As for the timing, they believe we are past the bottom, and headed back up – slowly – into positive growth by the end of the year:
That’s for GDP. To me the forecast seems optimistic, but in any case, employment is unlikely to turn around until many months after output recovers. From the report:
In sum, we expect GDP growth to turn positive by the fourth quarter of this year. However, we envision a much slower recovery than those of the past four recessions. In fact, we only expect GDP growth to return to its trend level by the end of 2010. …We expect this persistent slack in the economy will result in a peak unemployment rate of around 9.5 percent and a very slow decline in the rate during 2010 and 2011.
And again, to me that seems optimistic. Let’s hope the forecast is correct, or even understates the speed of recovery, but policymakers must take seriously the possibility that this forecast – as has been generally true for all the forecasts from various sources that have come before it – will have to be revised downward later.
Graphs: San Francisco Fed