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Fed predicts high jobless rate through 2012
Posted By admin On November 25, 2009 @ 2:29 pm In U.S. News | Comments Disabled
November 25, 2009
Top US Federal Reserve officials have predicted unemployment rate in the United States to remain high by the end of 2012.
[efoods]According to documents released Tuesday of a closed-door meeting earlier this month, the Fed officials predicted a gradual recovery for the world’s biggest economy to create rapid improvement.
Most Fed policymakers said it could take five or six years for the economy and the labor market to get back to full health.
The Fed officials expect the unemployment rate will be in the six to seven percent range at the end of 2012, down from over 10 percent in October this year.
However, this is still far above the five percent typically seen in a healthy economy.
The Fed governors also predicted the jobless rate ranging between 9.3 percent and 9.7 percent next year, down from the June projection of 9.5 percent to 9.8 percent.
Inflation is likely to remain below the Fed’s projections, but there are concerns that low interest rates may be encouraging investors to indulge in “excessive” speculation.
Federal Reserve’s Chairman Ben S. Bernanke said during the meeting that the Fed would keep interest rates “exceptionally low” for an “extended period.”
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