The Federal Reserve today said the recovery from the current recession will be slower than originally expected and this year will be characterized by difficult economic conditions.
The Fed's Open Market Committee, its policymaking body, projected unemployment could be as high as 8.8% this year, it previously had projected it would top out between 7.1% and 7.6%. In January, unemployment was 7.6%.
The panel also said the GDP will drop by 1.3% this year, compared to its earlier projection of a 1.1% drop.
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The committee said there is a "continued sharp contraction in real economic activity" and the recovery will be "unusually gradual and prolonged."
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