U.S. jobs crisis could last until 2021: economist (2)

Long term unemployment -- defined as those out of work 27 weeks or longer -- remains a problem, with nearly 3 million long term jobless, December's jobs report found. What's worse, many are caught in a vicious cycle: the longer they remain unemployed, the harder it is to find work. That is because employers, rightly or wrongly, believe that skills erode when not used daily.

Still, there may be light at the end of the tunnel. Bernard Baumohl, chief global economist at the Economic Outlook Group and frequent guest on PBS' Nightly Business Report, said all the major metrics of the U.S. economy are pointed in the right direction, from the housing market to the health of banks to consumer finances.

He predicted the economy will come back to life this year, once Washington gets past its gridlock over government spending.

"Corporations are sitting on a pile of cash just waiting to be put to use," he said, adding that companies will start hiring when there is more clarity coming from Washington on spending cuts and other fiscal issues over which Congress has been bitterly divided.

Indeed, U.S. markets surged more than 2 percent Wednesday after Congress struck a deal to avert the "fiscal cliff" -- a spate of sweeping tax hikes and spending cuts that would have kicked in and sparked another recession had Congress not acted.