The Federal Reserve said Wednesday that the economy will shrink by 3.7% this year — a rosier outlook than the 6.5% contraction initially projected in June.

• The Fed's economic outlook also indicated that the unemployment rate would be 7.6%, lower than the 9.6% it saw three months ago.

Why it matters: The economy is still wrecked by the coronavirus pandemic, but it has rebounded faster than some anticipated. Signs still suggest the recovery could stall out. The August unemployment rate is already lower than where the Fed, in June, said it would be by year-end.