Fed Lowers Economic Expectations For 2011

Julius Caesar fiddled while Rome burned.  Barack Obama, Nancy Pelosi, and Harry Reid are playing games while the American economy collapses.  No one in their right mind would increase taxes while the economy is sinking.  That though is exactly what Obama, Pelosi, and Reid are trying to do.

Unemployment is set to remain higher for longer than previously thought, according to new projections from the Federal Reserve that would mean more than 10 million Americans remain jobless through the 2012 elections.

Top Federal Reserve officials project that the unemployment rate, now 9.6 percent, will fall only to about 9 percent at the end of 2011 and about 8 percent when the next presidential election arrives, in late 2012. The central bankers had envisioned a more rapid decline in joblessness in their previous forecasts, prepared in June.

A separate report shows corporate profits reaching their highest levels ever.  Even as conditions are likely to remain miserable for job seekers for years to come, an extraordinary bounce-back is underway in the nation's corporate sector, with profits rebounding 28 percent over the past year to an all-time high in the third quarter.

Among the reasons for the strong earnings growth were that financial companies are no longer suffering from massive write-downs on bad investments as they were in 2008 and profits from U.S. firms doing business overseas have shot up.

The officials also increased their estimate of how low the nation's unemployment rate could ultimately go without stoking inflation. Several estimated that level is 6 percent or higher, not the 5 to 5.3 percent earlier thought.
 
"There are structural issues or residue from the financial crisis and the housing bubble restraining the economy," said Alan Levenson, chief economist at T. Rowe Price. "It's not even close to being a garden variety cyclical recovery."

Ask yourself why Obama, Pelosi, and Reid are playing their game and ready to give America our largest tax increase in history?  Unemployment remains high and the deficit grows.  Obama’s plan for America is working.

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