In all the hoopla over the Federal Reserve's Wednesday's signals over its intentions to raise interest rates, its significant downgrades to expected growth of the U.S. economy during the next several years have mostly been ignored.
The Associated Press, aka the Administration's Press, has played a part in that. Both of the wire service's reports following the Fed's actions and predictions on Wednesday saved its downwardly revised growth projections for very late paragraphs, even though reporter Christopher Rugaber described them as indicators of a "much slower" economy than was anticipated just a few months ago. Further, the Fed's revised projections indicate that what is by far the longest streak of economic mediocrity since World War II will likely continue unchecked.
The headline at Martin Crutsinger's Wednesday evening report on the Fed's actions also claimed that "HIRING (IS) UP." While more people are being hired, the pace has slowed compared to previous years, as the following table shows (total nonfarm payroll changes are on the left, and private-sector changes are on the right):
Note that February's actual (i.e., not seasonally adjusted) total nonfarm and private-sector job additions came in below what was seen in February 2012 and February 2013. The seasonally adjusted results of +295,000 and +288,000, respectively, greatly exaggerate how good February really was.
For all the noise about how supposedly great the job market has been — as noted in Julia Seymour's NewsBusters post yesterday, the AP's Rugaber has even called it "robust," an adjective which caused a South Carolina woman to respond quite harshly — it's reasonable to contend that the Fed is leaving interest rates alone because it, and the rest of the economy, still aren't strong enough to withstand any kind of rate hike.
Crutsinger's report only focused on the Fed's downgrade to this year's growth — in Paragraph 21 of 23:
On Wednesday, the Fed also downgraded its quarterly economic forecasts. It cut its estimate of growth this year to a range of 2.3 percent to 2.7 percent, from an estimate of 2.6 percent to 3 percent in its previous forecast in December. It was an acknowledgement that some key indicators have been weaker than expected in recent months.
When Marty wrote "some," he should have written "most."
While Rugaber's writeup focused on the Fed's redefinition of the unemployment rate which will cause it to make interest-rate moves, he looked at the Fed's projections for the next three years — in his final unindented paragraph:
The Fed made other changes to its forecasts Wednesday after its latest policy meeting ended. It now predicts:
- Growth will be much slower through 2017 than it predicted in December. It now foresees growth of roughly 2.5 percent this year and next, down from 2.8 percent and 2.75 percent, respectively. Growth will then slow to about 2.2 percent in 2017, down from 2.4 percent, it predicts.
The Fed's downgrades are particularly significant because if they come in at or below their midpoints, it will mean that at the end of 2017, the U.S. will still be on a run of 11 consecutive years of annual growth at or below 2.5 percent, the longest such streak on record by miles. Since World War II, the longest 2.5 percent or below streak was just three years, seen two different times (1945-1947, 1956-1958). 2007, the first year of the current streak, "just so happens" to be the year Nancy Pelosi's and Harry Reid's Democrats took over Congress.
I have previously shown that the economy has grown by less in the past eight years than it has in any other eight-year period in the past 62. Grim history like that, now projected to extend to 11 years, should be news — especially given that policymakers seem outrageously content with such a performance. But not at the Administration's Press, and therefore not elsewhere in the U.S. establishment press.
Cross-posted at BizzyBlog.com.
