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Forecasters See Improved Prospects for Growth, But A More Sluggish Labor Market
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Upward revisions to the rate of growth in real GDP characterize the current outlook for the U.S economy over the next four years, according to 34 forecasters surveyed by the Federal Reserve Bank of Philadelphia. The forecasters project growth at an annual rate of 2.4 percent this quarter, up from their previous estimate of 0.4 percent in the last survey. The forecasters expect steady growth to follow over each of the following four quarters. They have also raised their estimates for growth roughly 0.2 percentage point over each of the next four years. Annual-average over annual-average growth is now seen rising from -2.6 percent this year (-2.8 percent previously) to 3.2 percent in 2012 (3.0 percent previously), as shown in the table below.
Upward revisions to unemployment and downward revisions to job growth accompany the current outlook for growth. The unemployment rate will average 9.2 percent this year, up from the forecasters' previous projection of 9.1 percent. Unemployment is seen rising to 9.6 percent next year. The forecasters see unemployment falling in 2011 and 2012 — but to levels higher than they predicted previously. Unemployment will average 8.9 percent in 2011, up from 8.7 percent in the last survey, and 8.0 percent in 2012, up from 7.7 percent. Nonfarm payroll employment will fall at a rate of 416,000 jobs per month this year and 25,000 jobs per month in 2010. Previously, the forecasters projected job losses in 2010 at a rate of 14,000 jobs per month
Posted: August 14, 2009 Friday 10:00 AM