The Congressional Budget Office projects that unemployment would rise 1 percent “if we go over the fiscal cliff,” Wilkerson said.

Over the long term, however, allowing the fiscal cliff to play out, accepting both the tax increases and the spending cuts, would reduce the budget deficit over the next 10 years.

“Avoiding fiscal changes,” Wilkerson said, “means further increases in the national debt.”

Some areas, such as unemployment, likely will get better, Wilkerson said. “At its September meeting the Federal Open Market Committee, the branch of the Federal Reserve Board that determines the direction of monetary policy, indicated that unemployment will improve “gradually.” The range of views of FOMC members about monetary policy includes relatively wide variations.

He said some improvement in the U.S. economy has already begun but at a slow pace. “The U.S. economic growth has been moderate,” he said, “as European and political concerns remain high. U.S. gross domestic product (GDP) rebounded somewhat in quarter three but business investment and exports weakened.”

This sluggish growth is typical “coming out of a financial crisis. Consumer spending is rising but not quickly.”

Early fourth quarter data suggest “moderate U.S. growth to continue.” Residential housing has improved but “recovering at a low level.”

Financial stress in Europe continues to remain high but has improved. “The European economy has not settled as much as the U.S. economy. The United States has settled some in the last few months.”

Inflation rate is expected to remain “at or near its long-term target through2015,” Wilkerson said. The Fed’s inflation target is 2 percent.

More than a third of FOMC members disagree on the timing of monetary tightening. Wilkerson said some expect tightening to increase in the next few years with interest rates moving up to 4 percent. Others expect rates to remain close to zero until unemployment gets close to normal.