‘fed substantially upgrades growth forecasts for 2011’

NYT: The Federal Reserve revealed Wednesday that its policy makers had substantially upgraded their forecasts for how much the United States economy will grow this year, even though they expect that unemployment will remain painfully high for some time.

The core projections of top Fed officials now call for growth of 3.4 percent to 3.9 percent this year, up from the previous forecast of 3 percent to 3.6 percent, released in November. But the grim outlook for the job market was largely unchanged; Fed officials expect unemployment to be 8.8 percent to 9 percent this year, only slightly less than the November estimate of 8.9 percent to 9.1 percent.

Growth expectations were lifted by an improvement in consumer spending in the fourth quarter…

Full article here

3 Responses to “‘fed substantially upgrades growth forecasts for 2011’”

  1. 1 Dorothy Rissman
    February 16, 2011 at 6:22 pm

    Joblessness is the one issue that completely freaks me out. It will have a huge impact on the 2012 elections.
    If the unemployment rate gets down to 8%, I am hoping the country will except the fact that our president has worked hard to get us back on track.

    I have forgotten–What was the highest % of unemployment since the president took office.

    • February 16, 2011 at 7:20 pm

      Hi Dorothy,

      I checked a few figures for you – unemployment was 7.7% when President Obama took office, see this graph:

      The crucial point, of course, is that the economy was in free-fall at that point – between October 2008 and Feb 2009 alone 850,000 jobs a month were lost. By October 2009 the rate had risen to 10.1% – but even the most right-wing economists find it hard to lay that increase at President Obama’s door!

      The latest figure is 9.0%, the lowest since April 2009, meaning “the unemployment rate is sinking at the fastest pace in a half-century”.

      But even though the economic growth forecasts are very encouraging, it seems unemployment is proving incredibly difficult to reduce significantly. There’s no doubt, getting it down to 8.0%, or lower would be a huge help for 2012, but the message needs to be driven home – if it wasn’t for the stimulus/auto industry bail-out, the unemployment figure would be WAY higher.

  2. February 16, 2011 at 8:31 pm

    Getting unemployment down to 8% is the Republican’s meme knowing that it is going to be extremely difficult to do. By planting that number in the people’s heads makes it difficult to accept anything lower.

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