While the "natural rate of unemployment" in the United States is 5.2 percent according to the CBO, unemployment is currently over 9 percent. How long it will take us to return to this natural rate? The chart below, courtesy of the conservative think-tank the Heritage Foundation, compares recent rates of job growth in terms of jobs added per month to determine when unemployment will hypothetically return it the natural level, and the results are mixed. The takeaway: we're going to be looking at higher than average unemployment for a while yet.
If job growth continues at the same rate it has for the last twelve months--122,000 jobs added a month--it might take decades to return to the natural rate, the report says. Even if job growth accelerates to a rate comparable to the peak of job growth in the first tech boom--216,000 jobs added a month in 1997--unemployment still wouldn't return to 5.2 percent until October 2015. Or a return to the 176,000 jobs added a month between 2003 and 2007, only brings us back to the natural rate by 2018.
Those are all long time frames both for people trying to find jobs and for politicians looking to keep them. By 2018 for example, we'll have had two more presidential elections, and the unemployment rate is typically seen to be crucial for the success of the ruling party. At the same time, it's possible these numbers are overly pessimistic: Heritage has come under fire recently for some politicized unemployment projections. Either way, these undeniably sobering numbers are a reminder that we're going to be dealing with a compromised employment picture for a while