Predictions Vary For Economic Bounceback Unemployment is now at 9.4 percent and, because it's a lagging indicator, it's likely to get worse before it gets better. Assuming we are at or near the bottom of the recession, as some say, how long will it take to recover? Where will it recover first, and when it has recovered, what will that look like? Economists weigh in.
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Predictions Vary For Economic Bounceback

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Predictions Vary For Economic Bounceback

Predictions Vary For Economic Bounceback

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SCOTT SIMON, Host:

Now, this comes at a time when some parts of the economy are improving - the stock market, home sales in some places. What does all this mean for the employment picture? NPR's Yuki Noguchi reports.

YUKI NOGUCHI: Sometimes when it comes to economic numbers, optimism takes strange forms.

PETER CAPPELLI: It's hard to imagine losing 345,000 jobs is a good news story, but you know, in relative terms it probably is.

NOGUCHI: Peter Cappelli is a professor at Wharton Business School. He says employment lags behind economic improvement. So if job loss is slowing, it could mean the economy has already shifted gears.

CAPPELLI: My guess would be that if the banks were reasonably healthy today, the economy would pick up within five to six months.

NOGUCHI: Cappelli says the point is the question of whether we're in recovery all rests with the banks. This recession started there and so it by definition must also end there. And, he says, knowing the cause of the recession is a good thing. That's because when you can't pinpoint the cause of a downturn, it's harder to know when things are back to normal.

CAPPELLI: I think in a typical recession - and certainly in the last one, 2001 - it took a long time for jobs to come back. And the reason, the story went at the time, is employers were uncertain about whether the recovery was real or not, and as a result they didn't want to take on full-time workers.

NOGUCHI: But not everyone is so sanguine about a rapid recovery. Heidi Shierholz is an economist at the Economic Policy Institute, which studies issues affecting middle and lower income families. She looks at the same numbers and sees a potentially protracted recovery time for the job market.

HEIDI SHIERHOLZ: The threat of unemployment continuing to rise for another year, like maybe through all of 2010, is not insane.

NOGUCHI: Yuki Noguchi, NPR News.

SIMON: And this economic note out of Dallas: More and more people are going back to school to mix drinks. That is, a bartending school in Addison, Texas says its monthly applications have gone up by as much as 30 percent since December. Don Allen, a pilot, laid-off from a 40-year career, told the Dallas Morning News bartending is something I've had in the back of my mind for quite a while, something I might have done for fun one day. Well, here's looking at y'all.

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