Better outlook for American economy as the Fed raises growth forecasts
21:29 GMT, 25 April 2012
The U.S. Federal Reserve last night raised its growth forecasts for the American economy and said unemployment will be lower than previously thought.
In a boost to President Barack Obama’s re-election hopes, it said it now expects the economy to grow by between 2.4 per cent and 2.9 per cent in 2012 compared with a projection of 2.2 per cent to 2.7 per cent in January.
The Fed also said it now expects unemployment to be between 7.8 per cent and 8 per cent this year rather than the 8.2 per cent to 8.5 per cent previously expected.
Improvement: The U.S. Federal Reserve raised its growth forecasts
The forecast fall in the jobless rate is good news for Obama ahead of presidential elections in November.
But the Fed warned that inflation
will be higher than previously thought and said growth will be slightly
weaker in 2013 and 2014.
Fed officials noted ‘some signs of improvement’ in the housing market
and said the economic recovery should ‘pick up gradually’ after modest
growth in the short-term.
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