WASHINGTON (AP) - The Federal Reserve has sharply downgraded its
projections for the country's economic performance this year,
predicting the economy will actually shrink and unemployment will
Under the new projections, the unemployment rate will rise to
between 8.5 and 8.8 percent this year, up from prior projections of
7.1 to 7.6 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.
According to documents on the Fed's updated economic outlook,
central bank officials "generally expected that the recovery would
be unusually gradual and prolonged."