Cartoon: Conflicting Economic Data

Unemployment and Economic Predictions

A) Obama budget predicts that the unemployment rate for 2009 will be 8.1 percent (actual rate is 9.3 percent), and says it will be 7.9 percent in 2010 (average so far: 9.7 percent). -- Feb. 26, 2009
B) Fed Chairman Bernanke says he sees "green shoots" of U.S. recovery, which, he said, would "pick up steam" next year. -- March 15, 2009
C) Obama says, "We are beginning to see glimmers of hope." -- April 14, 2009
D) CNN reports that "Job Recovery May Be on the Way." -- May 18, 2009
E) Jeffrey Kling of the Brookings Institution says, "It seems clear the U.S. economy has turned a corner." -- June 5, 2009

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The Fed's Economic Forecast

Economic projections of Federal Reserve Governors and Reserve Bank presidents
	2010	2011	2012
Change in Real GDP	3.0% to 3.5%	3.5% to 4.2%	3.5% to 4.5%
April projection	3.2% to 3.7%	3.4% to 4.5%	3.5% to 4.5%
Unemployment Rate	9.2% to 9.5%	8.3% to 8.7%	7.1% to 7.5%
April projection	9.1% to 9.5%	8.1% to 8.5%	6.6% to 7.5%
PCE Inflation	1.0% to 1.1%	1.1% to 1.6%	1.0% to 1.7%
April projection	1.2% to 1.5%	1.1% to 1.9%	1.2% to 2.0%

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Cartoon: Big Government

Obama' Economic Forecast

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Budgets Projections: 2010 v 2011

A $2 Trillion Increase

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Obama's Unemployment Forecast

For GDP, they are forecasting real GDP growth of 2.7% in 2010, followed by 3.8%, 4.3% and 4.2% in 2013.

For unemployment, the forecast is for an average of 10% in 2010, with a decline to 9.2% in 2011, 8.2% in 2012 and 7.3% in 2013


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Economic Forecasts

2009
CBO Unemployment 9.3% Real GDP -2.5%
OMB Unemployment 9.3% Real GDP -2.8%

2010
CBO Unemployment 10.2% Real GDP 1.7%
OMB Unemployment 9.8% Real GDP 2.0%

2011
CBO Unemployment 9.1% Real GDP 3.5%
OMB Unemployment 8.6% Real GDP 3.8%

2012
CBO Unemployment 6.4% Real GDP 4.7%
OMB Unemployment 7.7% Real GDP 4.3%

The Obama administration said Tuesday that it now expects the 10-year budget deficit to reach $9 trillion, or about $2 trillion more than it estimated earlier in the year...

A 10-year deficit of that magnitude means the debt held by the public -- the accumulation of all annual deficits over the decades -- would reach 82% of gross domestic product. That's double the 41% recorded in 2008...


read the CNN story

Cap and Trade

Reducing greenhouse gases is the main aim of the sweeping energy bill currently up for debate in the House.

An 80% reduction is what most scientists say is needed to avoid the worst effects of global warming.

Putting the nation on track to meet this goal by 2050 will cost the average American household $175 a year by 2020, according to the Congressional Budget Office.

Under the plan, known as a cap-and-trade, polluters would have to pay to emit carbon dioxide into the atmosphere, something they currently do for free. Plus, the amount they can emit would decline each year (cap).

Industries would either pay for cleaner technology, or buy pollution permits in a secondary market (trade). Industries most affected include electric utilities, gasoline refiners, chemical makers, and steel and cement companies.

The huge costs in this system - over $100 billion a year - would normally be passed on directly to the consumer. But much of the money generated from the sale of these pollution permits is being returned to households and business as a series of tax credits and other allocations. These credits are what push down the annual household cost to a relatively low $175.

Consumers will mainly see this cost in the form of higher electric bills and gas prices. The impact on the Federal budget is minimal, with one analysis suggesting that it could actually increase revenues a bit.

read the CNN story

My thoughts: $175 per household by 2020. Ha!!!! More like $2000 per household.

Unemployment and the Stimulus

source and a critique of the chart

My thoughts: The recovery plan failed to deliver.

The Economy: Worse than Thought

The Federal Reserve's latest forecasts for the U.S. economy are gloomier than the ones released three months earlier, with an expectation for higher unemployment and a steeper drop in economic activity.

The Fed's forecasts, released as part of the minutes from its April meeting, show that its staff now expects the unemployment rate to rise to between 9.2% and 9.6% this year. The central bank had forecast in January that the jobless rate would be in a range of 8.5% to 8.8%, but the unemployment rate topped that in April, hitting 8.9%.

The Fed also now expects the gross domestic product, the broadest measure of the nation's economic activity, to post a drop of between 1.3% and 2% this year. It had previously expected only a 0.5% to 1.3% decline.

read the CNN story

My thoughts: What happened to the green shoots? They must have been weeds.

Cartoon: Economic Forecasts

Cartoon: The Economy Has Reached the Bottom?

Cartoon: Economic Forecasting

Cartoon: Economic Forecast

Cartoon: Economic Pessimism

Cartoon: Fed Forecasts

Cartoon: The Fed and the Economy

Cartoon: Economic Forecasting

Cartoon: Economic Forecasting