Memo to those who are out of work: Don't get your hopes up this year. Federal Reserve Chairman Ben Bernanke said on Wednesday that the central bank did not expect the U.S. unemployment rate to go below 8.2 percent in 2012 or below 7.4 percent in 2013.
That's one reason the Fed left short-term interest rates unchanged at 0 to 0.25 percent, where they are expected to remain through 2014. "Unless there is a substantial strengthening of the economy in the near term, I would think that it's a pretty good guess that we will be keeping rates low for some time from now," Bernanke said.
Bernanke's muted outlook reinforced many economists' view that, despite some small glimmers of hope, the economy and jobs won't be picking up in the near term. His prediction for continued high unemployment comes on the heels of President Barack Obama's State of the Union speech Tuesday night, which offered a few ideas for improving the employment picture -- none of which curried much favor with economists.
The Fed chair also said that he expected the economy to expand between 2.2 and 2.7 percent this year, compared to its rosier outlook in November of 2.9 percent growth.
Bernanke spoke extensively with reporters on Wednesday as part of his ongoing attempt to provide more transparency around how the central bank operates. The Fed released information for the first time showing individual policymakers' assessments for interest rate changes. More than half of the 17 Fed committee members said interest rates should not be touched before 2014.
The move to increase visibility about future policy shifts is seen as a way to create more stability for business and consumer borrowing. "It can help households and businesses make decisions and make fewer decisions that are costly," said Kim Schoenholtz, a finance professor at New York University's Stern School of Business. "[Americans] won't be buying houses they can't afford, or businesses won't be hiring workers they have to fire later."