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Forecasters Predict Slower Growth

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Contact: Katherine Dibling, E-mail senior media representative, (215) 574-4119

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Growth in the U.S. economy is predicted to be slower in the short run compared to the forecast of three months ago, according to the 37 forecasters surveyed by the Federal Reserve Bank of Philadelphia in the Third Quarter Survey of Professional Forecasters.


  • The forecasters see real GDP growing at an annual rate of 2.2 percent this quarter, down from the previous estimate of 3.4 percent.
  • The forecasters see real GDP growing 1.7 percent in 2011, down from their prediction of 2.7 percent in the last survey.
  • The forecasters predict real GDP will grow 2.6 percent in 2012, 2.9 percent in 2013, and 3.1 percent in 2014.

Labor Market

  • Unemployment is projected to stand at the an annual average rate of 9.0 percent in 2011, 8.6 percent in 2012, 8.1 percent in 2013, and 7.6 percent in 2014. Each is modestly higher than the forecasts from the last survey.
  • 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 105,300 jobs per month this quarter and 148,700 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 111,500 in 2011 and 150,100 in 2012.


  • The forecasters predict lower headline inflation in the current quarter and slightly lower headline inflation over the next five years.
  • The forecasters expect current-quarter headline CPI inflation to average 1.5 percent, down from the last survey's estimate of 2.2 percent. They also predict a lower current-quarter headline PCE inflation of 1.5 percent, down from the last survey's estimate of 2.2 percent.
  • Headline CPI inflation is expected to average 3.2 percent in 2011, 2.0 percent in 2012, and 2.1 percent in 2013, compared to the forecasts of 3.1 percent, 2.2 percent, and 2.3 percent respectively, in the last survey.

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

“The economy looks weaker to the forecasters than it did in the last survey. We see downward revisions to the projections for growth, upward revisions to unemployment projections, and a higher risk of a downturn over the next five quarters. The forecasters peg the odds of a downturn at roughly 1 in 5, or 20 percent.”

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 fourth quarter 2011 Survey of Professional Forecasters will be released at 10 a.m., Monday, November 14. See the schedule of releases.

The Federal Reserve Bank of Philadelphia helps formulate and implement monetary policy, supervises banks and bank and savings and loan 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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