Fed Expects 7.8 to 8 Percent Unemployment at Year’s End

Apr 25, 2012 3:46pm
ap ben bernake press conference thg 120425 wblog Fed Expects 7.8 to 8 Percent Unemployment at Years End

(Image credit: Susan Walsh/AP)

The Federal Reserve now expects a slightly lower unemployment rate at the end of the year than it did in its previous prediction.

 

In its updated outlook released on Wednesday, the Fed is estimating that unemployment, now at a three-year low of 8.2 percent, will be between 7.8 and 8 percent at the end of the year – rather than 8.2 to 8.5 percent stated its previous projection.

 

In his interview with Diane Sawyer, Ben Bernanke said that he expects unemployment to be at about 8 percent at the end of the year.

 

January 2009 is the last time the unemployment rate was 7.8 percent, when the U.S. economy was buoyed by several federal stimulus efforts.

 

GDP GROWTH

The Fed predicts the economy will grow between 2.4 and 2.9 percent in 2012, this also a slightly higher growth rate than the previous forecast.

 

INFLATION

The Fed still expects inflation to be about 2 percent in coming years.

 

ALSO…

Weakness in housing and troubles in Europe are two factors the Fed Board and Chairman Bernanke pointed to as threats to the U.S. economy.  That said, the Fed did not indicate any plans for a new stimulus and said that it will keep interest rates low until 2014.

 

STOCK MARKET REACTION

So far no major reaction from the U.S. markets.  All three major indices are up for the day,  NASDAQ is on a bit of a tear, thanks to Apple.

 

SHOWS:
You are using an outdated version of Internet Explorer. Please click here to upgrade your browser in order to comment.
blog comments powered by Disqus