's economy begins clawing its way out of the worst recession in 60 years, there are growing signs that this recovery could come with an unsettling twist: The wheels of commerce may begin to turn again without any substantial boost in jobs.
Not only is the national unemployment rate, now 9.4%, likely to climb into double digits later this year, but it is also expected to remain there well into 2010, economists say. That would prolong the misery of the unemployed, squeeze retailers and other businesses, and add millions of dollars in government costs and lost productivity. It could even threaten the recovery itself.
Though it's common for the jobless rate to keep climbing for a time after economic output turns positive, the aftermath of the last two downturns, in 1990-91 and 2001, introduced the idea of a "jobless recovery." Even though the economy improved, many unemployed workers discovered that jobs as good as the ones they'd lost were almost impossible to find.
This time, many economists say, there are new factors that could make the problem worse. Many more layoffs in this recession have been permanent, not temporary.
And mass layoffs are continuing at a record pace; in May they cost nearly 313,000 workers their jobs. Since the recession began in December 2007, the U.S. economy has shed 6 million payroll jobs. That tally is expected to grow today when the Labor Department releases the June employment figures.
Also, instead of shrinking operations, companies have shut down whole business units or made sweeping structural changes: General Motors Corp. and Chrysler, for example, closed hundreds of dealerships. Citigroup Inc. and Bank of America Corp. cut tens of thousands of positions.
In addition, workers who survived job cuts are, on average, working fewer hours per week than ever before, according to Labor Department statistics. That means employers, even when they feel confident enough about the recovery to expand, will begin by giving more hours to existing employees instead of hiring new ones.
More troubling still is the outlook for consumer spending, the main driver of the U.S. economy. If people don't spend, many businesses simply won't have the means or the need to hire employees.
Indeed, the depth of this recession, plus widespread expectations that unemployment will keep rising into 2010 and remain high thereafter, may exert a powerful drag on the recovery.
