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Forecasters See Weaker Growth

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

The outlook for growth in the U.S. economy looks weaker now than it did three months ago, according to the participants in the Third Quarter Survey of Professional Forecasters. The forecasters also see weaker conditions in the labor market.


The forecasters expect real GDP to grow at an annual rate of 1.6 percent this quarter, down from the previous estimate of 2.5 percent. The forecasters see real GDP growing 2.2 percent in 2012. Three months ago, they expected growth of 2.3 percent. Projections for real GDP are 2.1 percent in 2013, 2.7 percent in 2014, and 3.1 percent in 2015.

Labor Market

The unemployment rate is projected to be 8.2 percent in 2012, before falling to 7.9 percent in 2013, 7.3 percent in 2014, and 7.0 percent in 2015. The estimates for unemployment are slightly higher than the projections in the last survey.

The forecasters have revised downward their estimates of growth in jobs over the next four quarters. They see nonfarm payroll employment growing at a rate of 125,000 jobs per month this quarter and 135,300 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 154,600 in 2012 and 143,200 in 2013.


The forecasters expect current-quarter headline CPI inflation to average 1.5 percent, down from the last survey’s estimate of 2.3 percent. The forecasters predict current-quarter headline PCE inflation of 1.5 percent, 0.4 percentage points lower than their previous estimate.

Measured on a fourth-quarter over fourth-quarter basis, headline CPI inflation is expected to average 1.8 percent in 2012, down from 2.3 percent in the last survey; 2.2 percent in 2013, up from 2.1 percent; and 2.3 percent in 2014, down from 2.5 percent.

Forecasters expect fourth-quarter over fourth-quarter headline PCE inflation to average 1.7 percent in 2012, down from 2.1 percent in the last survey; 2.0 percent in 2013, unchanged from the previous estimate; and 2.2 percent in 2014, also unchanged from the previous estimate.

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 2012 Survey of Professional Forecasters will be released at 10 a.m., Friday, November 9, 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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