EconomicCrisis.US

Michael Snyder: The Federal Reserve says that everything is going to be okay.  The Fed says that unemployment is going to go down, inflation is going to remain low and economic growth is going to steadily increase.  Do you believe them this time?  As you will see later in this article, Federal Reserve Chairman Ben Bernanke has been dead wrong about the economy over and over again.  But the mainstream media and many Americans still seem to have a lot of faith in the Federal Reserve.  It doesn’t seem to matter that Bernanke and other Fed officials have been telling the American people lies for years.  As I always say, most people believe what they want to believe, and many people seem to want to have blind faith in the Federal Reserve even when logic and reason would dictate otherwise.  The truth is that things are not going to be getting much better than they are right now.  When the next wave of the financial crisis hits, the U.S. economy is going to fall back into recession, financial markets are going to crash and unemployment is going to absolutely skyrocket.  But you will never hear any of that from the Federal Reserve.
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Federal Reserve Chairman Ben S. Bernanke said the U.S. economy is operating below its level prior to the financial crisis, and that increased household spending is needed to sustain the expansion.

“Consumer spending is not recovered, it’s still quite weak relative to where it was before the crisis,” Bernanke said yesterday in the second of four lectures on the history of the Fed that he plans to deliver at George Washington University. “In terms of debt and consumption and so on we’re still way low relative to the patterns before.”
The Federal Open Market Committee said in a statement after a March 13 meeting that subdued inflation and high unemployment still warrant holding the benchmark interest rate near zero at least through late 2014. Signs the economy is improving don’t dispel risks to growth that include rising gasoline prices, fiscal cutbacks and a weak housing market, New York Fed President William C. Dudley said on March 19.
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The unemployment rate’s unexpected drop to a three-year low has overshadowed a less-positive labor- market development: fewer Americans are looking for work.

Last week’s Labor Department announcement that the jobless rate fell to 8.3 percent in January sent stocks and bond yields higher. The same report showed the share of working-age people in the labor force had declined to the lowest level in 29 years.

The so-called participation rate was cited by Federal Reserve Chairman Ben S. Bernanke yesterday to support his assessment that the rate of unemployment obscures vulnerabilities in the job market. Bernanke, speaking to the Senate Budget Committee, confirmed the Fed’s stance that interest rates will stay low at least through late 2014, and repeated his view that the job market is a “long way” from returning to normal.
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A continued drop in the number of people seeking new unemployment benefits in the U.S. last week and a large gain in private sector employment reported by payroll giant Automatic Data Processing offered fresh signals that the labor market began to stabilize as 2011 drew to a close.

Separately, service-sector activity in the U.S. economy grew in December, at a pace similar to the prior month.

Initial jobless claims fell by 15,000 to a seasonally adjusted 372,000 in the week ended Dec. 31, the Labor Department said Thursday.
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