February 16th, 2011

Federal Reserve officials were slightly more optimistic last month about economic growth for this year than they were in November, reflecting expected gains in consumer and business spending from tax cuts.

In an updated forecast released Wednesday, they said they believe the economy will grow 3.4% to 3.9% this year. That’s an upward revision from their November forecast, which predicted gross domestic product would grow 3% to 3.6%.

The latest outlook foresees little improvement in the unemployment rate. The central bank predicts that rate, now 9%, will end the year at that level, or possibly dip to 8.8%.

The Fed doesn’t expect the slightly faster growth to trigger high inflation. Its latest forecast is for prices to rise 1.3% to 1.7%. That’s only slightly more than its November projection, which expected consumer prices to increase 1.1% to 1.7% in 2011.

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