The White House’s annual Mid-Session Budget Review assumes unemployment will not fall below nine percent until 2012. In other words, the White House believes we will continue to be in a virtual "jobless recovery." In fact, the White House expects unemployment to remain at seven percent until the start of 2014.
The unemployment rate is projected to average 9.7 percent in 2010. This is the average level of unemployment that has prevailed during the first six months of the year. Despite the growth in output, unemployment is projected to decline slowly because, as labor market conditions improve, discouraged workers rejoin the labor force, adding temporarily to unemployment, while part-time workers increase their hours of work.
Even with continued healthy growth in 2011 and beyond, the unemployment rate is projected to fall, but it is not projected to fall below six percent until 2015. Traditionally, an unemployment rate around four percent has been considered a sign of "full employment" conditions.
That is going to put pressure on every business selling products and services to consumers or business customers, and will increase pressure on firms to grow by acquisition, as internal customer growth and average revenue per user will be tough to come by.
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