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Forecasters Predict Slower Growth over Next Four Years

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Contact: Marilyn Wimp, E-mail manager of media relations, (215) 574-4119

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Growth in the U.S. economy looks a little slower now than it did three months ago, according to 44 forecasters surveyed by the Federal Reserve Bank of Philadelphia in the Second Quarter Survey of Professional Forecasters.


  • The forecasters see real GDP growing at an annual rate of 3.2 percent this quarter, down from the previous estimate of 3.5 percent.
  • The forecasters see real GDP growing 2.7 percent in 2011, down from their prediction of 3.2 percent in the last survey.
  • The forecasters predict real GDP will grow 3.0 percent in 2012, 2.8 percent in 2013, and 3.3 percent in 2014.

Labor Market

  • Unemployment is projected to be an annual average of 8.7 percent in 2011, 8.1 percent in 2012, and 7.5 percent in 2013.
  • The forecasters see slower growth in jobs in 2011 and 2012 than they predicted in the last survey. They see nonfarm payroll employment growing at a rate of 191,100 jobs per month this quarter and 194,500 jobs per month next quarter.
  • The forecasters' projections for the annual-average level of nonfarm payroll employment suggest job gains at a monthly rate of 130,400 in 2011 and 194,800 in 2012.


  • The forecasters predict higher inflation, both in the short run and over the long run, for the survey's four measures of inflation.
  • The forecasters expect current-quarter headline CPI inflation to average 3.5 percent, up from the last survey's estimate of 1.3 percent. They also predict a higher current-quarter headline PCE inflation of 2.7 percent, up from the last survey's estimate of 1.3 percent.
  • Headline CPI inflation is expected to average 3.1 percent in 2011, 2.2 percent in 2012, and 2.3 percent in 2013, higher than the forecasts of 1.7 percent, 2.0 percent, and 2.1 percent respectively, in the last survey.
  • The forecasters predict a higher current-quarter headline PCE inflation of 2.7 percent, up from the last survey's estimate of 1.3 percent.

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

"The forecasters see somewhat slower real GDP growth over the next four years than they predicted three months ago. At the same time, the forecasters see improvement on the unemployment front. On the inflation front, the projections are higher at all horizons. Most importantly, our closely watched indicators of long-run inflation have moved higher."

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 third quarter 2011 Survey of Professional Forecasters will be released at 10 a.m., Friday, August 12. See the schedule of releases.

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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