Reuters.com reports the U.S. recession looks to be longer and more severe than originally thought, but there are signs that the economy will improve in the second half of 2009, a top Federal Reserve official said. "It appears the economy contracted quite significantly in the final quarter of 2008 and may continue contracting over at least the first half of 2009. We are seeing businesses retrenching and unemployment rising," Boston Federal Reserve Bank President Eric Rosengren told the Massachusetts Mortgage Bankers Association's Annual Meeting. "As a result, this recession looks to be longer and more severe than originally forecast. Still, there are indications that the second half of the year will show improvement," he said. Lower energy prices and concerted monetary and fiscal policy efforts should set the stage for a recovery later in 2009, he said. "Energy prices have fallen dramatically, making it much less expensive to drive cars or heat homes," he said, "Fiscal stimulus packages being discussed in Washington could provide an economic boost. And monetary policy is also contributing," he added.
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