Unemployment Rate Could Grow Until 2010
Unemployment could continue to grow in the United States until 2010, according to a study of analysts conducted by Reuters. This will likely make the Federal Reserve keep interest rates unchanged through nest year.
Results of this investigation were made public after the Labor Department announced that the job cuts rose in June, more than was estimated.
Of 12 specialists from the Treasury, seven expects unemployment rate to continue to grow in the first semester of 2010. Four of them consider that the highest point will be reached at the end of 2009. Most believe that deflation is a greater threat to the economy than inflation.
President of the San Francisco Fed, Janet Yellen, said last week that one of the biggest risks of the U.S. economy would be the too much decreasing of inflation. Fed president of Saint Louis, James Bullard, estimated that risk deflation is diminished but not disappeared completely.
Most economists expect the U.S. GDP to grow in the third quarter of 2009. However, since the resumption of growth will be slow, no doubt that Fed will not raise interest rates before 2010, maybe even later.
Of 13 analysts, five considered that the interest rate will remain unchanged until the second half of 2010, five estimates that the rate will remain close to zero and for a longer period, and three are expected to increase it in the second quarter in 2010.
American employers have eliminated a number of jobs expectations over 467,000 in June, and unemployment reached its highest level in the past 26 years, 9.5 percent of the active population, has recently announced the U.S. Department of Labor.