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Fourth Quarter 2019 Survey of Professional Forecasters

Lower Near-Term Growth

The U.S. economy for the next four quarters looks weaker now than it did three months ago, according to 39 forecasters surveyed by the Federal Reserve Bank of Philadelphia. The panel predicts real GDP will grow at an annual rate of 1.7 percent this quarter, down from 2.0 percent in the last survey, 1.9 percent next quarter, and 1.7 percent in each of the two following quarters. On an annual-average over annual-average basis, the forecasters expect real GDP to grow 2.3 percent in 2019, 1.8 percent in 2020, and 2.0 percent in 2021 and 2022, respectively.

A steady outlook for the unemployment rate accompanies the outlook for growth. The forecasters predict the unemployment rate will average 3.7 percent from 2019 to 2021 and 3.9 percent in 2022. Notably, the projections for 2021 and 2022 are below those of the last survey.

On the employment front, the forecasters have marginally revised upward their estimates for job gains over the next two years. The projections for the annual-average level of nonfarm payroll employment suggest job gains at a monthly rate of 191,700 in 2019 and 143,800 in 2020. (These annual-average estimates are computed as the year-to-year change in the annual-average level of nonfarm payroll employment, converted to a monthly rate.) 

Median Forecasts for Selected Variables in the Current and Previous Surveys
Real GDP (%)
Unemployment Rate (%)
Payrolls (000s/month)
Quarterly data:
2019:Q4 2.0 1.7 3.6 3.6 148.1 162.9
2020:Q1 1.9 1.9 3.6 3.6 137.6 133.1
2020:Q2 2.0 1.7 3.6 3.6 145.8 159.4
2020:Q3 2.0 1.7 3.7 3.7 108.3 122.5
2020:Q4 N.A. 1.9 N.A. 3.7 N.A. 127.3
Annual data (projections are based on annual-average levels):
2019 2.3 2.3 3.7 3.7 190.6 191.7
2020 1.9 1.8 3.6 3.7 141.2 143.8
2021 2.0 2.0 3.9 3.7 N.A. N.A.
2022 2.1 2.0 4.0 3.9 N.A. N.A.

The charts below provide some insight into the degree of uncertainty the forecasters have about their projections for the rate of growth in the annual-average level of real GDP. Each chart presents the forecasters’ previous and current estimates of the probability that growth will fall into each of 11 ranges. The charts show the forecasters have revised upward their estimates of the probability that real GDP will grow below 2.0 percent in 2021 and 2022.

The forecasters’ density projections for unemployment, shown below, shed light on uncertainty about the labor market over the next four years. Each chart presents the forecasters’ current estimates of the probability that unemployment will fall into each of 10 ranges. The charts show that the estimates of uncertainty about the unemployment rate from 2020 to 2022 have changed little from those in the survey of three months ago.

Marginally Higher Inflation Beyond the Current Quarter

The forecasters expect current-quarter headline CPI inflation to average 1.8 percent, down from 2.1 percent in the last survey. Headline PCE inflation for the current quarter will be 1.6 percent, down 0.3 percentage point from the previous estimate.

The forecasters’ projections for inflation beyond the current quarter are marginally higher compared with the previous survey.

The long-horizon inflation projections are holding steady. Over the next 10 years, 2019 to 2028, the forecasters expect headline CPI inflation to average 2.20 percent at an annual rate, unchanged from the previous estimate. The corresponding estimate for 10-year annual-average PCE inflation is 2.00 percent, also unchanged from the estimate of three months ago.

Median Short-Run and Long-Run Projections for Inflation (Annualized Percentage Points)
Headline CPI
Core CPI
Headline PCE
Core PCE
2019:Q4 2.1 1.8 2.1 2.2 1.9 1.6 1.9 1.9
2020:Q1 2.0 2.2 2.2 2.3 1.9 2.0 2.0 2.0
2020:Q2 2.0 2.1 2.1 2.2 1.8 2.0 1.9 2.0
2020:Q3 2.1 2.2 2.1 2.2 1.9 1.9 1.9 2.0
2020:Q4 N.A. 2.1 N.A. 2.2 N.A. 1.9 N.A. 2.0
Q4/Q4 Annual Averages
2019 1.9 1.8 2.1 2.3 1.6 1.5 1.7 1.8
2020 2.0 2.1 2.2 2.3 1.9 1.9 2.0 2.0
2021 2.2 2.2 2.1 2.2 2.0 2.0 1.9 1.9
Long-Term Annual Averages
2019-2023 2.09 2.20 N.A. N.A. 1.90 1.90 N.A. N.A.
2019-2028 2.20 2.20 N.A. N.A. 2.00 2.00 N.A. N.A.

The charts below show the median projections (the red line) and the associated interquartile ranges (gray areas around the red line) for the projections for 10-year annual-average CPI and PCE inflation. The charts highlight unchanged projections for the long-term inflation rate, compared with those of the last survey.

The figures below show the probabilities that the forecasters are assigning to each of 10 possible ranges for fourth-quarter over fourth-quarter core PCE inflation in 2019 and 2020. For 2020, the forecasters have increased the probability that core PCE inflation will be between 1.5 and 2.4 percent.

Risk of a Negative Quarter Mostly Lower

The forecasters have revised downward the chance of a contraction in real GDP in three of the next four quarters. For the current quarter, the forecasters predict a 12.8 percent chance of negative growth, down from 14.2 percent in the survey of three months ago.

Risk of a Negative Quarter (%)
Survey Means
Quarterly data: Previous New


Technical Notes

Moody's Aaa and Baa Historical Rates

The historical values of Moody's Aaa and Baa rates are proprietary and, therefore, not available in the data files on the Bank’s website or on the tables that accompany the survey’s complete write-up in the PDF.

The Federal Reserve Bank of Philadelphia thanks the following forecasters for their participation in recent surveys:

Lewis Alexander, Nomura Securities; Scott Anderson, Bank of the West (BNP Paribas Group); Robert J. Barbera, Johns Hopkins University Center for Financial Economics; Peter Bernstein, RCF Economic and Financial Consulting, Inc.; Wayne Best and Michael Brown, Visa, Inc.; Jay Bryson, Wells Fargo; J. Burton, G. Ehrlich, D. Manaenkov, W. Song, and A. Thapar, RSQE, University of Michigan; Christine Chmura, Ph.D., and Xiaobing Shuai, Ph.D., Chmura Economics & Analytics; Gary Ciminero, CFA, GLC Financial Economics; Gregory Daco, Oxford Economics USA, Inc.; Rajeev Dhawan, Georgia State University; Bill Diviney, ABN AMRO Bank NV; Michael R. Englund, Action Economics, LLC; Michael Gapen, Barclays Capital; Sacha Gelfer, Bentley University; James Glassman, JPMorgan Chase & Co.; Jan Hatzius, Goldman Sachs; Brian Higginbotham, U.S. Chamber of Commerce; Peter Hooper, Deutsche Bank Securities, Inc.; Fred Joutz, Benchmark Forecasts; Sam Kahan, Kahan Consulting Ltd. (ACT Research LLC); N. Karp, BBVA Research USA; Walter Kemmsies, Jones Lang LaSalle; Jack Kleinhenz, Kleinhenz & Associates, Inc.; Thomas Lam, Sim Kee Boon Institute, Singapore Management University; L. Douglas Lee, Economics from Washington; John Lonski, Moody’s Capital Markets Group; Macroeconomic Advisers, IHS Markit; Robert McNab, Old Dominion University; R. Anthony Metz, Pareto Optimal Economics; R. M. Monaco, TitanRM; Michael Moran, Daiwa Capital Markets America; Joel L. Naroff, Naroff Economic Advisors; Mark Nielson, Ph.D., MacroEcon Global Advisors; Brendon Ogmundson, BC Real Estate Association; Philip Rothman, East Carolina University; Chris Rupkey, MUFG Union Bank; Sean M. Snaith, Ph.D., University of Central Florida; Constantine G. Soras, Ph.D., CGS Economic Consulting/Montclair State University; Stephen Stanley, Amherst Pierpont Securities; Charles Steindel, Ramapo College of New Jersey; Susan M. Sterne, Economic Analysis Associates, Inc.; James Sweeney, Credit Suisse; Thomas Kevin Swift, American Chemistry Council; Maira Trimble, Eaton Corporation; Gary Wagner, University of Louisiana at Lafayette; Mark Zandi, Moody’s Analytics; Ellen Zentner, Morgan Stanley.

This is a partial list of participants. We also thank those who wish to remain anonymous.

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Fourth Quarter 2019 PDF

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For further information about the Survey of Professional Forecasters, contact:

Tom Stark
Federal Reserve Bank of Philadelphia
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Philadelphia, PA 19106
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