So where will the unemployment rate be at the end of 2011? One “no nonsense” financial blog I follow predicts it will be a little over 9%, so less than it is now, but not much better. Of course, there is a lot that can happen between now and then.
A big factor will be the GDP growth, and here is a little graph from Calculated Risk.
Real GDP Growth | Unemployment Rate in One Year |
0.0% | 11.2% |
1.0% | 10.7% |
2.0% | 10.2% |
3.0% | 9.8% |
4.0% | 9.3% |
5.0% | 8.9% |
6.0% | 8.3% |
Another important factor is going to be participation rate. There is really no way to know how many people will stop looking. Certainly we have an again population. That could contribute to a more people leaving the workforce. On the other hand, as jobs increase, we could see an increase in people re-entering the workforce.
It will be an interesting 2011, and let’s hope for the decrease in the unemployment rate!