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JP Morgan Cuts Q3 GDP To 1.5% From 2.5%, Sees Unemployment Rate At 8.9% By End Of 2012

Tyler Durden's picture


Yesterday, JPM's Michael Feroli who is now undisputedly the least worst Wall Street economist (RIP Hatzius) cut his 2012 GDP forecast to under 1% net of fiscal adjustments. As of minutes ago, he just slashed his Q3 GDP from 2.5% to 1.5%. And the worst news for Obama: he will be dealing with 8.9% unemployment during his re-election campaign, which can now Rest in Peace. Speaking of RIPs, here's to you growth Hockeystick. You will be fondly forgotten.

From Feroli:

For some time now we have been highlighting downside risks to our already below-consensus growth forecasts. Given some recent developments, we feel compelled to lower our projection for GDP over the next four quarters.


For the current quarter the GDP arithmetic isn't setting up well, particularly regarding the outlook for an strong quarter on consumption, which now looks like it will have a tough time advancing at more than a 2% annual rate this quarter. In addition, early survey measures suggest activity may have stalled amid the debt ceiling rancor. Because of this we are lowering our Q3 GDP forecast from 2.5% to 1.5%. We do foresee some acceleration in Q4 to 2.5% (previously 3.0%). However, due to the anticipated drag from higher taxes and lower federal outlays early next year, we are reducing first half 2012 GDP growth by 1/2%-point to 2%. We had previously partly discounted some fiscal drag in our forecast for early next year, though left in some chance that we could see an extension of fiscal support. Those chances seem to be diminishing and it now looks more likely that growth could hit a pothole early next year. The revised forecast implies very little improvement in the unemployment rate, and doesn't see a fall below 9% in the coming year. We will have further details on the reasoning behind our forecast change in a note in this week's GDW.


Our previous Fed call had looked for the first increase in overnight policy rates at the beginning of 2013. Given that our forecast now has little improvement in the output gap until the second half of next year, we are pushing back that call until mid-2013. In the meantime we believe the Fed will undertake further measures to deliver monetary stimulus to the economy, even though those measures might not be particularly powerful. We will send out a note later this week regarding our expectations for next week's meeting: we don't see more asset purchases forthcoming but we do think the Committee will take incremental steps to signal increasingly accommodative policy.



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Wed, 08/03/2011 - 15:57 | 1521771 HedgeAccordingly
HedgeAccordingly's picture

BRING the pain. 

Wed, 08/03/2011 - 16:09 | 1521823 slaughterer
slaughterer's picture

Thank you very much for this report.  This important phrase needs to be bold-faced: "...we don't see more asset purchases forthcoming..." but, in the style of a cliff-hanger, increasingly accomodative policy. Please publish the later JPM report on monetary policy for us to see the end to this mystery. 

Wed, 08/03/2011 - 16:27 | 1521886 MichaelG
MichaelG's picture

Federal Funds Rate to (0.25%)? (Makes a strange kind of sense that they'd pay you to borrow their soon-to-be worthless paper, I suppose.)

Wed, 08/03/2011 - 16:15 | 1521843 Earl of Chiswick
Earl of Chiswick's picture

If it turns out that JPM's forecast is correct the talking points have already been programmed into the teleprompter. In fact it's already started.


The tea party economic terrorism of 2011 stalled what was otherwise a slow but steady economic and employment  recovery.



Welcome to the Tea Party's Austerity Recession

Wed, 08/03/2011 - 16:26 | 1521888 SilverRhino
SilverRhino's picture

DAMN ... someone let me back out through the looking glass.

Wed, 08/03/2011 - 16:30 | 1521900 WonderDawg
WonderDawg's picture

I don't think the American population, at this stage of the game, would buy that BS. It's happening slowly, but people are starting to wake up. Hopey the Clown will be a one term guy and probably will be remembered for being the guy who had a chance to turn the ship around but blew it up instead.

Wed, 08/03/2011 - 18:35 | 1522238 Nom de Guerre
Nom de Guerre's picture

"Mr. Clown, the deficit agreement is going to saddle our children with more debt than can ever be repaid.  Can you help us?"

"So what you're sayin' to Hopey is that he should think about the will of the people instead of his corporate masters, even tho' you already knew that he sold out to tha' man before he was even elected.  Is dat it?"

"Yeah, Hopey."

"I don't think so." {THUMP}  "Hopey don't play that."

Wed, 08/03/2011 - 16:55 | 1521975 francis_the_won...
francis_the_wonder_hamster's picture

The entire premise of the article you posted the link for is that Washington was cutting spending.  Please tell me when this will happen?  It sure as #%$^& wasn't any part of the debt ceiling compromise passed this week.  It amazes me that anyone buys the headline story that we are actually going to cut spending.

Wed, 08/03/2011 - 17:06 | 1522025 Earl of Chiswick
Earl of Chiswick's picture

The premise is that the media is setting up the tea party as the fall guy for the crappy performance of the economy. Will the American people buy that? 

Well, they voted for Bush twice and Obama once, which some would suggest is a commentary on the quality and competence of the electorate. 

Is there anyone here who thinks that Obama will not try and blame the tea party, he's been blaming Bush for the past 2 1/2 years.

Wed, 08/03/2011 - 17:24 | 1522062 WonderDawg
WonderDawg's picture

I hope he tries it, I think it will backfire on his chin. There is a lot of time between now and next year's election. This time in 2007, Hopey was barely on the radar. The thing is, there is some seriously bad shit dead ahead, and his administration is just as guilty as the previous 5, and he's at the wheel now, so he gets credit for driving us over the cliff. He's one and done.

Wed, 08/03/2011 - 16:55 | 1521976 francis_the_won...
francis_the_wonder_hamster's picture

Duplicate post.

Wed, 08/03/2011 - 16:18 | 1521859 MsCreant
MsCreant's picture

Oh God, the contractions, the contractions, ahhhhhh Godammit---->we must be having a baby! That happens after you get screwed. Maybe giving birth to something better????

Wed, 08/03/2011 - 16:24 | 1521879 SheepDog-One
SheepDog-One's picture

More like something that has horns and hooves.

Wed, 08/03/2011 - 16:41 | 1521934 Rodent Freikorps
Rodent Freikorps's picture

Rosemary's baby?

Heh. Remember It's Alive!!!

Wed, 08/03/2011 - 23:31 | 1522853 mason5566
mason5566's picture

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Wed, 08/03/2011 - 15:59 | 1521778 treemagnet
treemagnet's picture

I bet unemployment is going higher than that.

Wed, 08/03/2011 - 16:01 | 1521789 john39
john39's picture

like the published numbers mean anything.

Wed, 08/03/2011 - 16:06 | 1521811 MarketTruth
MarketTruth's picture

8.9 UE as counted by the US Gov, which does not include those who rolled off (99'ers) and partially UE, etc. Try 19% real/actual UE.

Wed, 08/03/2011 - 16:08 | 1521819 Dr. Engali
Dr. Engali's picture

Well that depends. Are you talking about the numbers the Bls puts out? That will be whatever they want it to be. Real unemployment won't be reported. Because you know once they drop off the claims they are no longer unemployed according to the Bls. They are just citizens who stopped exisisting.

Wed, 08/03/2011 - 16:20 | 1521852 Boston
Boston's picture


Let's hear their forecast for the Labor Force Participation Rate and the Employment-Population Ratio.

Until these improve--meaningfully--we'll be stuck in our depression.

Wed, 08/03/2011 - 16:10 | 1521828 Sudden Debt
Sudden Debt's picture

A lot of 99 weekers are going to get kicked out of the statistics. It could even go to 7%.

That doesn't mean any of them got a job.... they just don't exist or matter anymore.


Wed, 08/03/2011 - 16:17 | 1521856 Earl of Chiswick
Earl of Chiswick's picture

You misunderstand, the 99ers shall soon become 152ers, just as soon as they can figure out how to add that third digit. (it's a Y2K thing)

Wed, 08/03/2011 - 16:12 | 1521838 SheepDog-One
SheepDog-One's picture

Of course actual unemployment is over 20%. Govt toadies can say its 8% or 1% all they like, reality will crush them at some point with 1/4 of the country unable to work.

Wed, 08/03/2011 - 16:00 | 1521784 entendance
entendance's picture

Stiglitz urges U.S. to move on hiking bank capital

Wed, 08/03/2011 - 16:03 | 1521795 Mercury
Mercury's picture

Forcasting that the unemployment rate will be holding steady over a year from now is extremely optimistic...

Wed, 08/03/2011 - 16:12 | 1521840 brew
brew's picture

not going to happen.  we're just starting to see a new round of major layoffs...merck -10,000 just one example.  double digits by year end is my feel...

Wed, 08/03/2011 - 16:03 | 1521798 Gubbmint Cheese
Gubbmint Cheese's picture

Loved the press to push the S&P higher on the close. SPY's closed at $126.17 but were trading at $126.00 a minute and a half later... ha ha ha.. keep pushing on that string you bunch of morons..


Wed, 08/03/2011 - 16:27 | 1521892 SheepDog-One
SheepDog-One's picture

Cant they decide what it is they want to do? Cause panic to make people say 'Oh puleeze do ANYTHING to make markets stop dropping so hard'...or keep up the facade 'All is well, markets calm, nothing to see here its fine'.

Wed, 08/03/2011 - 16:04 | 1521800 Archimedes
Archimedes's picture

He will have to revise his numbers again.The US will have a negative 4th QTR or at the latest Q1 2012. In addition to that we will be sub 2% growth for the next 3-5 years.

Wed, 08/03/2011 - 16:05 | 1521804 Careless Whisper
Careless Whisper's picture



And the worst news for Obama: he will be dealing with 8.9% unemployment during his re-election campaign...

correction: And the worst news for Obama: he will be dealing with Ron Paul during his re-election campaign...

Wed, 08/03/2011 - 16:08 | 1521816 Sudden Debt
Sudden Debt's picture

With twice the 2008 campaign contributions for 2012 he'll get from his buddies, he'll be fine.


Wed, 08/03/2011 - 16:20 | 1521864 SheepDog-One
SheepDog-One's picture

Actually, by late 2012 unemployment and elections wont matter a bit, we'll be in a missile launching superpower world war well before then, probably fall of this year actually.

Wed, 08/03/2011 - 16:34 | 1521921 MichaelG
MichaelG's picture

So go long RTN, is it?

Wed, 08/03/2011 - 16:28 | 1521885 Archimedes
Archimedes's picture


But Ron Paul is fairly worthless. Don't get me wrong, I love the guy. But he is a rambling incoherent 80 year old and is un-electable. He scares most Americans because most Americans rely on Free Govt money.

Besides he has been head of the finance comittee for what 6 months or so and he has not done jack! He had his chance to put Bernanke's feet to the fire and failed.

Jon Huntsman is the ONLY candidate that even stands a chance. Which is really sad when you can't beat a worthless Socialist Democrat. The Rebublicans can't get out of their own way...

Wed, 08/03/2011 - 17:19 | 1522052 Abiotic Oil
Abiotic Oil's picture

Right...  Don't re-elect Obama so that HUntsman, the guy who used to work for Obama, can take his place?


Ron is in better shape than most 40 year olds.

Wed, 08/03/2011 - 17:29 | 1522061 DosZap
DosZap's picture


Incorrect wording, Ron Paul is not worthless.He has done his damnedest to try and keep the ship on the straight and narrow.
So much so, he's been written off and out in a corner by his own party.

Maybe better is ONE man cannot do it all alone,he TRIED.That's more than I can say for anyone else I know up THERE.

As far as Huntsman, LOL.....Arch, less than 5% of Americans ever heard of him......SCORE ZERO.

A 3rd party candidate, would have to be a real dandy.If Gov.  Perry gets in the race, He will beat Romney,he has lots of baggage, but, so does Mr. I Screwed Up Health Care as Gov.

People at least know who he is, and Texas(most of our success is not due to him), but the nation does not know this or care.

They would look at the economy here, and the growth, and rightly or wrongly see a chance, the best of the worst.

No other candidate(GOP),has a snowballs chance in hell..................IMHO.

Thu, 08/04/2011 - 08:47 | 1523311 Archimedes
Archimedes's picture


I am not saying any Rebublican currently in the race is a great choice. I would vote for Ron Paul if he made it that far. I too believe we need a third Party system as the Two party system is not working. Both parties have screwed the middle class equally for the last 30 years.

I love Ron Paul's Policies and I know he is only one man. But knowing he is probably going to be out of Politics if he does not become President and he has been trying for 20 years to fix what is broken you would thing he would go a little more rogue and make life hell for Bernanke.

Perhaps my wording of being an inchoherent 80 year old were a little harsh. I did not mean it because he was old, but just that when getting a point across it takes him far to long and he loses his effectiveness. I will accept the junks for this post. But those who junked need to be objective too!

Wed, 08/03/2011 - 16:06 | 1521805 Sudden Debt
Sudden Debt's picture

That decline in Gdp to 1.5%.... is that after of before the hyperinflation?

Wed, 08/03/2011 - 16:07 | 1521812 stormsailor
stormsailor's picture

the /es pushed up to resistance and stopped.  that is a normal reaction to the huge sell off yesterday. 

tomorrow should be a real debbie downer, there isn't much chart support for a ways.

Wed, 08/03/2011 - 16:08 | 1521817 ebworthen
ebworthen's picture

8.9% Unemployment?


Maybe if Obama bribes some folks at the BLS

Reality will be over 10% but we all know reality is nebulous in the new age.

Speaking of employment, I am typing from my local library because wireless is free (well, I pay taxes, so not really) and I am unemployed and actually not spending money on a broadband connection.


Wed, 08/03/2011 - 16:08 | 1521822 Critical Path
Critical Path's picture

8.9% = optimistic at best.

Wed, 08/03/2011 - 16:11 | 1521830 garbled
garbled's picture

I expect when Q3 GDP comes out, Q2 gets revised to the 0.1 to -0.2 range.  Then watch the sparks fly.

Wed, 08/03/2011 - 16:18 | 1521833 ZippyBananaPants
ZippyBananaPants's picture

Instead of sending more money to my trading account today, I am going to make a donation to Ron Paul. 

Are there enough educated people in the country to make a difference, or are we stuck with the idiots who voted (be nice) in office?

Wed, 08/03/2011 - 16:11 | 1521835 Silverhog
Silverhog's picture

Nice Hail Mary Green for the Dow. Going to take several more economic head butts before the market gets the drift. And that drift is toward the rocks.  

Wed, 08/03/2011 - 16:12 | 1521836 r101958
r101958's picture

Today, a 180+ point rally on what news? of the Fed members talking up possible QE3......that is it. Shows what this market is made of doesn't it?

Wed, 08/03/2011 - 16:16 | 1521848 SheepDog-One
SheepDog-One's picture

That was just to trick fools like Robo and Leo into piling all in for the next big dump.

Wed, 08/03/2011 - 16:12 | 1521839 Gubbmint Cheese
Gubbmint Cheese's picture

8.9% is an unrealistic 'best case' scenario.

either that, or this guy is dyslexic and meant 9.8%..

Wed, 08/03/2011 - 16:16 | 1521851 PulauHantu29
PulauHantu29's picture

From Today's Der Spiegel (08/03/11):


'The Biggest Loser is the Average American',1518,778178,00.html#ref=nlint

Wed, 08/03/2011 - 16:17 | 1521854 Johnny Lawrence
Johnny Lawrence's picture

And the worst news for Obama: he will be dealing with 8.9% unemployment during his re-election campaign, which can now Rest in Peace.

It's by no means a definite that Obama doesn't get re-elected.  First, Americans are idiots.  Second, he's raising substantially more money than any other candidate.  Third, other than Ron Paul, the Republicans have no appealing candidate.

Unfortunately, he may be President again.

Wed, 08/03/2011 - 16:21 | 1521869 ZippyBananaPants
ZippyBananaPants's picture


I predict that another democrat might step and run against Obama in the primary.  I think the dem's will realize he is not going to fool us twice.

Wed, 08/03/2011 - 16:52 | 1521957 Rodent Freikorps
Rodent Freikorps's picture

Nope, they'd lose the black vote, and they can't win without it.

Look for Soros to fund a conservative-ish third party candidate who will pull away just enough votes to throw the election to Obama.

That is how Clinton got elected.

All you need is half of the Independent voters to remain the clueless dupes they are.

Wed, 08/03/2011 - 16:29 | 1521897 r101958
r101958's picture

....and he may already be picked by TPTB as the least problematic for them.....along the lines of 'better the devil you know.......'

Wed, 08/03/2011 - 16:17 | 1521857 Turd Ferguson
Turd Ferguson's picture

Be ready. Gold looks like a certain raid tomorrow. Maybe back down toward 1640.

Wed, 08/03/2011 - 16:21 | 1521868 Sudden Debt
Sudden Debt's picture

It better do it. the climb has bee pretty agressive for gold these last few days.


Wed, 08/03/2011 - 21:52 | 1522641 mayhem_korner
mayhem_korner's picture

Be ready. Gold looks like a certain raid tomorrow. Maybe back down toward 1640.

That'd set it back to .... Monday?  Be a perfect set up for a move to 1,675 on Friday.

Wed, 08/03/2011 - 16:18 | 1521860 stormsailor
stormsailor's picture

just shorted 20 /es at 1254.  that should insure it goes straight up when it comes out of lock-up, lol

Wed, 08/03/2011 - 16:18 | 1521861 SheepDog-One
SheepDog-One's picture

We havent yet had a 'panic dump' yet of 800 points or so in a day to induce people to accept more ridiculous QE, not yet.

Most people I know arent even aware of what markets are doing at all, its summer, no one cares, they just assume all is well. When I tell them down 800 DOW points or so, they just look at me like Im silly.

Wed, 08/03/2011 - 16:19 | 1521862 slicktroutman
slicktroutman's picture

Treemagnet you are right. Unemployment is going higher. I don't think the 8.9% can be accomplished without number massaging in a major way

Wed, 08/03/2011 - 16:30 | 1521909 MsCreant
MsCreant's picture

There's massaging and then there is outright fondling and molestation.

Wed, 08/03/2011 - 16:37 | 1521927 SheepDog-One
SheepDog-One's picture

Improper touching.

Wed, 08/03/2011 - 16:48 | 1521948 stormsailor
stormsailor's picture

you say findling like its a bad thing, hahahahaahahhahahah

Wed, 08/03/2011 - 16:54 | 1521970 Rodent Freikorps
Rodent Freikorps's picture

Up against the wall.

Assume the position.

Wed, 08/03/2011 - 16:31 | 1521914 r101958
r101958's picture

They have a lot of experience with that.......

Wed, 08/03/2011 - 17:31 | 1522088 Johnny Lawrence
Johnny Lawrence's picture

It could be 8.9% if the participation rate continues to decline...people dropping off UE benefits and give up looking for work.

Wed, 08/03/2011 - 16:21 | 1521867 kito
kito's picture

8.9 pct unemployment??????? how??? why is it that common sense never plays into their game of darts? these guys are so clueless as to what is going on outside of their manhattan corner offices. the coaster is off the rails!! the ride is out of order!!! WAKE UP CLUELESS ECONOMISTS!!!!! 

Wed, 08/03/2011 - 16:56 | 1521981 Rodent Freikorps
Rodent Freikorps's picture

Legalize prostitution. Put in brothels in Walmarts and staff them with rolled off 99ers.

Tax sex.

Thu, 08/04/2011 - 00:11 | 1522934 StychoKiller
StychoKiller's picture

Sounds like a plan, but my wife would have my 'nads if I were to buy any strange.

Wed, 08/03/2011 - 16:22 | 1521873 Blithering ORSA
Blithering ORSA's picture

With qe3 a done deal, we might be fortunate enough to have u3 back at 8.9%.  It's just that the paychecks will all be worthless!

Wed, 08/03/2011 - 16:29 | 1521905 Caviar Emptor
Caviar Emptor's picture

Wait: with QE3, does saving one ws banker job at 8 figures equate to lowering the unemployment rate by 25 lower paid people? I think it should. Fair is fair

Wed, 08/03/2011 - 16:34 | 1521916 jmc8888
jmc8888's picture

Real American Zero's

Here's to you Mr. Wall Street hockey stick growth economist guy.

You turn dogmatic ivory tower nonsense into an artform, earning millions of dollars as you promote the policies that result in the destruction of the middle class.

8.9 percent, 25.9 percent...what's the difference? You have a bullshit statistical model to explain both, all of which are completely wrong.  As long as people keep believing, you'll keep bullshitting. 

Mr. Wall Street hockey stick growth economist guy

Brought to you by a nice cool Glass of Steagall

Wed, 08/03/2011 - 16:47 | 1521946 Rodent Freikorps
Rodent Freikorps's picture

Sometimes I feel guilty about what we did to the country, even if I voted against it.

Then I listen to 20somethings, and all I can think is "Fuck you, you superficial, spoiled little shit."

JPMs 1.5% will become -1.5% at the year progresses.

Wed, 08/03/2011 - 17:00 | 1521993 d00daa
d00daa's picture

gee, i wonder who taught those 20-somethings to be "superficial, spoiled little shits?"

Wed, 08/03/2011 - 17:02 | 1522004 DosZap
DosZap's picture

"And the worst news for Obama: he will be dealing with 8.9% unemployment during his re-election campaign, which can now Rest in Peace."


LOL, What a JOKE.

Hell it's 10% now.And NO ONE can tell anyone where we will be at the end of 2011, much less 2012.


Wed, 08/03/2011 - 17:05 | 1522018 oldmanagain
oldmanagain's picture

Obama just got reelected.  The Tea Pary now owns the coming debacle. We will have many months of Pubs denying help to the American people. Austerity will also turn Wall Street against these idiots and the lynching of the Koch machine.

Wed, 08/03/2011 - 17:06 | 1522022 pods
pods's picture

Well we get the first grumblings about the debt ceiling debate causing pullback. 

See, we have to expand the debt (QE3) because people were scared of the debt so they stopped spending.


Wed, 08/03/2011 - 17:19 | 1522053 sschu
sschu's picture

If UE is over 8.5% and WTI is over $80 on Labor Day, 2012 , then the Bamsters chances of re-election are very slim.  The key issue is $80 oil, if they are unable to drive that number below $70, then the chances of the economy being on the mend are not all that great. 

Since driving oil prices down is not really possible while juicing the economy with free money, the chances of an improved job market for the election is unlikely.

We are probably looking at an entire new political strucuture in January, 2013.  Whether they will be able to fix much, that is the real question.



Wed, 08/03/2011 - 17:36 | 1522102 DosZap
DosZap's picture


There WILL BE NO recovery here, ever.

Unless someone (outside the circle of Bones),brings back a manufacturing base, adds tariff's,and taxes the shit out of the HUGE corporations for off shoring jobs.

And, unless they are adding, expanding HERE,tax rates go exponentially higher for them,we cannot allow these Corporations to make billions, and not PAY back into OUR system.

And, protects them, rewards them for / when they bring them back.

Since hell will freeze over before that ever happens, we are dead meat.

Wed, 08/03/2011 - 17:46 | 1522132 Van Halen
Van Halen's picture

Cut the crap, JP Morgan! Give us the REAL unemployment numbers! You got what you want - trillions in new spending and trillions more in QE3 was all but rubber stamped today. Why bother hiding it any more? Tell us the truth - unemployment is about 18%! Goddamned lying, greedy bankers!

Wed, 08/03/2011 - 18:19 | 1522199 alexanderstollznow
alexanderstollznow's picture

given that an economist from JPM has no special information you dont, perhaps you can just make the call yourself or take the matter up with the BLS?

Thu, 08/04/2011 - 00:14 | 1522939 StychoKiller
StychoKiller's picture

"Might as well JUMP!!"

Wed, 08/03/2011 - 17:56 | 1522150 monopoly
monopoly's picture

Does anyone pay attention to these highly paid worthless analyst calls anymore. What I always come back to is that if we let the system dump and reset, well yes, it would have been worse, there would have been a depression and many more would have been out of work and suffered but, over 2 years later I bet the slate would have been wiped clean and right about now we would start and honest recovery without the scum that brought us to this point in the road.

Gold down to 1,640 tomorrow, I would love that. Needs to rest a bit and consolidate. And that is only 2%. Long way from 800. And at some point the miners will rock, just be patient.

Wed, 08/03/2011 - 18:16 | 1522192 alexanderstollznow
alexanderstollznow's picture

And the worst news for Obama: he will be dealing with 8.9% unemployment during his re-election campaign, which can now Rest in Peace

who do you reckon will be president instead?  mitt romney or ron paul?? i dont think so.

Wed, 08/03/2011 - 18:24 | 1522212 The Alarmist
The Alarmist's picture

You can count on Big O being in the Oval office on January 23, 2017 ... you can bet that SEIU and ACORN are counting on that.

Wed, 08/03/2011 - 18:24 | 1522213 Van Halen
Van Halen's picture

Agreed. What does Obama have to worry about? He's just over halfway through and has successfully completed almost everything his masters have commanded him to do. The economy is ruined, we're in six wars, the deficit is... somewhere in the double digit trillions, gas/food/clothing prices are skyrocketing, political corruption is out of control, we're in a depression, Obamacare is about to take off, our country is slowly grinding to a halt. And the GOP is all too happy to hand him additional victories.

The sad part is that at this point, ANYBODY but Obama would be better.

Wed, 08/03/2011 - 18:21 | 1522206 The Alarmist
The Alarmist's picture

My first take was, "Hmm, GDP was at an official, initial 1.9% with unemployment at 9.2%, so I guess it is plausible that since revised GDP was at 0.4% that unemployment could really go to 8.9%, "  After picking myself up off the floor after a good bout of laughter, I admitted that it is indeed plausible since the DOL will simply stop counting enough bodies to keep UE below 9% ... Hell, Big O needs it below 8%, so it will probably be 7.9%, becuase that's the kind of credibility we can count on from official sources and their cheerleaders in the financial press these days.


Wed, 08/03/2011 - 18:24 | 1522211 Hobbleknee
Hobbleknee's picture

So they think unemployment will decrease by 15%?

Wed, 08/03/2011 - 18:26 | 1522217 The Alarmist
The Alarmist's picture

They are applying CBO-statistics, which count an increase in unemployment at a rate less than the rate of increase in the baseline budget as a reduction in umemployment.

Wed, 08/03/2011 - 18:55 | 1522251 Praetorian Guard
Praetorian Guard's picture

8.9%??????? I thought REAL unemployment is currently around 22-25%???? So this guy is saying that expectations have been CUT, yet unemployment will go DOWN??? Oh, he must be referring to the millions of 99 weekers getting ready to come off the dole and cease to be counted...

Wed, 08/03/2011 - 21:48 | 1522636 mayhem_korner
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The whole forecast is a collage of normalcy bias.  Economic conditions move in vectors & cycles...the thought that the US would end up in the nice tidy Mediocrastan outcomes in the Morgue's Q3 is lunacy.

I say we are moving from blue square to black diamond on the downslope.  Q3 2012 GDP will be -2.75% annualized, unemployment 9.9% (22.5% SGS Alt U-6), 10-Yr yield 5.5%, yr/yr house prices -8%, and core CPI running 5%.

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