Professional Forecasters See 3Q GDP Growing 2.2%

Third-quarter gross domestic product will show 2.2% growth and for the entire year GDP will be up 1.7%, according to the estimates by 37 forecasters surveyed by the Federal Reserve Bank of Philadelphia for its third-quarter survey of professional forecasters, released Friday.

These numbers are down from the previous estimate of 3.4% growth for the quarter and 2.7% for the year.

GDP growth is seen at 2.6% in 2012, 2.9% in 2013, and 3.1% in 2014.

Expectations for unemployment were pushed up slightly to annual rates of 9.0% for this year, 8.6% for next year, 8.1% for 2013, and 7.6% for 2014. Job growth projections were also altered down to an average 105,300 jobs added per month this quarter and 148,700 jobs added per month next quarter, bringing the average monthly rate to 111,500 this year and 150,100 next year.

Inflation, as measured by the consumer price index, is seen at 1.5% this quarter, compared to 2.2% in the previous estimate, with an average for this year of 3.2%, 2.0% next year, and 2.1% in 2013. When measured by the personal consumption expenditures, inflation is seen at 1.5% for this quarter, off from the previous estimate of 2.2% inflation.

“The economy looks weaker to the forecasters than it did in the last survey,” according to the Fed’s Tom Stark, assistant director and manager of its Real-Time Data Research Center. “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%.”

For reprint and licensing requests for this article, click here.
MORE FROM BOND BUYER