Fed: Unemployment won't reach 7% until 2014 says this:
"The Federal Reserve's forecast for unemployment assumes new policy
basically won't do much for two years. The Fed is forecasting the
unemployment rate will fall to a range of 7.6% to 7.9% in 2013 and to a
range of 6.7% to 7.3% in 2014, from 8.1% in August. The Fed also for the
first time forecast 2015 levels, when it sees the unemployment rate
falling to a range of 6% to 6.8%. Federal Reserve members have shifted
their thinking of when the first rate hike would be appropriate to 2015,
according to the latest assessments released Thursday. There are now 12
of the 19 Federal Open Market Committee members -- including those that
don't have a vote this year -- who think the first hike will be in
2015; in June, only 6 felt 2015 was the correct time."
It very well could be circa 2020 before we see unemployment dropping to the 5% range again.
And due to the struggling economy, interest rates may very well remain at extremely low levels through 2016 or so, too.
Sad but true.