Fed downgrades economic forecast for this year (AP)

Job seekers stand on line at a National Career Fairs job fair at the Radisson Martinique On Broadway Hotel Wednesday, Feb. 18, 2009, as hundreds lined up to get a shot at employment. The Department of Labor releases weekly jobless claim figures Thursday. (AP Photo/Craig Ruttle)AP – The Federal Reserve on Wednesday sharply downgraded its projections for the country’s economic performance this year, predicting the economy will actually shrink and unemployment will rise higher. Under the new projections, the unemployment rate will rise to between 8.5 and 8.8 percent this year. The old forecasts, issued in mid-November, predicted the jobless rate would rise to between 7.1 and 7.6 percent.

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