Wednesday, February 18, 2009

Fed Predicts Worsening Economy, Unemployment

The Federal Reserve today downgraded the economic projections for this year, with predictions that the economy will contract more than previously expected and unemployment will continue to rise.

The new forecast from the Fed is that the economy will shrink this year between 0.5 and 1.3 percent. The housing crisis, inflation, the credit crunch and other economic factors have all contributed to the current recession.

The worst prediction may be the one regarding unemployment, already at 7.6 percent. Regardless of whether or not further downturns in the economy occur, Fed officials expect unemployment to continue to rise through at least 2011.

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