Pessimism

Fed: High Unemployment Here to Stay

Eclipsing news that the American economy grew faster in the third quarter this year than had been anticipated, the Fed announced that policymakers expect American unemployment to stay at 9 percent for at least a decade–the number could, they said, be permanent. The “healing process in the economy has slowed to a crawl,” one Bank of America Merrill Lynch economist said. Meanwhile, corporate profits have skyrocketed to record levels, jumping 28 percent in the third quarter this year. The huge cash influx in American businesses reflects deep cost-cutting measures and an increase in demand. Though they’ve been slow to add to payrolls, companies have been investing in equipment and software at rates higher than expected.