Fed Lowers Forecast for Economic Growth

Washington, DC, Nov. 23, 2010 -- Federal Reserve officials have lowered their forecast for economic growth for the remainder of this year and 2011.

The Fed forecast released Tuesday said that the economy will grow only 2.4% to 2.5% this year.

That's down sharply from a previous projection of 3% to 3.5%. Next year, the economy will expand by 3% to 3.6%, the Fed said, also much lower than its June forecast.

Fed officials expect that unemployment won't change much this year, averaging between 9.5% and 9.7%.

The current unemployment rate is 9.6%. Progress in reducing unemployment has been "disappointingly slow," the central bank said, according to the minutes of its November 2-3 meeting.

The Fed is slightly more optimistic about 2012, forecasting growth of 3.6% to 4.5% that year.

The economy will also grow 3.5% to 4.6% in 2013, the central bank said.

Consumers are still holding back on their spending, the central bank said, and recent reports on housing, manufacturing, international trade and employment were all weaker than expected at the June meeting.

The Fed also expects inflation to remain low.