RESEARCH TRIANGLE PARK, N.C. – Federal Reserve Chairman Ben Bernanke is not alone in saying that pain from the current recession is going to linger for many months. A jobless recovery seems at hand.

UNC-Charlotte economist John Connaughton issued on Tuesday and he warns that the recovery will be painful in that few jobs are going to be created.

"Job growth should once again begin in December of 2009, ending 22 months of decline," he wrote. But …

“For 2010 North Carolina establishments are forecast to add 22,700 net jobs, an increase of 0.6 percent,” Connaughton predicted.


In other words, unemployment is going to remain inn double digits. In fact, the economist predicted that the jobless rate will increase to 11.2 percent by this December, up from the current 11.1 percent.

While 11.2 is far better than 12 percent or higher as predicted by some economists such as N.C. State"s Michael Walden, the latest forecast from Connaughton is hardly worth celebrating.

Remember what Bernanke said Tuesday: "From a technical perspective, the recession is very likely over at this point," Bernanke said in responding to questions at the Brookings Institution. "It’s still going to feel like a very weak economy for some time because many people will still find that their job security and their employment status is not what they wish it was."

Try "pray" instead of "wish," sir.

Reading the Connaughton forecast is grim reading at best.

• “Gross State Product is expected to decrease by 1.5 percent over the 2008 level. The GSP decline in 2009 represents the second year of decline in this recession and is a greater decline than that experienced in 2008.”

• “Overall, the North Carolina economy is expected to decline during the first two quarters of 2009. In the first quarter, GSP decreased by an annualized real growth rate of 6.4 percent.”

• “During the second quarter, GSP is again expected to decline at an annualized real rate of -0.4 percent.”

Some good news:

“In the third quarter GSP is expected to grow for the first time in six quarters at an annualized real rate of 3.3 percent. For the fourth quarter, North Carolina GSP is expected to continue the recovery and expand by an annualized real rate of 2.5 percent.”

Growth is good news for everyone who has a job and hopes to keep it. But for those drawing unemployment or are out of benefits.

“The question now is how strong and sustained the recovery will be?

“On the positive side, consumer confidence is rising, although still at very low levels, and the index of leading indicators has increased in each of the last three months,” Connaughton wrote. “In addition, interest rates remain low and the Federal stimulus package is beginning to come online.

“However, the banking sector, which is critical to recovery, remains troubled. The banking system increased their holdings of excess reserves from less than $2 billion in August 2008 to over $800 billion by December. Today they are still holding over $700 billion in excess reserves, and this is money that is not being lent out to facilitate the recovery.”

Connaughton forecasts growth in just two sectors of the economy this year – services (0.9 percent) and mining (1 percent).

At least transportation, warehousing, utilities and information will remain flat – not worsen.

Looking at 2010, Connaughton believes gross state product will increase at 2.8 percent in the first quarter. 2.2 percent in the second, 3.1 percent in the third and 2.3 percent in the fourth.

But job creation is simply not going to be strong. And that’s grim, grim news.