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But analysts think economic growth has slowed in the October-December quarter to an annual rate below 2 percent. Uncertainty about whether or how the fiscal cliff will be resolved has led some businesses to delay or reduce hiring and investment in major equipment. Many economists expect no improvement in the January-March quarter. The latest forecast from a panel of 48 economists with the National Association for Business Economics is that the economy will expand at an annual rate of 1.8 percent in the first quarter of 2013. Growth at that pace is considered too weak to significantly lower the unemployment rate, now at 7.7 percent. But economists say growth could strengthen in 2013 if Congress and the administration resolve their budget debate in a way that doesn't too drastically raise taxes or cut government spending. The Federal Reserve ended a policy meeting last week by deciding to extend its current level of $85 billion in monthly bond purchases indefinitely to try to keep long-term interest rates low. The Fed also for the first time tied any increase in a key short-term interest rate to a substantially improved job market. It said it planned to keep banks' overnight lending rates at a record low near zero until unemployment has fallen below 6.5 percent
-- as long as the outlook for inflation remains tame.
[Associated
Press;
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