News / Economy

US Central Bank Boosts Economic Forecast

Michael Bowman

The US central bank says the American economy will grow faster and create more jobs than had been thought a few months ago. The Federal Reserve released its latest economic projections Wednesday.

Federal Reserve officials appear slightly more optimistic about the strength of the U.S. economic recovery from the deepest and longest recession of the post-World War II era. In a new forecast, the Fed says the U.S. economy is expected to grow between 3.2 and 3.7 percent this year. That is up from a January estimate of 2.8 to 3.5-percent growth.

More-robust economic expansion should help trim America's stubbornly-high jobless rate. In January, the central bank indicated unemployment would remain at 9.5 percent or higher at year's end. Now, the Fed says it could dip as low as 9.1 percent. The jobless rate currently stands at 9.9 percent.

One constant at the Fed is an expectation that US inflation will remain low.  A tame inflation rate would allow the central bank to keep interest rates at record-low levels to stimulate economic growth. Also on Wednesday, the Labor Department reported that consumer prices fell in April by 0.1 percent, the first monthly decline in more than a year. Over the last 12 months, core inflation has risen just 0.9 percent, the smallest yearly increase in more than four decades.

Former Federal Reserve Governor Robert Heller echoed the Fed's inflation assessment on Bloomberg Television:

"Inflation will remain subdued," said Robert Heller. "Let us not forget that the housing sector is still very much ailing, and it has a very large percentage weight in the CPI [U.S. Consumer Price Index] - over 25 percent of the CPI is housing. So that will hold the actual inflation numbers down for quite some time to come."

On a more somber note, a private association of U.S. mortgage bankers reported that more than 10 percent of homeowners failed to make a mortgage payment in the first three months of the year - a record-high proportion.

It was a rash of home mortgage defaults that helped trigger the 2008 financial meltdown and accelerated America's plunge into recession. Many economists see a recovery of the U.S. housing industry as an essential ingredient for a sustained and robust economic recovery.

You May Like

India PM Modi's party distances itself from religious conversions

BJP under fire for being slow to rein in hardline affiliate groups allegedly trying to promote a Hindu-dominant agenda by luring Muslims and Christians to convert to Hinduism More

Anti-Whaling Group Found in Contempt of Court

Radical environmentalists who threw acid and smoke bombs at Japanese whalers in the waters off Antarctica continue their campaign to disrupt Japan's annual whale hunt More

UN's Ban Urges End to Discrimination Against Ebola Workers

Ban was speaking in Guinea on the second day of a whistle-stop tour aimed at thanking healthcare workers of the countries at the heart of the epidemic More

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.
Sudan School Becomes Target of Aerial Attacksi
X
December 19, 2014 12:45 AM
The school dropout rate is at an all-time high in Sudan's South Kordofan state because many schools have been destroyed during the three-year civil war between the government and SPLA-N rebel forces. Adam Bailes visited Sudan's Nuba Mountains' region and reports many children are simply too scared to go to school
Video

Video Sudan School Becomes Target of Aerial Attacks

The school dropout rate is at an all-time high in Sudan's South Kordofan state because many schools have been destroyed during the three-year civil war between the government and SPLA-N rebel forces. Adam Bailes visited Sudan's Nuba Mountains' region and reports many children are simply too scared to go to school
Video

Video VOA Reporter Tours Devastated Peshawar School

Islamist militants wearing military uniforms and strapped with explosives attacked a military run school Tuesday in the northwestern Pakistani city of Peshawar. At least 141 people were killed in the horrific attack, most of them young students. VOA reporter Ayaz Gul visited the devastated school and attended the funeral of the principal who courageously tried to save her students from the deadly attack.
Video

Video Nigerians Fleeing Boko Haram Languish in Camp Near Capital

In its five-year effort to impose Islamic law in northeastern Nigeria, the Boko Haram extremist group has killed thousands of people and forced hundreds of thousands to flee. Some of those who ran for their lives now live in squalor on the edges of the capital, Abuja. Chris Stein reports for VOA.
Video

Video Putin Says Russian Economy Will Emerge Stronger

Russian President Vladimir Putin has said his country's sinking economy will not only recover but also become stronger, despite falling oil prices and Western sanctions over Ukraine. VOA's Daniel Schearf reports.
Video

Video Detained Turkish Journalists Follow Teachings of US-Based Preacher

The Turkish government’s jailing of critical journalists has sparked international condemnation and is being seen as an effort to undermine the followers of an ailing Turkish preacher based in the United States. VOA religion reporter Jerome Socolovsky has more.
Video

Video ‘Anti-Islamization’ Marches Increase Tensions In Germany

Anti-immigrant rallies in Germany have been building in recent weeks, peaking Monday night in the city of Dresden where tens of thousands of people turned out to demonstrate against what they call the ‘Islamization’ of the West. Germany has offered asylum to more Syrian refugees than any other country, and this appears to have set off the protests. Henry Ridgwell reports from London.
Video

Video Aceh Rebuilt Decade After Tsunami, But Scars Remain

On December 26, 2004 there was an earthquake in the Indian Ocean so powerful it caused the Earth’s axis to wobble a few centimeters. Onshore on the island of Sumatra, the resulting tsunami was devastating. A decade later, VOA Correspondent Steve Herman reports from Banda Aceh, Indonesia, where although there is little remaining evidence of the physical devastation, the psychological scars among survivors remain.
Video

Video Refugees Living in Kenya Long for Peace in the Home Countries

Kenya is host to numerous refugees seeking safe haven from conflict. Immigrants from Somalia face challenges in their new lives in Kenya. Ahead of International Migrants Day (December 18) Lenny Ruvaga has more for VOA News from the Kenyan capital.

All About America

AppleAndroid

World Currencies

EUR
USD
0.8143
JPY
USD
119.23
GBP
USD
0.6390
CAD
USD
1.1596
INR
USD
63.304

Rates may not be current.