Taking Any Bets? Chicago Fed Pres Predicts 2.5% Growth This Year and 3.5% Next

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HONG KONG (Reuters) – The U.S. economy is expected to grow by 2.5 percent in 2013, improving to 3.5 percent growth in 2014, Chicago Fed President Charles Evans said at the Asian Financial Forum in Hong Kong.

Evans also forecast the U.S. unemployment rate would be 7.4 percent this year, easing to about 7 percent in 2014.

Last month, Fed policymakers said they expected GDP growth of between 2.3 and 3.0 percent this year, and 3-3.5 percent in 2014.

You’re not going to get 3.5% growth with chronic 7% unemployment in the US.  In the chart above, note the few times in the US that’s happened.  Look at the speed at which things were changing.  It occurred during the Reagan presidency, but, it was momentary and the economy was growing at a fast rate.  Our economy isn’t growing at a fast rate, and if it weren’t for the printing of money, I doubt that it would be growing at all. 

Thanks to Zero, though, this inverse rule will have to be expressed in a different manner.  It is possible that our official unemployment rate will drop below 7% but, and our economy remain stagnant. 

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Even if the official unemployment rate drops below 5% (which no one is predicting) we’d still have too many people not working to sustain any real economic growth. 

While we’re playing at the BLS, here’s some other interesting graphs.

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McJobs!!!

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7 Responses to Taking Any Bets? Chicago Fed Pres Predicts 2.5% Growth This Year and 3.5% Next

  1. miked1947 says:

    They should have passed around more of the Happy Weed he was smoking.

  2. tckev says:

    Once the gubberment get more borrowed cash and prints up evermore Qe then they are set to generate more new jobs. And with these new jobs everyone will buy more stuff, and the princess meets the prince and they all live happily-ever-after. Or some pipe-dream like that.

  3. philjourdan says:

    I take it you are not betting we are going to meet those numbers?

    Where is Tony Duncan when you need him! 😉

  4. cdquarles says:

    Yep, I don’t see that kind of growth (in real terms) either. With more people dropping out, the remaining ones not as productive, everyone being afraid (particularly those who could but capital to work), there is simply no way to have real growth. Here is my ‘leading economic indicator’: I watch the ratio of truck traffic to car traffic on the roads (more trucks/cars is good) and the capital goods carrying trucks to all trucks (more capital equipment being carried relative to all freight). Neither look too good to me.

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