High unemployment not the "new normal": Romer

[The Northerner]

WASHINGTON (Reuters) - The fragile economy is on the path to recovery but is still far from back to normal, White House economist Christina Romer said on Saturday.

Romer, chairwoman of President Barack Obama's Council of Economic Advisers, said the signs were improving but the economy is still suffering from a shortfall of aggregate demand as it emerges from what has been termed the Great Recession.

"By almost every indicator, the U.S. economy is finally on the road to recovery," Romer said at Princeton University in New Jersey. But citing a March jobless rate of 9.7 percent, she cautioned: "When it comes to the economy we are very far from normal."

Obama has made job creation a top priority, mindful that persistently high unemployment could mean heavy losses for his Democrats in November's congressional elections.

While acknowledging serious concern that some Americans face long-term unemployment, Romer pushed back against economists who have asserted that high joblessness is now built into the economy and has become the "new normal."

"The overwhelming weight of the evidence is that current very high and very disturbing levels of overall and long-term unemployment are not a separate structural problem but largely a cyclical one," Romer said in her speech. "That is far from being the 'new normal,' it is the 'old cyclical,'" Romer said.

Read more: http://www.reuters.com/article/idUSTRE63G1GR20100417

[virgogal]

1. My well-educated daughter with 15 months jobless would sure

have an opinion on this.

[DCBob]

2. Thank goodness the administration is not accepting high unemployment as "normal"..

Even though the economy is growing and companies are showing good profits. A jobless recovery is really not a recovery.

[DJ13]

3. Its not just high unemployment thats the problem

For too many years now we kept unemployment "low" by replacing solid middle class jobs with low wage service jobs.

Just returning to a lower level of unemployment isnt sufficient anymore, we need good paying jobs....even if that means Wall Street has to settle for a "new normal" of less than record profits in the process.

[laughingliberal]

4. Yes. It's like the joke during the Bush years. People would say the economy created a lot of jobs.

I have 3 of them.

[SocialistLez]

6. +1

I want solid middle class jobs, not these $8.00 an hour Wal-Mart jobs with no benefits or temp jobs.

[nickinSTL]

5. "Obama has made job creation a top priority"

Really?

Sorry to be skeptical, but I'm not really seeing a major push to create new jobs. Not on the scale we need.

My wife has been essentially unemployed - and not by choice - since 2001. She has 10 years experience as a programmer, and is also a professional-level graphic artist. And until the census job she has now, she's worked "as needed" for an electrician for the past couple years - and there was very little work from that job in the past year.

Once the census job is over, I expect we'll be back to struggling financially, unless she can actually find something permanent.

I also have a friend in Chicago who has been unemployed for a year - she's currently working a longer-term temp assignment while someone is out for surgery, but has had less than two weeks of work in a year aside from this current temp job. She's well educated and competent, but isn't having much luck finding a permanent job.

[RM33]

7. The new normal is real

High unemployment is common in Europe. That is what is going to happen in the US. As the government raises the cost of doing business in the US, companies will seek better pastures else where. That is why outsourcing and off shoring is so popular.

Why hire an American at 8 dollars an hour when can hire a third world person at 1 dollar an hour.

[eridani]

8. If they put as many people in jail as we did per capita, their unemployment rate would drop a lot

Building and staffing prisons, and keeping low-level drug offenders out of the unemployment statistics would improve their formal numbers a lot.