Eurosclerosis, American-style

- "The cyclical outlook remains tenuous but tilted toward “plodding along” as opposed to “double-dip.” The financial environment is looking increasingly like Japan’s, while the economy’s structural path looks more like Europe’s."
- "We have long expected a second-half slowdown in 2010 GDP growth, but the recent evidence points to a slower trajectory than we previously forecast. Accordingly, we are trimming our 2010 second-half real GDP projections."
- "We now expect Q3 and Q4 real GDP growth at 2.0% and 2.2%, respectively (compared to our previous expectations for 2.5% and 3.2%, respectively). The unemployment rate is expected to finish 2010 at 9.6%, up from our prior end-ofyear projection of 9.2%. Our end-of-year 2011 forecast is 8.9%."
- "Additional quantitative easing is a 2010 agenda item for the Fed, given the likelihood that unemployment will remain unacceptably high for the foreseeable future, with inflation running below the Fed’s implicit “target” of nearer to 2%, and with inflation expectations on the decline – but almost assuredly not an agenda item for the next (September 21) FOMC meeting."
- "Real GDP growth at least in excess of 2.5% would be required to bring down unemployment on a sustainable basis, and even so, the unprecedented scale of long-term unemployment in America is looking increasingly like a structural rather than “merely” cyclical matter."

CreditSuisse US Economics Digest 20100903

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