Ford sees US economic recovery despite grim forecasts

Ford Motor Co assumes the U.S. economy will begin to recover by early 2010 despite oil prices that will remain "volatile and high," the automaker said on Thursday.

Photo: Ford sees US economic recovery despite grim forecasts

Ford detailed the assumptions as part of a restructuring plan intended to reduce its reliance on sales of pickup trucks and sport utility vehicles by shifting production to better-selling and more fuel-efficient small cars.

Ford also said in a statement that it would keep its Mercury brand in addition to Ford and Lincoln. The No. 2 U.S. automaker said its latest turnaround plan assumed that the three brands would maintain about a 14-percent market share in North America, Reuters reports.

The United States Federal Reserve's latest survey of the US economy outlines a grim situation, saying the country is struggling with slower growth and rising prices.

It says the pace of economic activity has slowed since last month and it describes consumer spending as sluggish or slowing across the country.

The report from the central bank also highlights inflation woes, saying that price pressures are elevated or increasing.

It says the troubled real estate market is showing few signs of life, with weak sales and declining prices in most of the country.

The new snapshot of business conditions will be used by the Federal Reserve when it meets early next month to decide whether to change interest rates.

Meanwhile, the US House of Representatives has approved a housing rescue plan to help thousands of home owners avoid foreclosure and restore confidence in the mortgage giants Fannie Mae and Freddie Mac, ABC News reports.

Source: agencies