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Fed’s new forecast cut growth in 2012 but slightly boosted growth outlook for 2013 and 2014

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Fed\'s new forecast cut growth in 2012 but slightly boosted growth outlook for 2013 and 2014

WASHINGTON – The Federal Reserve has lowered its outlook for growth this year but is more optimistic about the next two years.

The change likely reflects a series of both stimulus measures the Fed launched Thursday aimed at boosting the sluggish economy.

The Fed now expects growth to be no stronger than 2 per cent this year, down from the 2.4 per cent forecast in June.

The Fed expects growth to accelerate next year as much as 3 per cent, up from June’s forecast of as much as 2.8 per cent.

For 2014, the Fed projected growth between 3 per cent and 3.8 per cent.

The Fed still thinks unemployment won’t fall below 8 per cent this year.

The unemployment rate is currently at 8.1 per cent. It says it could be as low as 7.6 per cent next year, and down to 6.7 per cent in 2014.

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