FACTBOX-Fed staff forecasts from FOMC minutes

MARCH 17-18 FOMC: Minutes released on April 8:

"In the forecast prepared for the meeting, the staff re-vised down its
outlook for economic activity. The de-terioration in labor market conditions
was rapid in re-cent months, with steep job losses across nearly all sec-tors.
Industrial production continued to contract ra-pidly as firms responded to the
falloff in demand and the buildup of some inventory overhangs. The incom-ing
data on business spending suggested that business investment in equipment and
structures continued to decline. Single-family housing starts had fallen to a
post-World War II low in January, and demand for new homes remained weak. Both
exports and imports retreated significantly in the fourth quarter of last year
and appeared headed for comparable declines this quarter. Consumer outlays
showed some signs of sta-bilizing at a low level, with real outlays for goods
out-side of motor vehicles recording gains in January and February. Financial
conditions overall were even less supportive of economic activity, with broad
equity in-dexes down significantly amid continued concerns about the health of
the financial sector, the dollar stronger, and long-term interest rates higher.
The staff's projections for real GDP in the second half of 2009 and in 2010
were revised down, with real GDP expected to flatten out gradually over the
second half of this year and then to expand slowly next year as the stresses in
financial markets ease, the effects of fiscal stimulus take hold, inventory
adjustments are worked through, and the correction in housing activity comes to
an end. The weaker trajectory of real output re-sulted in the projected path of
the unemployment rate rising more steeply into early next year before
flattening out at a high level over the rest of the year. The staff forecast
for overall and core personal consumption expenditures (PCE) inflation over the
next two years was revised down slightly. Both core and overall PCE price
inflation were expected to be damped by low rates of resource utilization,
falling import prices, and easing cost pressures as a result of the sharp net
de-clines in oil and other raw materials prices since last summer."