FACTBOX-Fed staff forecasts from FOMC minutes

NOV 3-4 FOMC: Minutes released on Nov. 24:

"In the forecast prepared for the November FOMC meeting,
the staff raised its projection for real GDP growth over the
second half of 2009 but left the forecast for output growth in
2010 and 2011 roughly unchanged. The spending and production
data received during the intermeeting period suggested that
economic activity, especially household spending, was a little
stronger in the summer than previously estimated. Also,
industrial production increased more than had been anticipated
at the September meeting. But with labor market conditions
somewhat weaker than anticipated, earlier declines in wealth
still weighing on household balance sheets, and measures of
consumer sentiment relatively low, the staff did not take much
signal from the recent unexpected strength in spending and
output. Indeed, the staff boosted its projection for the
unemployment rate over the next several years. Still, the staff
continued to believe that several factors that were restraining
spending would gradually fade. The staff anticipated that the
strengthening of the recovery in real output during 2010 and
2011 would be supported by an ongoing improvement in financial
conditions and household balance sheets, continued recovery in
the housing sector, improved household and business confidence,
and accommodative monetary policy even as the impetus to real
activity from fiscal policy diminished.

"The staff forecast for inflation was little changed from
the September meeting. Although oil prices moved higher, likely
boosting near-term inflation, the staff also revised up its
estimate of the degree of slack in the economy, leaving the
forecast for total and core PCE inflation over the next two
years little changed. With significant underutilization of
resources expected to persist for several years, the staff
continued to project that core inflation would slow somewhat
further over the next two years."