--Expect Q4 Real GDP to Grow by 1.8% vs Previous Estimate of +2.2%
--Q4 Nonfarm Payrolls Forecast To Grow 148.7k/Month Vs 135.3k Prev Est
--Panelists Trim Unemployment Forecasts For 2013, 2014, 2015
WASHINGTON (MNI) - A Philadelphia Federal Reserve Bank survey Friday shows while the overall outlook for the U.S. economy might be unchanged, forecasters lowered their projection for fourth quarter growth and have higher expectations for the pace at which employers will add new jobs.
Meanwhile projections for the unemployment rate from Q4 to the second quarter of 2013 were trimmed slightly, according to the Philadelphia Fed's fourth quarter survey of 39 professional forecasters.
The economists' outlook for the labor market has improved, predicting a slightly faster pace of decline in the unemployment rate between this year and 2015 compared to the previous survey.
The outlook for growth in the U.S. economy "was little changed" from the third quarter survey, the Philadelphia Fed said in its summary of the survey results.
"On an annual-average over annual-average basis, the forecasters see real GDP growing 2.2 percent in 2012, unchanged from their prediction in the survey of three months ago," it said.
The report said forecasters expect real GDP to grow at an annual rate of 1.8% this quarter, down from the previous estimate of 2.2%. Over the next three quarters, they expect GDP growth to average 2.1%, down from the previous average of 2.2%.
The forecasters predict real GDP will grow 2.0% in 2013 compared to the previous forecast of 2.1%, by 2.7% in 2014 -- unchanged from the last survey, and 2.9% in 2015, down from the previous expectations.
For the current quarter, the Philadelphia Fed said forecasters predict a 13.5% chance of negative growth vs. 17.0% in the survey of three months ago.
However, and perhaps influenced by the looming fiscal cliff and its predicted impact on growth in the first half of next year, predictions for GDP contraction in Q1 2013 were raised to 23.0% from 21.2%, while Q2 saw the chance of contraction upped to 21.7% from 21.0%.
With regard to the employment picture, the panelists expect the unemployment rate to average 7.9% in Q4, a downward revision from 8.1% in the third quarter survey. The 7.9% forecast for Q1 2013 and 7.8% for Q2 are little changed from the previous projections.
The survey said the unemployment is projected to be an annual average of 8.1% in 2012, before falling to 7.8% in 2013, 7.4% in 2014, and 6.9% in 2015. These outlooks are similar to those of the previous survey.
Forecasters are expecting a pickup in the pace at which jobs are added going forward compared to the last survey, with the exception of Q1 2013 -- again likely due to the fiscal cliff.
Still, it should be noted that their forecasts remain nowhere near the at least 200,000 jobs-per-month pace that most agree is needed to get the economic recovery going at full speed.
They see nonfarm payroll employment growing at a rate of 148,700 jobs per month this quarter (compared to 135,300 estimated in the last survey), but then the pace drops off to 127,400 jobs per month next quarter -- compared to the Q3 estimate of 151,700.
The forecasters' projections for the annual-average level of nonfarm payroll employment suggest job gains at a monthly rate of 155,600 in 2012 and 143,300 in 2013.
CPI - Not Including
FOOD &
ENERGY
On the inflation front, the Philadelphia Fed said the forecasters see little reason to adjust their projections, although estimates for headline consumer prices indicate forecasters expect a small rise in near-term inflation.
They predict current-quarter headline CPI inflation to average 2.3%, up from 2.0% in the last survey. Their prediction for current-quarter headline PCE inflation is unchanged at 2.0%.
Current-quarter core PCE is projected to rise by 1.6%, while core CPI is expected to come in at 1.8% -- down from 2.0% in the previous survey.
Measured on a fourth-quarter over fourth-quarter basis, headline CPI inflation is expected to average 1.9% in 2012, a slight uptick from 1.8% in the last survey. The forecasts for 2.2% in 2013 and 2.3% in 2014 are the same as they were in the last survey.
Forecasters also expect fourth-quarter over fourth-quarter headline PCE inflation at levels unchanged from the previous survey: 1.7% in 2012, 2.0% in 2013, and 2.2% in 2014.
Over the next 10 years, the forecasters expect headline CPI inflation to average 2.30% at an annual rate, a lower estimate compared to the last survey, when the forecasters thought headline CPI inflation from 2012 to 2021 would average 2.35%.
The Philadelphia Fed noted there is also a small derease in the corresponding estimate for 10-year annual-average headline PCE inflation, now at 2.10% from 2.20% previous.
Source:
MNI Deutsche Boerse Group
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