Federal Reserve officials have lowered their expectations for economic growth and employment.  In April, the Fed estimated that the economy would grow in the range of 3.1-3.3%;  today, they see growth at 2.7-2.9%.  This is an acknowledgement that the economy has slowed, in part because consumers have been squeezed by higher gasoline prices.

Such a projected growth rate won't be enough to significantly lower unemployment, now at 9.1%.  The Fed estimates year-end unemployment at 8.6-8.9%.  However, Fed Chairman Ben Bernanke said the reasons for the slower recovery are expected to be temporary:

"The recovery appears to be proceeding at a moderate pace though somewhat more slowly than the committee expected and some recent labor market indicators have been weaker than expected."

The Fed chairman also said that the case for a third round of quantitative easing just isn't there yet.

In Line With Private Economists.  The Fed's downward revisions were in line with private economists.  The latest poll of top economists surveyed by The Associated Press showed they expect the unemployment rate will be 8.7% at year's end, and that the economy will grow 2.6% this year.  The economy grew at an anemic 1.8% annual rate in the first 3 months of the year.  Many economists believe the economy is expanding only slightly more in the current quarter.

The Fed trimmed the top range for overall inflation in the new forecast - reflecting the fact that the spike in energy prices earlier this year has begun to recede.  The central bank now sees inflation rising 2.3-2.5% this year, as measured by a price gauge tied to consumer spending.  That compares with an April forecast that showed a higher upper range of 2.8%.

For further details and charts, go to:   [CNBC.com, 6/22/11]