Slow continued Depression with a 50% chance of another Recession.
| 2012 | April | Now | Dif | 2013 | April | Now | Dif |
| Change in real GDP | 2.4 to 2.9 | 1.9 to 2.4 | (-1) | Higher better | 2.7 to 3.1 | 2.2 to 2.8 | (-.8) |
| Unemployment rate | 7.8 to 8.0 | 8.0 to 8.2 | (+.4) | Lower better | 7.3 to 7.7 | 7.5 to 8.0 | (+.5) |
| PCE inflation | 1.9 to 2.0 | 1.2 to 1.7 | (-1) | Higher better | 1.6 to 2.0 | 1.5 to 2.0 | (-.1) |
| Core PCE inflation | 1.8 to 2.0 | 1.7 to 2.0 | (-.1) | Higher better | 1.7 to 2.0 | 1.6 to 2.0 | (-.1) |
Bernanke Continually Keeping Powder Dry, Despite Clear Evidence of Economic Slowdown
By: David Dayen, Firedog Lake
Thursday June 21, 2012 7:38 am
(T)he Fed released another set of data yesterday, its updated forecasts for the economy. And it was really bad.
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Bernanke clearly knows both that the economy has slowed, and that several factors contribute to that: fiscal consolidation at the state and local level, a poor housing market, and headwinds from Europe (Bernanke could aid the first thing, by the way, by having the Fed go into the muni market, saving state and local government’s $85 billion annually). So this was the big question from everyone at Ben Bernanke’s news conference yesterday: because the economic forecasts have been revised downward, what is the rationale for not doing more monetary accommodation at this time? Bernanke attempted to blame Congress, coming close to saying that the bullets are out of the gun on the monetary side and that what we really need is fiscal stimulus.
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There’s an opinion out there that Bernanke paved the way for QE3 in August, after another look at the data. But the forecast alone gives you most of what you need to make that determination. The recent history of the Fed includes a lot of waiting for more data to confirm economic slowdowns. Anticipatory action simply doesn’t happen.
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