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Forecasters See Slower Pace of Economic Recovery

For release: 10 a.m.,
Contact: Katherine Dibling, E-mail senior media representative, (215) 574-4119

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The outlook for growth in the U.S. economy looks weaker now than it did just three months ago, according to the 36 participants in the Third Quarter Survey of Professional Forecasters. The downward revision to growth is accompanied by weaker conditions in the labor market.

The forecasters have reduced their projections for Inflation, but they see little risk of deflation. In addition, they report a slightly higher chance of a downturn.

For commentary on the third quarter survey, listen to the podcast. Audio Interview


  • The forecasters see real GDP growing at an annual rate of 2.3 percent this quarter, down from the previous estimate of 3.3 percent.
  • The forecasters see real GDP growing 2.9 percent in 2010, down from their prediction of 3.3 percent in the last survey.
  • The forecasters predict real GDP will grow 2.7 percent in 2011, 3.6 percent in 2012, and 2.6 percent in 2013.

Labor Market

  • Unemployment is now projected to be an annual average of 9.6 percent in 2010, before falling to 9.2 percent in 2011, 8.2 percent in 2012, and 7.3 percent in 2013. These estimates are higher than the projections in the last survey.
  • The forecasters see nonfarm payroll employment growing at a rate of 8,000 jobs per month this quarter and 114,100 jobs per month next quarter.
  • The forecasters' projections for the annual average level of nonfarm payroll employment suggest job losses at a monthly rate of 45,200 in 2010.


  • The current outlook for the headline and core measures of CPI and PCE inflation during the next two years is lower than it was in the last survey.
  • Over the next 10 years, 2010 to 2019, the forecasters expect headline CPI inflation to average 2.3 percent at an annual rate, down from 2.4 percent in the last survey.
  • The 10-year outlook for PCE inflation of 2.11 percent is slightly lower than that of the last survey.

Assistant Director and Manager, Real-Time Data Research Center, Tom Stark:

“The panelists have marked down their projections for growth and they see higher unemployment. Also, we see a slightly higher probability of a downturn in the next two quarters, as well as reduced expectations for inflation. However, it is important to keep things in perspective. The forecasters continue to see the economy growing steadily. They have raised their odds of a downturn but they do not think it is likely. The forecasters continue to project a downward path for unemployment. And, yes, they have reduced their projections for inflation but they do not believe that deflation is likely. ”

The Survey of Professional Forecasters is a quarterly survey of economic forecasters from across the country. Participants are asked to provide their projections for a broad range of macroeconomic variables including real GDP, nonfarm payroll employment, and inflation indicators such as CPI and PCE. It is the oldest survey of macroeconomic forecasts in the United States. The survey began in 1968 and was conducted by the American Statistical Association and the National Bureau of Economic Research. The Federal Reserve Bank of Philadelphia took over the survey in 1990.

The Federal Reserve Bank of Philadelphia helps formulate and implement monetary policy, supervises banks and bank holding companies, and provides financial services to depository institutions and the federal government. It is one of the 12 regional Reserve Banks that, together with the Board of Governors in Washington, D.C., make up the Federal Reserve System. The Philadelphia Federal Reserve Bank serves eastern Pennsylvania, southern New Jersey, and Delaware.


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