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Monetary policy can't save long-term unemployed: Economist

Jobless claims may have dropped to pre-recession lows, but that doesn't mean the job market is healthy, the chief economist for Sterne Agee told CNBC on Thursday.

What's more, another top economist believes monetary policy alone cannot help the long-term unemployed.

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During an appearance on CNBC's "Squawk Box," John Ryding, the chief economist for RDQ Economics, questioned whether monetary policy can spur more hiring. Large numbers of open positions, coupled with the long-term jobless dropping out of the labor market, has been a huge drag on the labor market. That comes even as the unemployment rate edges closer to 6.0 percent.

"I'm not saying we should write them off, but I don't think monetary policy can help them and that's the key difference," Ryding said. "What we have is a low hiring rate and a lot of job openings given where the unemployment rate is."

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Ryding posed the question over whether monetary policy can help the long-term unemployed to Sterne Agee economist Lindsey Piegza. She replied that the disconnect between hiring rates and the large number of long-term unemployed lies in a skill gap.

"A lot of small businesses come out and say, 'Look, I'm ready to hire. I have job openings,'" Piegza said. "But the people coming to apply for these jobs don't necessarily have the skill set to fill those job vacancies. ... So that part is exacerbating this structural disconnect."

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Piegza said she doesn't see momentum building in the labor market. If frigid weather alone could explain the disappointing batch of employment reports from over the winter, then the economy would have seen a bigger bounce as companies played catch-up with their hiring, Piegza said. The economy would have added more jobs than the 192,000 jobs created in March, she said.

"Taken together, the labor market is losing momentum from the start of 2013 and it's really not painting an encouraging picture for the next 12 or 24 months," Piegza said.

Unless hiring picks up, the Fed will have a "difficult job" keeping up its easy money policies, Piegza added.

—By CNBC's Jeff Morganteen.

Contact US Economy

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