Fed Downgrades Economic Forecast for This Year

[PA Highlander]

Well, here's some additional bad news we all know that is just making it out to MSM.



Fed Downgrades Economic Forecast for This Year
The Federal Reserve on Wednesday predicted the economy will actually shrink and unemployment will rise higher.

The Federal Reserve on Wednesday sharply downgraded its projections for the country's economic performance this year, predicting the economy will actually shrink and unemployment will rise higher.

Under the new projections, the unemployment rate will rise to between 8.5 and 8.8 percent this year. The old forecasts, issued in mid-November, predicted the jobless rate would rise to between 7.1 and 7.6 percent.

The Fed also believes the economy will contract this year between 0.5 and 1.3 percent. The old forecast said the economy could shrink by 0.2 percent or expand by 1.1 percent.

The bleaker outlook represents the growing toll of the worst housing, credit and financial crises since the 1930s. All of those negative forces have plunged the nation into a recession, now in its second year.

"Given the strength of the forces currently weighing on the economy," Fed officials "generally expected that the recovery would be unusually gradual and prolonged," according to documents on the Fed's updated economic outlook.

Against that backdrop, unemployment -- now at 7.6 percent, the highest in more than 16 years -- will keep climbing and stay elevated for quite some time, the Fed predicted.

Fed officials anticipated that unemployment would remain "substantially" higher than normal at the end of 2011 "even absent further economic shocks."

[sluggie24]

They still aren't even close to what reality will be by the end of the year. The REAL unemployment number for the US is already well over 10%. Reagan just allowed the gov to calculate it differently back in the 80s to make things look better.