Federal Reserve Board Chairman Ben Bernanke sent President Obama a report card this week, giving him another failing grade on the economy.
Of course, Bernanke never mentioned Obama by name. But the Fed chairman's gloomy description of an economy that is slowing down this year, and his announcement that the Fed will continue its costly stimulus to prop it up for the foreseeable future was vivid testimony that the president has been an unmitigated failure on restoring the economy to its former prosperity.
Bernanke's report to the nation Wednesday essentially declared that the Obama economy was "too weak to stand on its own," Washington Post reporter Ylan Q. Mui wrote in the newspaper's front page story about the Fed's decision.
The economic data presented by the Fed clearly shows we've made mediocre progress under Obama's impotent stimulus policies. It forecasts the economy will grow in the low 2 percent range (i.e., barely crawling) this year, below the modest 2.6 percent growth rate it predicted earlier this summer.
While the official unemployment rate has fallen to 7.3 percent, Bernanke acknowledged that a lot of the decline was due to millions of discouraged, longterm unemployed Americans who were not actively looking for work and thus are no longer counted among the unemployed.
The Fed predicts unemployment may fall into the 6 percent range next year, but it's made forecasts like this before, only to see the jobless rate cling to over 7 percent in the fifth year of Obama's presidency.
The real underemployment figure, of course, is much higher. It combines the unemployment percentage with the large number of part- timers who want but cannot full-time jobs, and discouraged workers who have dropped out of the labor force. That's now around 14 percent.
Despite the Fed's forecasts for next year, it is hedging its bets, promising to keep its short-term interest near zero until unemployment actually falls to 6.5 percent.
Don't hold your breath on that one. The number of jobs needed to shrink the unemployment rate to six and a half percent cannot possibly be reached in an economy barely growing in the 2 percent or less range.
The Conference Board's latest economic growth forecast says the slowing economy grew no more than 2 percent in third quarter and will grow by 1.6 percent for all of 2013.
"The tightening of financial conditions observed in recent months, if sustained, could slow the pace of improvement in the economy and the labor market," Fed forecasters said this week.
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