News

Central Bank Says US Economy Expanding 'Moderately'

Women and girls carry purchases on the Third Street Promenade in Santa Monica, Calif., April 24, 2012.
Women and girls carry purchases on the Third Street Promenade in Santa Monica, Calif., April 24, 2012.

The U.S. central bank says the American economy is growing "moderately" and that the country's high unemployment rate could fall below 8 percent late this year.

After a two-day meeting of its chief policy makers in Washington, the Federal Reserve refrained Wednesday from adopting new stimulus measures to boost the economic fortunes for the world's largest economy. The bank said it expects that economic growth will "remain moderate" over the coming months and then "pick up gradually."

The central bank said it is keeping its benchmark lending rate at the historically low level of zero to a quarter of a percentage point, and it expects to maintain the same interest rate at least through late 2014.

The bank said the country's labor market has improved, even though the jobless rate, 8.2 percent in March, remains high. But Federal Reserve Chairman Ben Bernanke said at a news conference that policy makers now think that as the economy improves, the jobless rate could fall to a range of 7.8 to 8 percent late this year and improve even more in the next two years.

"Looking ahead, the committee anticipates the unemployment rate will decline gradually over the next several years, reflecting the moderate pace of economic growth. Specifically, [the policy makers'] projections for the unemployment rate in the fourth quarter of this year have a central tendency of 7.8 to 8 percent, declining to 6.7 to 7.4 percent in the fourth quarter of 2014," said Bernanke.

Bernanke also said that if the U.S. economy should falter, the Federal Reserve will not hesitate to take new action to boost it, as it has the last couple years.

"So we have been very accommodative. And we remain prepared to do more as needed to make sure that this recovery continues and that inflation stays close to target. So in particular, we'll continue to assess, you know looking at the economic outlook, looking at the risks, whether or not unemployment is making sufficient progress towards its longer-run, normal level and whether inflation is remaining close to target," said Bernanke. "And if appropriate, and depending also on assessment of the costs and risks of additional policy action, we remain entirely prepared to take additional balancing actions if necessary to achieve our objectives."

Bernanke said consumer spending and business investment have grown, but the bank described the country's housing market as "depressed."

The central bank said that overall inflation expectations "have remained stable," at about 2 percent, and that increased energy costs will have only a temporary effect.

In recent weeks, there have been mixed signals about the American economy, with some pointing to modest growth and better times, and others emphasizing how sluggish the recovery has been from the recession that engulfed the country in 2008 and 2009.

Nearly 13 million American workers remain unemployed, with many of them jobless for extended periods. The jobless rate has fallen in recent months, but is considerably above the 5 percent level that is more normal in the U.S.

Still, many U.S. corporations have reported sharply higher profits. The world's most valuable company, U.S.-based technology giant Apple, said Tuesday its quarterly profits almost doubled during the first three months of the year. This was attributed largely to continued demand for the company's popular iPhones.  

The state of the U.S. economy is the prime issue in the presidential election campaign, heading to the November contest.

The presumptive Republican nominee, one-time venture capitalist Mitt Romney, has called for less government regulation and lower taxes to sharply boost the economy. He said that President Barack Obama, a Democrat, deserves no credit for recent gains in the economy and that any advances have occurred despite, not because of, his policies.

Obama frequently has told supporters that the economy is improving, although not as fast as he would like. He has noted that the country's businesses have filled more than 600,000 new jobs since the first of the year. He says the country cannot afford to weaken government controls designed to curb corporate excesses that contributed to the economic downturn, the worst in the United States in seven decades.

This forum has been closed.
Comments
     
There are no comments in this forum. Be first and add one

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Colombians Flee Venezuela as Border Crisis Escalatesi
X
August 27, 2015 2:08 AM
Hundreds of Colombians have fled Venezuela since last week, amid an escalating border crisis between the two countries. Last week, Venezuelan President Nicolas Maduro ordered the closure of a key border crossing after smugglers injured three Venezuelan soldiers and a civilian. The president also ordered the deportation of Colombians who are in Venezuela illegally. Zlatica Hoke reports.
Video

Video Colombians Flee Venezuela as Border Crisis Escalates

Hundreds of Colombians have fled Venezuela since last week, amid an escalating border crisis between the two countries. Last week, Venezuelan President Nicolas Maduro ordered the closure of a key border crossing after smugglers injured three Venezuelan soldiers and a civilian. The president also ordered the deportation of Colombians who are in Venezuela illegally. Zlatica Hoke reports.
Video

Video Is China's Economic Data Accurate?

Some investors say China's wild stock market gyrations have been made worse by worries about the reliability of that nation's economic data. And some critics say the reports can mislead investors by painting an unrealistically-strong picture of the economy. A key China scholar says Beijing is not fudging ((manipulating)) the numbers, but that the economy is evolving quickly from smoke-stack industries to services, and the ways of tracking new economic activity are falling behind the change. V
Video

Video Next to Iran, Climate at Forefront of Obama Agenda

President Barack Obama this week announced new initiatives aimed at making it easier for Americans to access renewable energy sources such as solar and wind. Obama is not slowing down when it comes to pushing through climate change measures, an issue he says is the greatest threat to the country’s national security. VOA correspondent Aru Pande has more from the White House.
Video

Video Shipping Containers Provide Experimental Housing

Housing prices around the San Francisco Bay area are out of reach for many people, so some young entrepreneurs, artists and tech industry workers are creating their own houses using converted shipping containers. But as VOA's Mike O’Sullivan reports from Oakland, the effort requires ingenuity and dealing with restrictive local laws.
Video

Video Arctic Draws International Competition for Oil

A new geopolitical “Great Game” is underway in earth’s northernmost region, the Arctic, where Russia has claimed a large area for resource development and President Barack Obama recently approved Shell Oil Company’s test-drilling project in an area under U.S. control. Greg Flakus reports.
Video

Video Philippine Maritime Police: Chinese Fishermen a Threat to Country’s Security

China and the Philippines both claim maritime rights in the South China Sea.  That includes the right to fish in those waters. Jason Strother reports on how the Philippines is catching Chinese nationals it says are illegal poachers. He has the story from Palawan province.
Video

Video Technique May Eliminate Drill-and-Fill Dental Care

Many people dread visiting dentists because they're afraid of drills. Now, however, a technology developed by a British firm promises to eliminate the need for mechanical cleaning of dental cavities by speeding a natural process of tooth repair. VOA’s George Putic reports.
Video

Video China's Spratly Island Building Said to Light Up the Night 'Like A City'

Southeast Asian countries claim China has illegally seized territory in the Spratly islands. It is especially a concern for a Philippine mayor who says Beijing is occupying parts of his municipality. Jason Strother reports from the capital of Palawan province, Puerto Princesa.
Video

Video Ages-old Ice Reveals Secrets of Climate Change

Ice caps don't just exist at the world's poles. There are also tropical ice caps, and the largest sits atop the Peruvian Andes - but it is melting, quickly, and may be gone within the next 20 years. George Putic reports scientists are now rushing to take samples to get at the valuable information about climate change locked in the ice.
Video

Video French Experiment in Integrating Roma Under Threat

Plans to destroy France’s oldest slum have sparked an outcry on the part of its Roma residents. As Lisa Bryant reports from the Paris suburb of La Courneuve, rights groups argue the community is a fledgling experiment on integrating Roma who are often outcasts in many parts of Europe.
Video

Video Kenyans Turn to Agriculture for Business

Each year Kenyan universities continue to churn out graduates for the job market despite the already existing high rate of unemployment among youth in the country. Some of these young men and women have realized that agriculture can be as rewarding as any other business or job, and they are resorting to agribusiness in large numbers as a way of tackling unemployment. Rael Ombuor reports for VOA.
Video

Video First Women Graduate Elite Army Ranger School

Two women are making history for the U.S. Army by proving they are among the toughest of the tough. VOA's Carla Babb reports from Fort Benning, Georgia as 94 men and those two women rise as graduates of the difficult Ranger school.

VOA Blogs