Boston Capital

A sobering assessment of the job market

Federal Reserve chairman Ben Bernanke delivered a bit of news and one important forecast this week.

The news from Bernanke and other Fed officials who set monetary policy came as no surprise. In a nutshell:

More of the same on short-term interest rates that are approaching zero percent, plus a commitment to buy $85 billion of securities every month in two separate programs to stimulate the economy.


Fed governors also said for the first time that they would keep their feet on the economic gas pedal until the nation’s unemployment rate fell to 6.5 percent — rather than end programs on specific dates or maintain entirely open-ended time frames.

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The last, important detail emerged from the meeting: a forecast that should serve as sober reminder for anyone who thinks America is going to start hiring lots of people if or as soon as Washington manages to defuse the dangers of the looming fiscal cliff.

Fed governors — who have been consistently over-optimistic in their economic forecasts — anticipate the economy won’t hit that 6.5 percent jobless target before the end of 2015.

Yes, that’s three years from now.

Forecasts like that aren’t radical, or even new. Most economists and market analysts would go along with them or some similar scenario. But they sketch out a very long road ahead when it comes to employment.


We’ve only recently finished a noisy national political campaign, a summer full of inflated promises about jobs, jobs, jobs. No one would have been elected dogcatcher by telling the truth about the nation’s slo-mo employment prospects.

So no one did.

That makes this is a good time for a jobs-reality check, and the Fed’s forecast is as good a tool as any.

Just to be clear, an unemployment rate of 6.5 percent is no great shakes in the big picture.

That’s about 2 percentage points higher than the lowest jobless rates of the previous decade. It is 1.2 percentage points better than our current national situation.


But 6.5 percent is where the Fed hopes it can move the rate to over 36 months, by pouring virtual gasoline on the economy until further notice.

That means injecting $1 trillion a year ­into financial markets and maintaining an interest rate policy that dramatically favors borrowers over creditors — practically ruling out the possibility that conventional savers will be able to earn anything on their money.

Keep in mind, the Great Recession started five years ago this month.

Tack on another three years, and the nation’s unemployment picture will have spent the best part of a decade in the dumps.

Experts worry about the potential impact of the coming fiscal cliff — a phrase Bernanke invented — for good reasons. It’s already doing bad things, slowing financial decisions by companies and people who don’t know what’s going to happen next. Real failure early next year would be much worse.

But events like the cliff are relatively small potatoes compared with a global economy that still struggles to get back on track.

Many economists, such as Harvard’s Ken Rogoff, have spent years explaining why the way out is long and difficult. This is what happens in the aftermath of serious financial recessions.

Campaign season is over. The real prospects for America’s job market are part of the record from this week’s Fed meeting.

It’s not a pleasant message, but it’s an ­important one to hear.

Boston Beer’s shares climbShares of Boston Beer Co., the maker of Samuel Adams lager, soared Thursday on news of strong holiday sales and a better business forecast for the year ahead.

The stock jumped $17.71 to $131.94 — a one-day surge of 16 percent — on the news.

The company increased profit forecasts for 2012, well above its own previous estimate and forecasts by Wall Street analysts.

The company also increased its projections for 2013 sales from an increase in the “high single digits” to an advance of 10 to 15 percent.

Boston Beer is best known for its lager, but an important part of its recent growth comes from sales of other products, such as hard ­cider. Sales of Angry Orchard cider have surpassed all forecasts, according to a Goldman Sachs analyst, Judy Hong.

The big rise in Boston Beer shares has made them very expensive, trading at prices roughly equal to 30 times profits expected for 2012.

Steven Syre is a Globe columnist. He can be reached at