CBO Projection Underestimated Unemployment Rates

In the back of my mind, I have been hoping that maybe I am wrong, that I have a pessimistic view of the world, and things are actually going to get better sooner than later.

It sucks being right…

Elmendorf Sees Even Bleaker Jobless Outlook

CBO Director Elmendorf said today the country has not yet seen the worst of joblessness, despite some encouraging signs of economic growth.

Speaking at the American Association for Budget and Program Analysis’ fall conference, Elmendorf said the CBO projection of this past summer, which saw the unemployment rate peaking at 10.5 percent next year, underestimated the autumn’s rise in jobless numbers. The rate hit 10.2 percent in October.

“We are weighing our precise forecast going forward,” Elmendorf said, adding that the employment picture is expected to get worse before it gets better.

CBO has forecast that it will take years before unemployment falls to a “sustainable” level of 5 percent, Elmendorf said, because the current jobless numbers are so high.

“If one judges the pain of a recession by the excess of the unemployment rate over the long-run level … this picture is very clear that most of the pain of the recession is ahead of us, not behind us,” he said.

His comments come as Democrats consider new legislation to stimulate job growth.

And they all said no more stimulus packages.  Once again, it sucks being right.