Lawrence Summers Expects Unemployment To Remain A Lasting Problem

Lawrence Summers, the director of the White House National Economic Council, said today that unemployment will remain a lasting problem in the U.S. even as job growth will increase faster-than-expectation as the U.S economy recovers from the worst economic downturn since The Great Depression.

Speaking at a conference in Washington, Summers said the correlation used to gauge unemployment in relation with the GDP broke down during the recession. He added that during the economic downturn the rate of unemployment increased faster than the slowdown in GDP and as the economy recovers employment will grow faster than GDP growth would indicate.

According to the Wall Street Journal, Summers said that “even on optimistic assumptions” the U.S. economy will see substantial spare capacity.