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‘The longest stretch of high unemployment in this country since the Great Depression’

By Ezra Klein,

So says the CBO:

The rate of unemployment in the United States has exceeded 8 percent since February 2009, making the past three years the longest stretch of high unemployment in this country since the Great Depression. CBO projects that the unemployment rate will remain above 8 percent until 2014. The share of unemployed people who have been looking for work for more than six months — referred to as the long-term unemployed — topped 40 percent in December 2009 and has remained above that level ever since.

I’ll take the under on that projection, by the way. I think unemployment will fall below 8 percent in 2013, and perhaps even in 2012. As for the “why” of our persistently high unemployment, “slack demand for goods and services (that is, slack aggregate demand) is the primary reason for the persistently high levels of unemployment and long-term unemployment observed today, in CBO’s judgment.”

More here.

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