Hiring might not rebound in an economic recovery

By Don Lee
July 2, 2009 Reporting from 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.