Fed Sees More 2012 Growth, Less Unemployment
The Federal Reserve on Wednesday said it sees the US economy growing more strongly than it thought this year, while unemployment would ease.
The Fed projected a maximum expansion of 2.9 percent by the end of the year, with the jobless rate falling to as low as 7.8 percent.
The central bank took a more optimistic view of the world’s biggest economy than it had in January, when it put growth at 2.7 percent at best and the jobless rate falling only as low as 8.2 percent.
The Fed meanwhile upped its estimates for inflation to 1.9-2.0 percent, compared to the high forecast of 1.8 percent in January.
Core inflation, excluding food and energy prices, was raised to 1.8-2.0 percent, bumping into the central bank’s 2.0 percent inflation target.
The January forecast was for a maximum 1.8 percent rise in core prices.
Over the longer term, gross domestic product (GDP) growth readings were lowered for 2013 and 2014.
Top growth for 2013 was seen at 3.1 percent, down a tenth point from January’s estimate.
But for 2014, the Fed cut the top estimate to 3.6 percent, from 4.0 percent.
Unemployment was expected to fall gradually, to a low of a 7.3 percent rate in 2013 and 6.7 percent the next year.
The latest estimates were released following a two-day meeting of the Federal Open Market Committee that left the Fed’s key interest rate near zero, where it has been since December 2008 to stimulate growth.
The FOMC policymakers said the economy was expanding “moderately” after exiting a deep recession almost three years ago.
Copyright © 2012 AFP