Source:
APWASHINGTON - The Federal Reserve reported Tuesday that it expects slower economic growth and a slight bump up in unemployment next year due to the housing slump and a credit crunch. The board also said, however, that it thinks inflation will remain moderate.
The fresh assessment of the country's future economic performance was issued by the Fed in the first of its quarterly reports to the nation.
On the growth side, the Fed said it believes that business growth will slow next year, with the gross domestic product (GDP) coming in between 1.8 percent and 2.5 percent. That would be weaker than how the Fed expects the economy to perform this year and would mark a downgrade to a previous projection released in the summer.
The downgrade was due to a number of factors, including "the tightened terms and reduced availability of subprime and jumbo mortgages, weaker-than-expected housing data and rising oil prices," the Fed explained.
Read more:
http://news.yahoo.com/s/ap/20071120/ap_on_bi_go_ec_fi/fed_forecast
I found it interesting that they're predicting a flattening of energy prices over the next few years. Note, that's not a drop but for prices to stabilize. Unless there's an increase in wages won't that still pose a problem for the economy?
Also, did I miss the report last year that predicted the 3.6 percent consumer price increase that we've had so far this year? Or is that simply not considered when they're bragging about the lack of a "major inflation problems" due to rising energy cost?
Printer-friendly format
Email this thread to a friend
Bookmark this thread
(1000+ posts)
Send PM |
Profile |
Ignore
