The US unemployment rate is still more than double its pre-crisis level and there is an increasing risk that the labour market recovery has stalled or could even go into reverse. The US unemployment rate shot up from its pre-crisis level of 4.4% to reach a peak of 10% in the fourth quarter of 2009. While unemployment has since eased to 9.1%, it is still more than double its pre-crisis level and the labour market recovery appears to have stalled. The trajectory of the OECD average unemployment rate has been similar to that of the US rate, except that the initial rise in OECD unemployment was less dramatic.
Although many details remain to be spelled out, the American Jobs Act recently proposed by the Obama administration clearly recognises the need for further action to tackle the danger that high unemployment could become entrenched. The tax credit for businesses tied to increases in their total payroll over its level one year earlier is among the most promising measures included in this package.
OECD Employment Outlook 2011