In this January 5, 1965, file photo, actors in a Hollywood movie dance “the twist” in Malibu, Calif. The Federal Reserve announced Wednesday, June 20, 2012, it is extending its “Operation Twist” program, which is named after the dance craze in an a nod to economic history when the Kennedy administration cut long-term rates while leavings short-term rates alone in the early 1960s. The program is designed to spur borrowing and spending. (AP Photo/File)MARTIN CRUTSINGER
WASHINGTON (AP) – The economy we’ve got today is more or less the economy we’ve got for the rest of the year.
That’s the message from the Federal Reserve, which has sharply reduced its forecast for U.S. growth. It sees unemployment barely budging in the rest of 2012.
The Fed also says the economy is under threat from Europe’s debt crisis and from the prospect of sharp spending cuts and tax increases that will kick in at year’s end unless Congress acts.
None of which is comforting for companies, job seekers or President Barack Obama, whose re-election hinges in part on whether the economy improves between now and November.