NEW YORK – Forecasters see moderate growth ahead for the U.S. economy, with real GDP growing at an annual rate of 2.3% in the second half of 2010, 2.5% early next year, and 2.9% in the last six months of 2011, according to the 33 participants in the Federal Reserve Bank of Philadelphia’s December Livingston Survey.
These estimates are lower than those of six months ago, when forecaster expected 3.3% growth in this half year and 3.0% next year.
The forecasts for unemployment rates were also revised higher, with projections of 9.6% in December, 9.4% in June 2011, before dipping to 9.2% by the end of 2011.
The forecasters cut projections for inflation, with consumer prices (CPI) seen increasing at an annual rate of 1.6% this year and next. Meanwhile, producer prices are expected to surge 4.1% this year and 1.9% next year.
Forecasts for interest rates on three-month Treasury bills and 10-year Treasury bonds are lower than those made in the last survey. At the end of June 2011, the interest rate on three-month Treasury bills is predicted to be 0.19%, revised down from 1.21% in the survey of six months ago. Livingston forecasters predict that the rate will then rise slightly to 0.35% in December 2011, and then rise to 1.63% in December 2012. The interest rate on 10-year Treasury bonds is predicted to reach 2.93% at the end of June 2011, down from the previous estimate of 4.28%. According to the forecasters, it will then rise to 3.26% in December 2011, and to 4.00% at the end of 2012.
