Fed adjusts economic forecast for 2009

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The nation’s economic woes are expected to worsen more this year than previously thought, according to a report released Wednesday by the Federal Reserve.

The Federal Reserve estimates unemployment could climb as high as 8.8 percent and that the economy would contract for a full calendar year for the first time since 1991, according to an Associated Press story.

The earlier prediction, issued in mid-November, estimated the jobless rate would grow to between 7.1 and 7.6 percent.

The Fed also believes the economy will contract between 0.5 and 1.3 percent. The earlier forecast said the economy could shrink by 0.2 percent or expand by 1.1 percent, the Associated Press reports.

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