The US economy will likely start growing again in the second half of this year but unemployment will likely keep rising through 2010 to peak over 10 percent, the Congressional Budget Office (CBO) said on Thursday.
"The growth in output later this year and next year is likely to be sufficiently weak that the unemployment rate will probably continue to rise into the second half of next year and peak above 10 percent," CBO Director Douglas Elmendorf said in prepared testimony to the US House Budget Committee. It will likely take several years for the unemployment rate to fall back to levels seen before the recession hit, in the neighbourhood of 5 percent, he said in the prepared remarks.
The CBO, a non-partisan arm of Congress, conducts analysis on a range of subjects, including the budget. The most severe US recession in decades has already cost over 5 million jobs since it began in December 2007 and the unemployment rate hit 8.9 percent in April, the highest since September 1983.