Jobs growth should improve slightly more than previously expected, while economic growth projections were mostly lowered in the second quarter survey of professional forecasters, released Friday by the Federal Reserve Bank of Philadelphia.
Projections for the unemployment rate were cut 0.1-percentage point throughout and now drop from 7.6% in the second quarter to 7.5% in the third, 7.4% in the final quarter of 2013, 7.3% in the first quarter of 2014 and 7.2% by mid-year.
GDP growth projections, on the other hand, were cut to 1.8% from 2.3% for this quarter, dropped to 2.3% from 2.6% for next quarter, increased to 2.7% from 2.5% for the final quarter of the year, and cut to 2.5% from 2.7% for the first quarter of 2014. In the second quarter of 2014, growth is seen at 3.2%.
Inflation expectations were also cut to 1.6% from 2.1% for this quarter and to 2.0% from 2.1% for the following three quarters, as measured by headline CPI. In the second quarter of 2014 inflation is expected to hit 2.2%. The core rate projection was also cut 0.1-percentage pints this quarter, to 1.9%, but kept steady at 2.0% for the ensuing three quarters, and rising to 2.1% for the second quarter of next year.
The forecasters also cut the expectations of a negative quarter to 14.6% this quarter, falling to a one in eight chance in the second quarter of 2014.