these economies remains far below the levels implied by pre - crisis trends. in contrast, economic activity in the emerging market economies has not only fully made up the losses induced by the global recession, but is also rapidly approaching its pre - crisis trend. to cite some illustrative numbers, if we were to extend forward from the end of 2007 the 10 - year trends in output for the two groups of countries, we would find that the level of output in the advanced economies is currently about 8 percent below its longer - term trend, whereas economic activity in the emerging markets is only about 1 – 1 / 2 percent below the corresponding ( but much steeper ) trend line for that group of countries. indeed, for some emerging market economies, the crisis appears to have left little lasting imprint on growth. notably, since the beginning of 2005, real output has risen more than 70 percent in china and about 55 percent in india. in the united states, the recession officially ended in mid - 2009, and – as shown in figure 3 – real gdp growth was reasonably strong in the fourth quarter of 2009 and the first quarter of this year. however, much of that growth appears to have stemmed from transitory factors, including inventory adjustments and fiscal stimulus. since the second quarter of this year, gdp growth has moderated to around 2 percent at an annual rate, less than the federal reserve ’ s estimates of u. s. potential growth and insufficient to meaningfully reduce unemployment. and indeed, as figure 4 shows, the u. s. unemployment rate ( the solid black line ) has stagnated for about eighteen months near 10 percent of the labor force, up from about 5 percent before the crisis ; the increase of 5 percentage points in the u. s. unemployment rate is roughly double that seen in the euro area, the united kingdom, japan, or canada. of some 8. 4 million u. s. jobs lost between the peak of the expansion and the end of 2009, only about 900, 000 have been restored thus far. of course, the jobs gap is presumably even larger if one takes into account the natural increase in the size of the working age population over the past three years. of particular concern is the substantial increase in the share of unemployed workers who have been without work for six months or more ( the dashed red line in figure 4 ). long - term unemployment not only imposes extreme hardship on jobless people and their families, but, by eroding these workers ’ skills

and weakening their attachment to the labor force, it may also convert what might otherwise be temporary cyclical unemployment into much more intractable long - term structural unemployment. in addition, persistently high unemployment, through its adverse effects on household income and confidence, could threaten the strength and sustainability of the recovery. low rates of resource utilization in the united states are creating disinflationary pressures. as shown in figure 5, various measures of underlying inflation have been trending downward and are currently around 1 percent, which is below the rate of 2 percent or a bit less that most federal open market committee ( fomc ) participants judge as being most consistent with the federal reserve ’ s policy objectives in the long run. 1 with inflation expectations stable, and with levels of resource slack expected to remain high, inflation trends are expected to be quite subdued for some time. monetary policy in the united states because the genesis of the financial crisis was in the united states and other advanced economies, the much weaker recovery in those economies compared with that in the emerging markets may not be entirely unexpected ( although, given their traditional vulnerability to crises, the resilience of the emerging market economies over the past few years is both notable and encouraging ). what is clear is that the different cyclical positions of the advanced and emerging market economies call for different policy settings. although the details of the outlook vary among jurisdictions, most advanced economies still need accommodative policies to continue to lay the groundwork for a strong, durable recovery. insufficiently supportive policies in the advanced economies could undermine the recovery not only in those economies, but for the world as a whole. in contrast, emerging market economies increasingly face the challenge of maintaining robust growth while avoiding overheating, which may in some cases involve the measured withdrawal of policy stimulus. let me address the case of the united states specifically. as i described, the u. s. unemployment rate is high and, given the slow pace of economic growth, likely to remain so for some time. indeed, although i expect that growth will pick up and unemployment will decline somewhat next year, we cannot rule out the possibility that unemployment might rise further in the near term, creating added risks for the recovery. inflation has declined noticeably since the business cycle peak, and further disinflation could hinder the recovery. figure 5 shows core and trimmed - mean measures to better display the decline in underlying, or trend, inflation. total inflation measures have been volatile in recent years but are