Biggest Rise in Joblessness since WWII

Or so Goldman Sachs seem to believe. Note expectations of a rate cut to .5% by the Fed in December. From MarketWatch, via Brad De Long:

Goldman forecasting biggest rise in joblessness since WWII

MarketWatch
By Rex Nutting
Last update: 10:55 a.m. EST Nov. 7, 2008

WASHINGTON (MarketWatch) The unemployment rate is expected to rise to 8.5% by the end of next year and inch even higher in early 2010, economists for Goldman Sachs wrote Friday. The cumulative trough-to-peak increase of more than 4 percentage points in the jobless rate would be the most since World War II, they said. Goldman analysts lowered growth forecasts for the next three quarters, and said they now expect the Federal Reserve to cut its interest rate target to 0.50% by December. “The main reason for these changes is the accumulation of evidence that U.S. domestic demand and production are dropping sharply,” they wrote. “We do not see a resumption of anything close to trend growth before 2010.”