From the Minutes of the Federal Open Market Committe (FOMC):
In light of their expectation that the recovery will begin gradually, with output initially rising at a below potential rate, participants anticipated that labor market conditions would continue to deteriorate over the remainder of this year.
Their projections for the average unemployment rate during the fourth quarter of 2009 had a central tendency of 9.2 to 9.6 percent, noticeably higher than the actual unemployment rate of 8.5 percent in March—the latest reading available at the time of the April FOMC meeting.
All participants revised up their forecasts of the unemployment rate at the end of this year relative to their January projections, reflecting the sharper-than-expected rise in actual unemployment that occurred during the first quarter as well as the downward revisions in their forecasts of output growth in 2009.
Most participants anticipated that growth next year would not substantially exceed its longer-run sustainable rate and hence that the unemployment rate would decline only modestly in 2010; some also pointed to the friction of a reallocation of resources away from shrinking economic sectors as likely to restrain progress in reducing unemployment.
With output growth and job creation generally projected to pick up appreciably in 2011, participants anticipated that joblessness would decline more noticeably, as evident from the central tendency of 7.7 to 8.5 percent for their projections of the unemployment rate in late 2011.
Even so, they expected that the unemployment rate at the end of 2011 would still be declining toward its longer-run sustainable level. Participants projected that unemployment would decline further after 2011; most saw the unemployment rate eventually converging to 4.8 to 5.0 percent.
www.federalreserve.gov/newsevents/press/monetary/fomcminutes20090429.pdf
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