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Federal Reserve Bank of San Francisco
FRBSF Economic Letter
Jobless recovery redux?
Mary C. Daly
Bart Hobijn
Joyce Kwok
Abstract

Although the pace of layoffs appears to be subsiding and the overall economy is showing hints of stabilization, most forecasters expect unemployment to continue to increase in coming months and to recede only gradually as recovery takes hold. In this Economic Letter, we evaluate this projection using data on three labor market indicators: worker flows into and out of unemployment; involuntary part-time employment; and temporary layoffs. We pay particular attention to how these indicators compare with data from previous episodes of recession and recovery. Our analysis generally supports projections that labor market weakness will persist, but our findings offer a basis for even greater pessimism about the outlook for the labor market. Specifically, we suggest that the relatively low level of temporary layoffs and high level of involuntary part-time workers make a jobless recovery similar to the one experienced in 1992 a plausible scenario.


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Mary C. Daly & Bart Hobijn & Joyce Kwok, "Jobless recovery redux?" , Federal Reserve Bank of San Francisco, FRBSF Economic Letter, number 18, 2009.
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Keywords: Unemployment ; Labor market
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