El-Erian: Long-Term Unemployed Remain a Major Problem

Mohamed El-Erian believes the "New Normal" in unemployment will stick around for at least one more year. Appearing on CNBC's Squawk Box, PIMCO's CEO and co-CIO said that the 5 million long-term unemployed remained a huge issue to be solved before we can talk about the narrative changing on the unemployment. "To get to the stage, we need different policy issues," El-Erian says. "But we are unlikely to get that for this year at least, as politics in Washington are so polarized currently." "The length [of the "New Normal"] depends on policy makers," he continues. "Policy makers have been postponing the deleveraging, which makes this journey even more challenging." "That is why we have this tug of war between macros and the really robust corporate sector," he concludes. "It is the policy wedge that speaks to this tug of war."