WASHINGTON (AP) - Federal Reserve officials were slightly more optimistic last month about economic growth for this year than they were in November, reflecting expected gains in consumer and business spending from tax cuts.
Fed officials said in an updated forecast released Wednesday that they think the economy will grow between 3.4 percent and 3.9 percent this year. That's an upward revision from their November forecast, which predicted gross domestic product will grow 3 percent to 3.6 percent.
The latest outlook foresees little improvement in the unemployment rate. The central bank predicts that the rate, now at 9 percent, will end the year at that level or possibly dip to 8.8 percent.
The Fed doesn't expect the slightly faster growth to trigger high inflation. Its latest forecast is for prices to rise 1.3 percent to 1.7 percent. That's only slightly more than its November projection, which expected consumer prices to increase 1.1 percent to 1.7 percent in 2011.
Factory output up for 5th month
Factories produced more goods for the fifth straight month in January as strong auto sales spurred demand for new cars and trucks. But overall industrial production fell for the first time in 19 months.
Output by the nation's factories, mines and utilities dipped 0.1 percent last month, the Federal Reserve said Wednesday. The decline was caused mostly by a decrease in output by utilities after a weather-related peak in December.
Wholesale prices rise again
Wholesale prices rose sharply in January due to higher costs for gas, pharmaceuticals and other goods. Excluding the volatile food and energy categories, wholesale prices rose by the most since October 2008.
The Labor Department said Wednesday that the Producer Price Index rose by 0.8 percent last month, down slightly from December's revised 0.9 percent increase. Gas prices jumped 6.9 percent, while food prices moved up only 0.3 percent, less than many economists forecast.
Borders files for bankruptcy
Bookseller Borders, which helped pioneer superstores that put countless mom-and-pop bookshops out of business, filed for bankruptcy protection Wednesday, sunk by crushing debt and sluggishness in adapting to a rapidly changing industry.
The 40-year-old company plans to close about 200 of its 642 stores over the next few weeks. All of the stores closed will be superstores, Borders spokeswoman Mary Davis said. The company also operates smaller Waldenbooks and Borders Express stores.