Mpls. Fed forecasts rising unemployment in 2009

Job Application
A job seeker fils out a job application. The Minneapolis Federal Reserve Board says it expects unemployment to rise in 2009.
Joe Raedle/Newsmakers

The Minneapolis Federal Reserve Bank says the economic downturn will continue in 2009, with unemployment rates rising and recovery in the home building and the real estate markets expected to take more than a year.

The outlook announced Wednesday is for Minnesota, the Dakotas, Montana, northwestern Wisconsin, and Michigan's Upper Peninsula.

Economists with the Minneapolis Fed says unemployment in the eastern part of its region will be worse. For example, Minnesota's unemployment rate could reach 7 percent by the end of 2009.

But in Montana and the Dakotas, the employment outlook is better because of strength in the natural resources and agriculture sectors.

The Fed's outlook is based on both a forecasting model and surveys of business leaders.