Why unemployment may never drop to 5 percent

Published: Wednesday, April 4 2012 12:00 p.m. MDT

In this March 20, 2009, file photo, job applicants make their way through a rope line to attend the CUNY Big Apple Job Fair in New York.

Mark Lennihan, AP

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The unemployment rate has dropped considerably in the past six months, but some people believe low unemployment is just a thing of the past, according to CNN Money.

Economist and Nobel Prize winner Edmund Phelps thinks having an unemployment rate of 5 percent is nothing short of a "pipe dream," according to the article. Factoring into the problem: The U.S. has to deal with competition from low-wage countries, more efficient technology exists, and few Americans have high-tech skills.

"Many workers do not have the skills required by employers in the location where employers are seeking jobs," said John Silvia, Wells Fargo chief economist, in a research note.

Economists surveyed by CNN Money think the unemployment rate for the month of March will stay at 8.3 percent, according to the article. The report will be released on Friday.

But not everyone is that pessimistic about the economy. Chairman of the Federal Reserve Ben Bernanke thinks the unemployment rate will drop to around 5 or 6 percent after 2014, as part of the regular business cycle, according to CNN Money.

EMAIL: bbullock@desnews.com

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