Encouraging words came from the Federal Reserve Board, with its projection that the U.S. economy will pick up to a growth rate of about 3 percent next year, and as much as 3.5 percent in 2015. In the second quarter, economic growth was 2.5 percent at an annualized rate, up from 1.1 percent in the first quarter.
Moreover, the Fed expects the unemployment rate to drop below 7 percent (its target rate) next year, and to as low as 5.9 percent the year after that. Meanwhile, inflation this year will be as little as about 1 percent, and the Fed projects that it will remain below 2 percent for the next three years.
However, the Fed's Open Market Committee said the central bank will wait for "more evidence that progress will be sustained before adjusting the pace" of its money-pumping.
Even so, "economic growth will pick up from its recent pace, and the unemployment rate will decline," despite some downside risks to the economic outlook, according to the minutes of the committee's most recent meeting. And the Fed's monetary policy will "keep the target range for federal funds" at a zero to one-quarter percent interest rate as long as the jobless rate remains above 6.5 percent, the committee said.
So things may be looking good for some, and while the Fed isn't exactly painting a rosy picture, there are some favorable shadings. However, as reported earlier by the Census Bureau, income levels for the Great Middle have not changed for two years, and are still 8 percent lower than before the recession began. The Gilded Goslings of the fabled 1 percent have recovered, and then some, but they alone can't send the entire economy flying.
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