President Obama Predicts Unemployment Will Hit 10% This Year

Jake Tapper and Karen Travers report: In an interview with Bloomberg News’ Al Hunt today, President Obama says he thinks unemployment will hit 10% this year.

Will unemployment reach 10%? asks Hunt.

“Yes,” says the president.

Before the end of this year? asks Hunt.

“Yes,” says the president.

“I think that what you’ve seen is the pace of job loss has slowed,” Mr. Obama says, “and I think that the economy is going to turn around. but as you know, jobs are a lagging indicator. We need to produce 150,000 jobs every month to keep pace.”

But, he said, “we will see recovery, shortly.”

In January, the incoming administration predicted in a white paper study that without a huge stimulus package, unemployment would reach just over 8%, and would be contained at under 8% with a stimulus package.

(When asked about this discrepancy, one of the authors of the study – Jared Bernstein, the top economic adviser to Vice President Biden – recently said that “when we made our initial estimates, that was before we had fourth-quarter results on GDP, which we later found out was contracting at an annual rate of 6 percent, far worse than we expected at that time.” The bottom line, Bernstein said, is that without the stimulus the unemployment rate “would have been between 1.5 and 2 points higher than it otherwise will be.”)

Hunt’s interview with the president today was scheduled as a way of setting up the president’s announcement tomorrow of greater financial regulations and a new government organization, the Consumer Financial Protection Agency, which will have a mission to regulate credit, savings, payment and other consumer financial products and services, and to protect consumers who use those institutions.

Does Wall Street “get it”? Hunt asks the president.

“Wall Street seems to have a shorter memory about how close we were to the abyss than I would have expected,” the president says, chuckling. “All we’re doing is cleaning up the mess that was made.”

-Jake Tapper and Karen Travers

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