The Fed Owns Up To The Bad Times
Two weeks ago, I wrote a post basically questioning this idea that consumer confidence was up. It just didn’t seem like things were on the upswing, and the numbers they were showing that were supposed to be saying things were moving up were escaping my mind.
Therefore, I wasn’t surprised when yesterday the Federal Reserve came out with a forecast stating that the U.S. economy isn’t doing all that well, is worse than the report three months ago, and that they’re expecting higher unemployment and a steeper drop in economic activity.
Can I once again say “duh”? I mean, I’d seen the consistent job losses, the number of houses still being foreclosed upon and the downturn in new housing starts, and we’re talking about the potential bankruptcy of GM; what economic turnaround?
Here in New York, they’ve already decided to extend unemployment benefits another 13 weeks; that certainly doesn’t sound like things are picking up. And I’m sure you’ve seen my post on California’s vote against tax hikes, which is going to result in a bunch more jobs being cut, which is the same thing happening here in New York, only with fewer jobs being lost. That’s half of the big four, and the other two are in major trouble also.
If we’re looking for a silver lining, the Fed did say that they expect a positive turnaround in the second half of the year, but they don’t expect the turnaround to be enough to overcome what’s going on in the first half of the year.
They’re not alone.