Fed Predicts More Economic Growth but Says Unemployment Will Remain High

1 year ago

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Unemployment is likely to remain high this year but the economy could grow at a faster rate than previously thought, the Federal Reserve predicts.

In its first forecast since November, Fed officials said U.S. economic output could expand by 3.4 to 3.9 percent in 2012, The New York Times reported Wednesday. That's compared to the 3 to 3.6 percent growth predicted previously.

The improved outlook comes after a boost in household spending in the final months of 2010, particularly on cars, as well as increased optimism by businesses, according to The Los Angeles Times.

But the good news isn't enough to overshadow the bad: The Fed expect jobless numbers to remain high -- at between 8.8 to 9 percent -- this year. The unemployment rate is expected to dip only slightly to 6.8 to 7.2 percent in 2013.

Fed officials "continued to express disappointment in both the pace and the unevenness of the improvements in labor markets," according to the minutes of the Jan. 25-26 meeting released Wednesday.

At the meeting, the Fed's main policy arm voted unanimously to continue a plan announced in November to buy $600 billion in Treasury bonds to help jump-start the economy.

Filed Under: Unemployment, Economy

Tagged: ben bernanke, dailyguidance, economic growth, household spending, the fed

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Germany is tooling up auto manufacuring plants anticipating the market switching to electric cars despite past economic downturn, particularly in China. The Auto Industry is the backbone of a nation, where are our crusaders pumping up the people, employing the population? News to politicans involved in Bilderberg, pick a side, theirs or ours!

February 18 2011 at 2:36 AM Report abuse Permalink rate up rate down Reply

tistolaugh

Let's face the fact that Obama's one solution spending agenda has failed and he will be gone in 2012. Then we can elect someone left or right based on proven experience instead of speaking prowess.

February 16 2011 at 10:30 PM Report abuse Permalink +3 rate up rate down Reply

Michael

Growth without private sector meaningful employment is a pipe dream. The very most fundamental facts of our nation are that government is funded by taxes on the wealth generated in private industry and thus a higher proportion of public employees is less sustainable than a higher proportion of productive private sector employees. Under Obama, we have been headed in the wrong direction at an accelerating pace. 2012 does not seem soon enough to start correcting our mistakes.

February 16 2011 at 7:53 PM Report abuse Permalink +4 rate up rate down Reply