WASHINGTON — Federal Reserve officials are more pessimistic about prospects for economic growth and employment than they were two months ago.
In an updated forecast, the Fed estimates that the economy will grow between 2.7 percent and 2.9 percent this year. That’s down from its April estimate of between 3.1 percent and 3.3 percent. The downgraded revision is an acknowledgement that the economy has slowed, in part because consumers have been squeezed by higher gasoline prices.
Growth at the rate the Fed is projecting won’t be enough to significantly lower unemployment, now at 9.1 percent. The Fed estimates that unemployment will still be around 8.6 percent to 8.9 percent by the end of the year.