U.S. Economy Outlook ‘Bit Brighter’ Feds Say
Federal officials proclaimed in a new forecast last week that the U.S. economy is poised to grow by as much as 3.7 percent this year, which is higher than their January forecast that pitted growth between 2.8 and 3.5 percent. According to the U.S. Federal Reserve Board’s latest meeting minutes, the forecast also includes a dip in the unemployment rate, which is currently 9.9 percent, to between 9.1 and 9.5 percent by the end of 2010. That figure, too, is a bit brighter that the January estimation that unemployment would not fall below 9.5 percent within the year. The Fed’s latest forecast was prepared for its late April meeting.
The Fed also goes on to predict that inflation gauged by consumer spending, and not tied by energy or food costs, will rise from between 0.9 percent to 1.2 percent this year. This falls below their previous January estimate of price increases between 1.1 percent and 1.7 percent.
This new report and forecast is the midrange of forecasts for the Federal Open market Committee, which is a group of Federal Reserve Board members and presidents of central banks who meet eight times yearly to set interest rates. At four of these meetings, the central bank updates its economic forecast. The Fed’s January version of the economic forecast for 2011 and beyond remains unaffected.
The Fed emphasized that the economic recovery is projected to remain restrained, with a gradual fall in the unemployment rate.
