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Another ‘extended period’: White House’s forecast for high unemployment

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The phrase “extended period” is getting a lot of mileage in Washington on Tuesday.

The Federal Reserve, in its post-meeting statement, reiterated its pledge to keep short-term interest rates near rock-bottom for an “extended period.”

And in testimony on Capitol Hill, three of the Obama administration’s top economic officials used that wording in forecasting how long high unemployment rates would persist.

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From the joint statement of Treasury Secretary Timothy F. Geithner, Budget Director Peter R. Orszag and Council of Economic Advisors Chairwoman Christina D. Romer before a House committee:

As the pace of job creation picks up in 2011 and 2012, there is likely to be greater progress in reducing unemployment. Nonetheless, because of the severe toll the recession has taken on the labor market, the unemployment rate is likely to remain elevated for an extended period. The forecast projects that in the fourth quarter of 2011, the unemployment rate will be 8.9%, and that by the fourth quarter of 2012, it will be 7.9%.

The jobless rate was at 9.7% in February. It has edged down from 10.1% in October.

If the economy still is growing by the fourth quarter of 2011, an unemployment rate of 8.9% would be astoundingly high for that point in a recovery -- certainly relative to what Americans have experienced in other recoveries since World War II.

The bulk of the statement lays out the administration’s programs to keep the economic rebound going -- and calls for more bipartisan work to bring down future budget deficits, which Geithner, Orszag and Romer concede remain “undesirably high.”

-- Tom Petruno

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