Hiring unlikely to rebound even as economy does

By Don Lee • LOS ANGELES TIMES • July 4, 2009

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 9.5 percent, likely to climb into double digits later this year, it is 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.

While 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 found that jobs as good as the ones they had 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 June they cost nearly 467,000 workers their jobs. Since the recession began in December 2007, the U.S. economy has shed nearly 6.5 million payroll jobs.