Business

USA.: The slump is continuing... Silvia Szarkova

Federal Reserve officials are not going to lower the interest rates anymore- even if the long lasting slump will lead to a contraction. Also the cuttings from last months were named as a “close call”. Fed has modified the forecast of economic growth and other development indexes for the year 2008 as the first half of the year tended to proof this. Instead of hoped gross domestic product rising to between 1.3 percent and 2 percent predicted in February of this year, Fed was pushed to correct this statement about future to just rise of between 0.3 percent and 1.2 percent. Gross domestic product presents the national output of all economic subject in United States. It is the basic measurement of economic growth changing from year to year and also varies among countries. Just to compare in numbers, the GDP of United Kingdom in 2007 was 2.9 per cent. This bad situation is continuing also in unemployment- it will probably rise to between 5.5 percent and 5.7 percent- not the best prognosis if you check out the year 2007- just 4.6 percent of unemployed people in America. The existing prices of oil and other important commodity prices also give many reason to think the inflation will threaten US in the rest of the year. On Wednesday the price of a barrel for oil pass the 130dollars border. The predicted inflation is now about 3.1 per cent to 3.4 per cent beating the earlier 2.1 to 2.4 per cent forecast. The Governor of Fed Kevin Warsh claimed Wednesday suggested that Fed will not be inclined to lower already low interest rates- the one-quarter reduction of their key rate to 2 per cent might be the last for long period from now on. Most members of Fed are hopeful about the upcoming half of the year. The series of powerful rate cuts and the amount of 168 billion government´s money should help and be the best stimulus package for American business paying already high metaphoric taxes.

related story: http://news.yahoo.com/s/ap/20080521/ap_on_bi_ge/fed_economy;_ylt=Amiz9d5Bxt8FNmY2xRAhZZus0NUE

by Silvia Szarkova for PocketNews (http://pocketnews.tv)

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edited by Tatiana Kucharikova

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