Higher Unemployment Rates, The New Norm?

Some economists are suggesting the so-called Great Recession could mean that a high jobless rate and lower standard of living for many Americans will become the "new normal."

Economists and policy makers say the job-creating mechanisms that helped dig the economy out of other recessions aren't in place now. The auto and construction industries helped lead the way out of recession before, but both have been trampled by this contraction.

Many small and midsize businesses, meanwhile, are still in the grips of the credit crunch, struggling to get loans and expand. And because of losses on homes and investments, higher income families aren't spending like they used to, while lower income families can't get credit to spend.

Mark Zandi of Moody's Economy.com says the unemployment rate could be "permanently higher." An Economic Policy Institute analyst says "things will come back," but she predicts elevated unemployment until at least 2014.

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