The latest from the folks at the Federal Reserve:

In gloomy economic projections released by the central bank, the Fed’s Open Market Committee said it expected that the economy would contract by 0.5 percent to 1.3 percent this year, that unemployment would soar to 8.5 to 8.8 percent, and that inflation would remain under greater pressure.

Bleak economic data reflecting a sharpening slide in housing, trade, industrial production, spending and employment rates “more than offset” any potential impact from an economic stimulus plan, the Fed said, forcing it to cut its economic outlook.

Eli Sanders was The Stranger's associate editor. His book, "While the City Slept," was a finalist for the Washington State Book Award and the Dayton Literary Peace Prize. He once did this and once won...

10 replies on “Forecast: Bleak.”

  3. RE: the unemployment rate: Didn’t BushCo. change the way that was calculated to make it appear smaller? Could someone give a clear accounting of what the “Unemployment Rate” actually means, in plain terms? Is there a more accurate way to measure it than the Gummint’s version?
    Thanks.

  4. @3 Nope. We’ve calculated it pretty much the same way for a long time. Some people complain that it leaves out people who are no longer looking or who are not ‘fully employed’.

    You can find info on just about anything related to employment or the lack there of here http://www.bls.gov/

  7. Gloomy? That projection is a dipsy-doodle, sun’s a’comin up, future-so-bright-gotta-wear-shades forecast compared to what’s really gonna happen.

  9. The survey used to collect data for the unemployment rate changed most recently during the Clinton administration (as noted on the BLS site), though it’s controversial how much of a difference it really makes. Some people claim that a more realistic measure would show current unemployment in the double digits.

    That aside, using the current standard I have a hard time believing unemployment will only reach 8.5% or so. I’m guessing 9% by the end of the year and double digits before the bottom is reached some time in 2010 or 2011.

  10. @9, the revisions made in 94 were mostly methodological and their net effect seemed to be to count more unemployed rather then less.

    Unemployment will likely hit double digits, but it will peak after the recovery begins. Its generally a lagging indicator.

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