Tags: summers | unemployment

Summers: Unemployment Will Climb Higher

Thursday, 09 Apr 2009 02:43 PM

The US unemployment rate is expected to rise above its current 25-year high in the recession-mired economy, the top White House economic adviser, Lawrence Summers, said Thursday.

"I don't think we can hold out the prospect that unemployment would stabilize at the current level," Summers said, speaking to the Economic Club of Washington.

The US unemployment rate jumped in March by 0.4 percentage point from February to 8.5 percent, its highest level since November 1983.

"Unemployment lags a little bit what happens to real economic activity," said Summers, who leads the National Economic Council that advises President Barack Obama on the economy.

"In order to get to keep the unemployment rate constant, gross domestic product (GDP) has to grow at a rate that economists argue all the time about ... somewhere in the range of 2.5 percent," he said.

Thus growth of 1.0 percent would see rising unemployment, he added.

The White House budget plan released in February projects a 1.2 percent GDP contraction for this year.

Summers declined to speculate on how high the jobless rate would rise.

"There are seven cameras there, which means there are seven too many for me to provide a number for the number at which it might be likely to peak," he said.

Summers is a former president of Harvard University and ex-treasury secretary in the Clinton administration,

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