REWORK:National unemployment rate will be below 7 percent by 2014, says Federal ReserveJune 17, 2015 | Posted at 2:20 pm
The Federal Reserve believes that the U.S. unemployment will fall to between 6.5 and 6.8 percent by the end of 2014, predicting that the labor market will continue to benefit from an ongoing economic recovery.
According to Bloomberg, officials at the Fed are confident that the national jobless rate will see a steady progression downwards from it’s current level of 7.6 percent, with the government agency seeing a 2015 rate of 5.8 to 6.2 percent as an achievable target. Economists have said that the announcement shows that the Fed is already looking to make good on its promise to keep short-term interest rates at close to zero until the unemployment threshold falls to 6 percent or less, an important barometer of how the economy has bounced back after the financial downturn of 2008.
These forecasts differ from figures released by the Fed in March, which predicted that the jobless rate would remain near the 7 percent threshold by the end of 2014, while hovering around the 6.5 percent mark in 2015. Financial analysts have credited the increase in consumer spending as one of the reasons for the seemingly bullish attitude being demonstrated by the Fed, with the news source reporting a 2.4 percent annual rise in the economy in the first quarter of the year, already exceeding the anticipated 2.3 percent advised by the agency in its initial assessments.
“Labor market conditions have shown further improvement in recent months, on balance, but the unemployment rate remains elevated,” said a spokesperson for the Federal Open Market Committee, according to USA Today, adding that, “the Committee seeks to foster maximum employment and price stability. The Committee expects that, with appropriate policy accommodation, economic growth will proceed at a moderate pace and the unemployment rate will gradually decline toward levels the Committee judges consistent with its dual mandate.”