SAN FRANCISCO — Former Federal Reserve Chairman Alan Greenspan predicted Sunday that the nation's unemployment rate is likely to top 10 percent in coming months before the situation begins to improve.
In an appearance on ABC's "This Week" with George Stephanopoulos, Greenspan said there are some signs the economy is starting to improve. But until companies create a substantial number of new jobs, the unemployment figure is likely to continue to rise in the near future, he said.
Pointing to the fact that businesses laid off "a very substantial number of people" when the financial markets collapsed last year, Greenspan said the country got productivity gains "of horrendous amounts," which cannot continue.
"So the silver lining is, at some point, we're going to start to see an improvement in employment," Greenspan said, according to a printed transcript of the program. "But remember that unless there is a monthly increase of more than 100,000 a month, you've still got the unemployment rate continuing to rise."
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He said that while the economy is likely to show stronger-than-expected growth for the third quarter, that does not mean unemployment will go down immediately.
"My own suspicion is that we're going to penetrate the 10 percent barrier and stay there for a while before we start down," he said.
Greenspan's remarks came just two days after the Labor Department reported an unemployment rate of 9.8 percent, the highest jobless figure since 1983.
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