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February 22, 2008
Add higher unemployment and inflation to the list of woes affecting the nation's economy.
The updated forecasts coming from the Federal Reserve are not encouraging. The double blows of a housing slump and credit crunch, coupled with fewer jobs and higher prices, mean a weaker economy in the months ahead.
This Associated Press reports the gloomy predictions come even after the Fed cut the interest rate twice in January. The two rate cuts mark the most dramatic rate cut in a single month by the Fed in a quarter century, the news service's economics writer reports.
The Fed's new forecast calls for a growth rate of between 1.3 and 2 percent for the year. Earlier projections pegged the numbers as between 1.8 percent and 2.5 percent.
That lowered estimate comes from more anticipated housing market correction, tighter credit conditions, stock market instability and higher energy costs.
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