Unemployment May Drop to 6% by Mid-2013, N.Y. Fed Study Finds

The jobless rate in the U.S. could drop to as low as 6 percent by the first half of 2013, a bigger decrease than most economists currently project, according to research from the Federal Reserve Bank of New York, reports Bloomberg.

The relationship between the number of Americans newly unemployed and those recently finding work indicates joblessness will continue to decline, according to economist Aysegul Sahin. The jobless rate held at a three-year low of 8.3 percent last month after falling by 0.8 percentage point in the year ended January, according to figures from the Labor Department.

“Simulations based on historical patterns suggest that the fall in the unemployment rate could be quicker than many forecasters predict,” Sahin wrote in a note on the bank’s Liberty Street Economics blog co-written by research associate Christina Patterson.

The analysis looked at flows into and out of unemployment since the end of World War II, likening it to water in a bathtub. The unemployment rate, or level of water in the tub, would be determined by the difference in the volume of water pouring in and draining out.

The number of those exiting unemployment, which include people finding a new job as well as those leaving the labor force, takes precedence in determining changes in joblessness at this stage of a recovery, the economists found.

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One response to “Unemployment May Drop to 6% by Mid-2013, N.Y. Fed Study Finds

  1. 2012 ECOSOC High Level Segment Open Call for Oral and Written Statements

    This year, 2012 ECOSOC High Level Segment will be held on 2 – 9 July, 2012. The theme is “Promoting productive capacity, employment and decent work to eradicate poverty in the context of inclusive, sustainable and equitable economic growth at all levels for achieving the MDGs”. The NGO Branch of the United Nations Department of Economic and Social Affairs is announcing an open call for written statements for the 2012 High Level Segment for NGOs in ECOSOC consultative status. Only NGOs in consultative status with ECOSOC (general, special, and roaster) may submit written statements.

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