The news from the US economy wasn’t terrible. It added 110,000 jobs last month.
Wait… The working age US population rises by about 200,000 a month. Even if only about half of them want jobs, that’s still only keeping up with unemployment…not getting ahead it.
But the US economic forecast seems hardly to be improving. Even the Fed says the sky is getting darker. The New York Times reports:
Fed Lowers Its Forecast for Growth, but Takes No Steps
WASHINGTON — The Federal Reserve significantly reduced its forecast of economic growth through 2013, acknowledging that it had once again overestimated the nation’s recovery from the 2008 financial crisis.
Despite the bleak forecast, however, the Fed said that its policy- making committee had decided against taking new measures to stimulate growth at a two-day meeting that concluded Wednesday. The Fed’s chairman, Ben S. Bernanke, said that the central bank already was pushing hard to spur growth and create jobs.
“We have taken a lot of actions,” Mr. Bernanke said at a news conference after the announcement. He added that Congress, by contrast, was not doing enough to pull the levers of fiscal policy. Lawmakers are gridlocked over a new jobs proposal from the White House, and a special bipartisan committee charged with reducing the deficit is struggling to reach agreement by Thanksgiving.
This is a difficult time for the Fed and its chairman. Republicans charge that the central bank’s existing efforts have gone too far, sowing future inflation. Democrats say that in hesitating to do more, the Fed is ignoring the plight of more than 25 million Americans who cannot find full-time work. And the sluggish pace of growth, which continues to fall short of the Fed’s predictions, is a bright marker of its failure to stimulate a recovery.
It’s no wonder the markets are trying to discover what things are worth.
for The Daily Reckoning Australia