Fed Lowers Growth, Raises Unemployment Forecasts
The Federal Reserve has lowered its growth forecasts and raised its unemployment projections, suggesting the economy has a longer path to recovery.
The central bank's latest forecast predicts the economy will grow just 1.6 percent to 1.7 percent for all of 2011. For 2012, growth will range between 2.5 percent and 2.9 percent. Both forecasts are roughly a full percentage point lower than the Fed's projections from June.
The unemployment current is currently 9.1 percent. The Fed doesn't see that changing this year. It predicts it will fall between 8.5 percent and 8.7 percent next year. In June, the Fed had predicted unemployment would drop next year to as low as 7.8 percent.
The new forecast takes into account the substantial slowdown in growth that occurred earlier this year.