The document summarizes that slow economic growth is expected to continue for years due to the recession. While signs of recovery exist, capacity utilization in the US remains well below historical averages and population aging and stagnant employment levels mean productivity gains alone will not offset these factors. The Federal Reserve also noted in a recent statement that low resource utilization justified keeping interest rates exceptionally low.

1. Slow growth for years to come
 Even though there are signs of a recovery, the recession is likely to result in years with slow growth
 Look at the US: Capacity utilization is way below the long-term average; the population is ageing,
payroll employment is stagnating (see table); productivity gains at 2% since 2006 not enough to offset this
 The Fed in its latest statement noted that „low rates of resource utilization“ were the main justification
for staying at exceptionally low rates
Percent U.S. Payroll Millions
88 employment of
Recession
Total Persons
84 nonfarm
Historic average - 1948 to present
Oct 2002 130.3
80
Oct 2003 130.1
76
Oct 2004 132.1
72 Manufacturing Oct 2005 134.3
68 Capacity 67.5 Oct 2006 136.5
Utilization Rate Oct 2007 137.8
64
98 99 00 01 02 03 04 05 06 07 08 09 Oct 2008 136.3
Oct 2009 130.8
Source: www.dallasfed.org
Source: Bureau of Labor Statistics
Nov. 14, 2009
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