Modest recovery could bring full employment.

• Position: Business Briefs

If the current economy rebounds with even half the momentum of previous recoveries, the U.S. could be looking at "full employment" within a year, according to an analysis by Watson Wyatt Worldwide. "Full employment" was defined as the level of employment that stops just short of creating inflationary pressures on wages, as defined by the Congressional Budget Office (CBO)

The analysis looked at unemployment during the current and past five recessions, as well as labor force growth and employment gains in the year following those recessions.

"A combination of relatively low unemployment during the downturn and historically low labor force growth projected for the coming year means that we may quickly see a return to full employment," says Sylvester Schieber, Ph.D., an economist and director of research at Watson Wyatt.

The analysis assumed that the number of people out of work peaked in January 2002 when the unemployment rate was 5.6 percent. By...