Ben Bernanke suggests many employers laid off out of fear in 2008 and 2009 and are now making up for the extensive cutbacks, but suggests the 200K-plus jobs we've seen added (job growth for 24 consecutive months) each month for the past three months may just be a short term blip.
But over the past six months, the U.S. unemployment rate has surprised economists by rapidly falling to 8.3 percent from 9.1 percent even as the economy has yet to get back up to pre-recession speed. According to the textbooks, that’s not supposed to happen.
The unexplained drop has touched off a debate among dismal scientists, who have gone back to their chalkboards to try to figure out what is happening.
Federal Reserve Chairman Ben Bernanke recently sought to reassure his fellow forecasters that their textbooks weren’t out of date. In a widely followed speech, Bernanke argued that the unexpected, sudden drop in the jobless rate may simply represent the flip side of an equally extraordinary surge in layoffs in 2008 and 2009, as employers hunkered down after the worst financial collapse since the Great Depression.
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Now that the worst of the crisis has passed, Bernanke suggested, employers have quickly reversed course and brought some of those workers back onto their payrolls. The result, in effect, is a short-term surge in hiring that doesn’t represent the longer-term pace of job creation.
more at msnbc
