High unemployment rate "new normal" for U.S., says Stiglitz   2010-10-07 05:20:55 FeedbackPrintRSS

by Xinhua writer Yang Lei

NEW YORK, Oct. 6 (Xinhua) -- Even if U.S. economy manages to grow, it will be too slow to provide enough jobs needed and high unemployment rate will be a new normal for Americans, said Nobel laureate Joseph Stiglitz on Wednesday.

Speaking at the 7th World Business Forum, an annual symposium regarded as the world's most influential management forum, in New York, Stiglitz warned that the U.S. economy is "still not out of the woods yet" and even risks slipping into a Japanese-style malaise.

Asked how he sees conditions one year from now, Stiglitz said that the economy probably is not going to be a disaster, and there may be positive growth. But, he continued, the growth will be too slow compared with demand for jobs, and the unemployment rate will possibly stay above nine percent, or even ten percent.

"Much higher unemployment is the new normal," he said.

Although the recession officially ended in June 2009, as the U. S. National Bureau of Economic Research announced last month, main street has not experienced the comeback as their Wall Street counterparts, and jobless rate has remained at record-high levels.

Economists are expecting zero jobs growth and an unemployment rate inching up to 9.7 percent from 9.6 percent in the most- watched September jobs report, which is scheduled to be released this coming Friday.

Unlike many who criticized the Obama administration's stimulus measures, Stiglitz said the first stimulus package did work, helping prevent unemployment rate from soaring to 13 percent. But it was too small and was not well-designed, Stiglitz said.

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Editor: yan
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