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Sunday, May 1, 2016

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Forecasters See Slowdown in Economic Recovery

For release: 10 a.m.,
Contact: Katherine Dibling, E-mail senior media representative, (215) 574-4119

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The pace of recovery in the U.S. economy looks a little slower now than it did three months ago, according to 43 forecasters who participated in the Fourth Quarter Survey of Professional Forecasters.

The panelists reduced their estimate for growth in real GDP over the next three years, and they also predict weaker recovery in the labor market. The current outlook for headline and core inflation measures is lower than it was in the third quarter. In addition, the forecasters see a lower chance of a downturn over the next few quarters.


  • The forecasters see real GDP growing at an annual rate of 2.2 percent this quarter, down from the previous estimate of 2.8 percent.
  • The forecasters see real GDP growing 2.7 percent in 2010, down from their prediction of 2.9 percent in the last survey.
  • The forecasters predict real GDP will grow 2.5 percent in 2011, 2.9 percent in 2012, and 3.0 percent in 2013.

Labor Market

  • Unemployment is now projected to be an annual average of 9.7 percent in 2010, before falling to 9.3 percent in 2011, 8.7 percent in 2012, and 7.9 percent in 2013. These estimates are higher than the projections in the last survey.
  • The forecasters have revised downward the growth in jobs over the next four quarters. They see nonfarm payroll employment growing at a rate of 86,600 jobs per month this quarter and 104,200 jobs per month next quarter.
  • The forecasters' projections for the annual average level of nonfarm payroll employment suggest job losses at a monthly rate of 56,100 in 2010.


  • The current outlook for the headline and core measures of CPI and PCE inflation during the next two years is lower than it was in the last survey.
  • Over the next 10 years, 2010 to 2019, the forecasters expect headline CPI inflation to average 2.2 percent at an annual rate, down from 2.3 percent in the last survey.
  • The 10-year outlook for PCE inflation of 2.00 percent is lower than that of the last survey.

Assistant Director and Manager, Real-Time Data Research Center, Tom Stark:

“The forecasters are reducing their estimates for real GDP growth and job gains over the next three years. They are also raising their estimates for the unemployment rate over the same time period.

“The current outlook is not dramatically different from the one of three months ago — but it does represent a downgrading of future prospects. The recession took a terrible toll on unemployment, and the forecasters now see unemployment recovering at an even slower pace than they predicted in the last survey.

“At the same time, the forecasters are trimming their estimates for inflation in 2011 and 2012. However, the forecasters continue to see almost no risk of an outright deflation. All in all, the current outlook is for a slightly softer economy than the forecasters predicted in the last survey.”

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 Federal Reserve Bank of Philadelphia helps formulate and implement monetary policy, supervises banks and bank 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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