U.S.A. Unemployment Rate May Reach 9.4%

The U.S.A. jobless rate will reach 9.4 percent this year and remain elevated through at least 2011, threatening the nation’s longer-term growth potential, a monthly Bloomberg News survey indicated.

The peak in unemployment surpasses the 8.8% estimated last month, according to the median of 54 projections in a survey taken from March 2 to March 9.

The average rate for the next two years will exceed the 25-year high of 8.1% reached in February, the survey shows.

"Even if things become less apocalyptic it doesn't mean the unemployment rate will come down," said Michael Feroli, an economist at JPMorgan Chase & Co. in New York.

"It'll be a long- term restraint on growth. Even when the economy gets back to normal, what's normal is going to be defined down."

The survey shows that the Obama administration's forecasts, submitted with its budget proposal last month, are out of kilter with those of most analysts.

The White House projected the jobless rate will decline to 7.9 percent next year; a worse performance means President Barack Obama's $787 billion stimulus plan may not prove sufficient, analysts said.

The unemployment rate in February was the highest since 1983, and employers cut 651,000 workers from payrolls, the government reported last week. The U.S. has already lost 4.4 million jobs since the recession began in December 2007.

Companies have been paring staff further in recent weeks:

Dow Chemical Co. said it'll eliminate 3,500 workers following its merger with Rohm & Haas Co. General Motors Corp. will cut 47,000 more positions globally, and FedEx Corp., the second-largest U.S. package-delivery firm, is axing 900 jobs in addition to more than 1,100 positions pared late last year.