Professional forecasters see gross domestic product growth at 1.2% this quarter and 0.7% in the fourth quarter, both much lower than when they were surveyed three months ago by the Federal Reserve Bank of Philadelphia.
In the May survey, the forecasters predicted growth this quarter of 1.7% followed by 1.8% growth next quarter.
The forecasts for 2009 were also slashed, to 1.6% for the first quarter, and 2.1% growth in the second. The prediction for third quarter 2009 is 2.5% growth.
Meanwhile, forecasts for the jobless rate were revised up to 5.7% this quarter, 5.8% next quarter, and 6.0% in each of the first three quarters of 2009. Along with higher unemployment, the forecasters see job losses of 46,500 a month this quarter, 45,400 next quarter, and 29,800 in the first quarter of 2009 before jobs start growing at a rate of 57,900 a month in the second quarter and 63,100 in third-quarter 2009.
“The risk for a quarter of negative growth in real GDP has risen,” the survey said, with the biggest likelihood a 46.6% chance in the fourth quarter of 2008, up from 29.9% in the last survey.
