Fed's newest revised numbers show what we expected all along: the recovery could take several years to reduce unemployment
The Fed has revised their previous numbers for economic growth and unemployment. They were much more optimistic on QE1 effect on the economy than was the general public. Now they want to revise their numbers down. I'll bet they want to revise their numbers down for QE2 as well. Via FT:
The revised forecasts will show how the Fed became much more pessimistic over the summer and also highlight fears among a few members of the FOMC that some of today’s 9.6 per cent unemployment rate is structural and will take years to cure.
When the FOMC published its last forecasts in June most members thought that 2011 growth would be between 3.5 and 4.2 per cent, but many now think growth will be between 3 and 3.5 per cent, and some expect less than that.
FOMC members have made particularly aggressive upward revisions to their unemployment forecasts, with a large number now predicting that it will still be 8 per cent or above at the end of 2012, compared to the 7.1 to 7.5 per cent that they forecast in June.