The U.S. Federal Reserve (Fed) on Tuesday raised its 2010 economic growth outlook to between 2.5 and 3.5 percent, and the central bank said skyrocketing unemployment seems to be near its peak. The Fed said policymakers at an early-November meeting “anticipated that economic recovery would be gradual, with real gross domestic product (GDP) growing at a moderate pace and the unemployment rate declining slowly over the next few years.” The range for 2010 growth was increased from July's forecast of growth between 2.1 and 3.3 percent. The new outlook suggests that unemployment, which hit 10.2 percent in October, could drop in early 2010. “Participants generally anticipated that the unemployment rate would rise somewhat further during the final months of 2009 and then decline steadily over the next few years,” the central bank wrote. The forecast said unemployment would fall to between 9.3 and 9.7 percent during 2010, and would remain high in 2011, between 8.2 and 8.6 percent. The Fed said the economy has suffered long-term damage from the economic slump that would take many years to recover. “Most participants anticipated that about five or six years would be needed for the economy to converge fully to a longer-run path characterized by a sustainable rate of output growth,” inflation, and unemployment levels, the central bank said. Growth in 2011 was expected to improve to between 3.4 and 4.5 percent, the outlook said. Inflation is expected to be low through 2012, it added.
