Friday, July 17, 2009 WASHINGTON: The Federal Reserve has predicted that unemployment in the United States will top 10 percent this year, but noted that the end of the recession might be in sight. The pace of job losses in the United States quickened in June to 467,000, driving the jobless rate to 9.5 percent, the highest in more than 26 years, the Labor Department reported last week.Since the recession began in December 2007, the U.S. economy has lost a net total of 6.5 million jobs. According to the Federal Reserve, the unemployment rate could rise to as high as 10.1 percent this year, compared with the previous forecast of 9.6 percent. Meanwhile, the central bank said that the U.S. economy will shrink between 1 and 1.5 percent this year, better than a decrease of 1.3 to 2 percent it forecast in May. For 2010, the Federal Reserve said the growth rate in the United States will be in a range of 2.1 to 3.3 percent.
For 2011, the economy will continue to expand in a range of 3.8 to 4.6 percent. Moreover, the Federal Reserve said that there were signs of a recovery in some sectors, including the financial markets. "Almost all participants viewed the near-term outlook for domestic output as having improved modestly relative to the projections they made at the time of the April FOMC meeting, reflecting both a slightly less severe contraction in the first half of 2009 and a moderately stronger, but still sluggish, recovery in the second half," said the Fed in the minutes released on Wednesday. "It seemed likely that economic activity was in the process of leveling out, and the considerable improvements in financial markets over recent months were likely to lend further support to aggregate demand," said the documents.
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