Fed's Pianalto: years (and years) to lower unemployment (back to normal levels)

Yahoo ^ | 8/19/11 | W Simon - Reuters

[NormsRevenge]

COLUMBUS, Ohio (Reuters) - The economy is growing so slowly that it will take years to wrench lofty unemployment rates back to normal levels, Cleveland Federal Reserve Bank President Sandra Pianalto said on Friday.

Speaking to a community bankers' group, she said growth in 2011 was likely to be about two percent and forecast it will rise only to three percent in 2012 and 2013 -- unlikely to make much of a dent in the current 9.1 percent jobless rate.

"If we're going to dig ourselves out of the hole that we're in and begin to drive down the unemployment rate, we need even faster growth than that," she said in Columbus, Ohio.

"I think it will take quite a few years for the unemployment rate to fall to more typical levels, in the neighborhood of 5-1/2 percent," she added.

Pianalto noted that central bank policymakers, in deciding to keep official interest rates near zero until mid-2013 at their last policy session, had concluded that recovery will be slower than expected in coming quarters and that downside risks were on the rise.

Not only are incomes growing slowly in a harsh job climate, but consumer confidence is weak and other key economic sectors are in trouble.

[NormsRevenge]

How the heck do so many intelligent officials , elected and otherwise, botch an economy up so bad?

The FED, The WH, CONgre$$, the list goes on and on..

Where does the Buck stop?

China?

[MNJohnnie]

1.5 years to fire 0 and the Democrats, 2 years to undo the mess they created, 2 years for the recovery to fully take hold.

I think she is right.

[Soothesayer9]

Probably about 3-5 years minimum. If Obama gets in a second time, then DECADES.

[Terry Mross]

It took Reagan almost two terms to correct the mess created by Nixon, Ford and Carter.

[Cheetahcat]

Never Ever happen with the Taxes, the EPA,The Energy cost and the City,County, State and Federal bureaucracies, forget it!