Constant threat? by Barbora Misakova

I know that when there are some economic problems once, they can stay here longer than ever expect. And if we are talking about global economic crisis, then there is nothing more to say. It hangs on us like grim death. We cannot do anything to get rid of it and all our efforts are even getting us deeper and deeper into these financial troubles. When FED tangled into these problems with a big resolution to help, it looked like a good step or at least a little help. But after few days all that optimistic views were gone. FED has for exampled offered short-term cash loans and also has bought up mounds of short-term debt used for day-by-day expenses of companies such as payrolls or supplies, but as it is showing today, these steps were not so lucky. And today we are where we used to be before – in the same trouble.

The Federal Reserve ratcheted down rates to 1 percent what means they have to sharply lower its projections for economic activity this year and the next one. The Federal Reserve’s officials believe that gross domestic product (what is one of the measures of national income and output for a given country’s economy) will be probably flat or if it grows, it will be just 0.3 percent this year. There is also another option: next year GDP could either shrink by 0.2 percent or expand by 1.1 percent, but the point is, that these numbers were not the same as Fed delivered to Congress in July. As Fed forecasts were wrong, we can now expect that instead of 0.3 percent economy dip it will represent about 1 percent next year. We can also expect that unemployment will grow – national unemployment rate should rise to 6.3 – 6.5 percent this year, next year it should be even higher – between 7.1 a 7.6 percent. Even this prognosis is not very optimistic, there is at least one good signal – inflation should moderate next year.


related story: http://news.yahoo.com/s/ap/20081119/ap_on_bi_go_ec_fi/fed_economy;_ylt=AiBC9Mu764E2OkoSDfm8HTas0NUE

by Barbora Misakova for PocketNews (http://pocketnews.tv)

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