Awwal 13, 1432 H/Feb 16, 2011, SPA -- The US Federal Reserve on Wednesday issued a more buoyant economic forecast for the rest of this year, but said it expected little improvement in the struggling US labour market. The central bank predicted growth of between 3.4 and 3.9 per cent in 2011, up from a November projection that the economy would expand in a range of 3 to 3.6 per cent. The new figures were part of the minutes released from the Fed's last rate-setting meeting in January. The Fed said surprising gains since November in consumer spending, business investments, exports and a bipartisan political deal in December on tax cuts all gave them a more optimistic outlook for the world's largest economy this year. But the higher growth was still unlikely to make much of a dent in unemployment, as companies worried about the US recovery's strength will continue hoarding cash instead of hiring new workers. The Fed's unemployment forecast for the end of 2011 was largely unchanged at 8.8 to 9 per cent, despite a sharp drop in the jobless rate over the last two months from 9.8 per cent to 9 per cent. Inflation predictions remained mostly unchanged at 1.3-1.7 per cent this year. The Fed has said the low inflation rate and weak job market justifies the central bank's controversial move in November to buy up 600 billion dollars in Treasury securities. The Fed's economic growth expectations for the following years remained mostly the same, ranging from 3.5-4.4 per cent in 2012 and 3.7-4.6 in 2013. Fed Chairman Ben Bernanke has said the growth rate will not be enough to force a radical drop in unemployment. He has argued it will take several years before unemployment drops from its current highs to more normal levels of 5 to 6 per cent.
