Via Economist’s View, here’s a snapshot of the Federal Reserve Bank of San Francisco’s projection for the arc of the economy. It’s a graphic illustration of what a “prolonged U-shaped recession”–which is now the consensus of most economic forecasters–looks like. As you can see, it makes the sluggish post-2001 recovery seem robust by comparison. And the FRBSF is assuming that the economy has already bottomed out, which remains to be seen.
Here’s the FedViews release.
Welcome to Japan.
Employment is the problem, and not the unemployment rate which just does not reflect the damage that is being done but a turn to significant and continued job creation which judging from the last 2 recessions will take growth of about 3% difficult for months.
How the FRBSF can miss the noses on their face (Japan had full employment >5% the entire time the FRBSF was talking about ) and make assumptions that are laughable ( 5% real increase in disposable income ) is inexcusable …