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Forecasters See Stronger Labor Market

For release: 10 a.m., February 10, 2012
Contact: Katherine Dibling, E-mail Public Affairs Specialist, (215) 574-4119

The 45 participants in the first quarter Survey of Professional Forecasters see a stronger labor market, but their outlook for growth is mostly unchanged from that of three months ago.


  • The forecasters see real GDP growing at an annual rate of 2.2 percent this quarter, down from the previous estimate of 2.4 percent.
  • The forecasters see real GDP growing 2.3 percent in 2012. Three months ago, they expected growth of 2.4 percent.
  • The forecasters predict real GDP will grow 2.7 percent in 2013, 3.0 percent in 2014, and 3.1 percent in 2015.

Labor Market

  • Unemployment is projected to be an annual average rate of 8.3 percent in 2012, before falling to 7.9 percent in 2013, 7.4 percent in 2014, and 6.7 percent in 2015.
  • The forecasters have revised upward their estimates of growth in jobs in three out of the next four quarters. They see nonfarm payroll employment growing at a rate of 160,100 jobs per month this quarter and 141,900 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 144,100 in 2012 and 162,900 in 2013.


  • The forecasters expect current-quarter headline CPI inflation to average 2.0 percent, unchanged from the last survey’s estimate. The forecasters predict current-quarter headline PCE inflation of 1.7 percent, also unchanged from the survey of three months ago.
  • The outlook for the headline and core measures of CPI and PCE inflation during the next two years remains mostly unchanged.
  • Measured on a fourth-quarter over fourth-quarter basis, headline CPI inflation is expected to average 2.0 percent in 2012, up from 1.9 percent in the last survey, and 2.2 percent in 2013, unchanged from the previous estimate.
  • Forecasters expect fourth-quarter over fourth-quarter headline PCE inflation to average 1.9 percent in 2012, up from 1.7 percent in the last survey, and 2.0 percent in 2013, unchanged from the previous estimate.

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

“The forecasters are more optimistic about conditions in the labor market over the next four years than they were three months ago. Yet, their expectations for real GDP growth over the next two years are nearly unchanged. The forecasters also see lower risks of a downturn over the next four quarters. For the current quarter, the forecasters peg the odds of a downturn at 9.5 percent, down from 16.6 percent previously.”

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 second quarter 2012 Survey of Professional Forecasters will be released at 10 a.m., Friday, May 11, 2012. 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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