For those with a glass-half- full view of the U.S. economy, Friday's jobless report released by the Labor Department was good news -- at least
the unemployment rate didn't rise.
But here's the bad news: unemployment in the United States is likely to remain high in 2010, and possibly for the next few years, experts said.
"The report was disappointing," said Barry Bosworth, a former presidential advisor and senior fellow at the Brookings Institution.
"The employment losses are largely stopped but there are no signs of a strong recovery," he said.
On Friday the Department of Labor reported that December's unemployment numbers held steady at 10 percent, dashing economists ' hopes that jobless rates would start declining.
While employment growth will turn positive within a few months, unemployment is unlikely to decline much before mid-year and is likely to drop to 9.5 percent at the end of 2010, Bosworth said. And that means a hard road ahead for the jobless.
Ben Carliner, director of research at the Economic Strategy Institute, said Friday's figures showed how weak the labor market remains.
Not only is the unemployment rate unchanged, the labor force participation rate -- working-age individuals who are either employed or looking for work -- dropped to 58.2 percent, he said.
"This means that last month alone over 600,000 people simply gave up looking for work because they were so pessimistic about their employment prospects," he said.
"So it's clear that the economy has not yet started to create net job growth, and the risk remains that we will experience a jobless recovery," he said.
With weak consumer demand and the banks continuing to be cautious about lending, the federal government must continue its stimulus measures in order to stimulate job growth and get
the economy moving again, Carliner said.
Others, however, said the opposite, contending that the stimulus measures represent too much regulation and new taxes are making companies uncertain about the future and reluctant to take on new hires.
Much depends on the types of policies that Washington adopts over the next few months, he said.
Some economists even fret that the United States could see a double dip recession -- a second plunge after a short rebound in 2010, although it may not be as severe as last year's
economic nosedive.
Others take a more positive view.
Robert Johnson, associate director of economic analysis at Morningstar, an independent research provider, said while the numbers are somewhat disappointing, they are far from
catastrophic.
Johnson forecasted that unemployment will drop to 9 percent -- a somewhat more optimistic prediction than the
9.6 percent consensus -- by year's end and doubts unemployment will rise.
Auto sales, which are crawling out of the recession, show positive signs and will boost the economy if they can be sustained, he said.
In December, U.S. auto sales in the United States climbed to 11. 2 million, according to Edmunds.com -- an increase from 9.1 million at the low point earlier last year but far from
the time when auto sales were more than 16
million a year.
And labor productivity is booming -- rising at a 6.9 percent annualized rate in the second quarter and an 8.1
percent annualized rate in the third quarter, he noted.
There have been other bright spots, as the country gained 4,000 jobs in November, according to revised data from the Department of Labor released Friday -- the first such increase in
nearly two years.
Temporary employment, which usually rises before companies start hiring full time employees again, is up,growing by 47,000 in December.
Still other statistics bode ill for those feeling the sting of unemployment in this worst recession since the 1930s.
Heidi Shierholz, economist at the Economic Policy Institute, noted that while layoffs are slowing, hiring is not picking up either.
And there are signs that unemployment stints are lasting longer -- December saw record highs in both the average length of unemployment -- 29.1 weeks -- and the median number -- 20.5 weeks.
In December, an additional 229,000 jobless individuals moved into the category of those who have been unemployed for more than six months. That makes 6.1 million, or 4 percent of
the total labor force and is far more than the 2.6 percent high set in June 1983, Shierholz noted.
The total number of unemployed people in the country is 15.3 million.
Even worse, the unemployment rate, which stands at 10 percent, provides a layer of sugar coating when compared to the underemployment rate -- a measure of part-time workers who would prefer full-time work.
That index has doubled since the start of the downturn and rose slightly since last month, with 27 million workers, or 17.3 percent of the U.S. labor force, who were either unemployed
or underemployed in December.
"The unemployment rate understates weakness in the labor market by excluding both the jobless who want work but have given up actively looking and people who are working but can't get
the full- time hours they want," she said.