Growth over the next two years is expected to be in the 3%-3.5% range. The participants in the survey have revised down their real GDP growth forecasts for Q2, and up for Q3 and Q4. Forecasts for 2012 and 2013 are a tad lower than at the Q1 survey (the column labelled "Previous"):
Real GDP (%) | Unemployment Rate (%) | Payrolls (000s/month) | ||||
|---|---|---|---|---|---|---|
Previous | New | Previous | New | Previous | New | |
| Quarterly data: | ||||||
| 2011:Q2 | 3.5 | 3.2 | 9.2 | 8.9 | 188.3 | 191.1 |
| 2011:Q3 | 3.1 | 3.4 | 9.0 | 8.7 | 201.1 | 194.5 |
| 2011:Q4 | 3.4 | 3.5 | 8.8 | 8.5 | 213.1 | 173.9 |
| 2012:Q1 | 3.1 | 2.9 | 8.7 | 8.4 | 201.4 | 219.4 |
| 2012:Q2 | N.A. | 2.5 | N.A. | 8.2 | N.A. | 182.0 |
| Annual data (projections are based on annual-average levels): | ||||||
| 2011 | 3.2 | 2.7 | 9.1 | 8.7 | 134.9 | 130.4 |
| 2012 | 3.1 | 3.0 | 8.5 | 8.1 | 226.1 | 194.8 |
| 2013 | 3.0 | 2.8 | 7.8 | 7.5 | N.A. | N.A. |
| 2014 | 3.4 | 3.3 | 7.3 | 7.0 | N.A. | N.A. |
The unemployment rate is expected to gradually fall as well, and the new forecasts are more optimistic than the ones released in Q1 (perhaps in light of the developments in the job market between February and April of 2011?).
The commentary on the FRB Philadelphia website:
The inflation rate experienced the sharpest revision among the economic variables considered. The Q2 forecast was raised from (and admittedly too low) 1.3% to 3.5%. Inflation is expected to cool down to 2%-2.3% over the year and a half after Q2.Growth in the U.S. economy looks a little slower now than it did three months ago, according to 44 forecasters surveyed by the Federal Reserve Bank of Philadelphia. Our panelists expect real GDP to grow at an annual rate of 3.2 percent this quarter, down from the previous estimate of 3.5 percent. On an annual-average over annual-average basis, the forecasters also predict slower real GDP growth over the next four years. The forecasters see real GDP growing 2.7 percent in 2011, down from their prediction of 3.2 percent in the last survey. The forecasters predict real GDP will grow 3.0 percent in 2012, 2.8 percent in 2013, and 3.3 percent in 2014, each somewhat lower than their respective predictions in the last survey.
The outlook for the labor market is mixed. The forecasters see a brighter picture for the unemployment rate over the next four years. Unemployment is projected to be an annual average of 8.7 percent in 2011, 8.1 percent in 2012, 7.5 percent in 2013, and 7.0 percent in 2014. On the jobs front, the forecasters see slower growth in jobs in 2011 and 2012 than they predicted in the last survey. The forecasters see nonfarm payroll employment growing at a rate of 191,100 jobs per month this quarter and 194,500 jobs per month next quarter. The forecasters' projections for the annual-average level of nonfarm payroll employment suggest job gains at a monthly rate of 130,400 in 2011 and 194,800 in 2012, as the table below shows. (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.)
Headline CPI | Core CPI | Headline PCE | Core PCE | |||||
|---|---|---|---|---|---|---|---|---|
Previous | Current | Previous | Current | Previous | Current | Previous | Current | |
| Quarterly | ||||||||
| 2011:Q2 | 1.3 | 3.5 | 1.2 | 1.7 | 1.3 | 2.7 | 1.3 | 1.5 |
| 2011:Q3 | 1.8 | 2.2 | 1.3 | 1.6 | 1.5 | 2.2 | 1.3 | 1.4 |
| 2011:Q4 | 1.8 | 2.0 | 1.4 | 1.6 | 1.5 | 1.8 | 1.4 | 1.5 |
| 2012:Q1 | 2.0 | 2.3 | 1.6 | 1.9 | 1.8 | 1.7 | 1.5 | 1.6 |
| 2012:Q2 | N.A. | 2.1 | N.A. | 1.9 | N.A. | 1.8 | N.A. | 1.6 |
| Q4/Q4 Annual Averages | ||||||||
| 2011 | 1.7 | 3.1 | 1.3 | 1.6 | 1.6 | 2.6 | 1.3 | 1.5 |
| 2012 | 2.0 | 2.2 | 1.7 | 1.9 | 1.8 | 1.9 | 1.6 | 1.6 |
| 2013 | 2.1 | 2.3 | 1.9 | 2.0 | 1.9 | 2.1 | 1.7 | 1.8 |
| Long-Term Annual Averages | ||||||||
| 2011-2015 | 2.10 | 2.35 | N.A. | N.A. | 1.91 | 2.20 | N.A. | N.A. |
| 2011-2020 | 2.30 | 2.40 | N.A. | N.A. | 2.10 | 2.27 | N.A. | N.A. |
Long-term (10-year) inflation expectations are a tad higher now, but still below 2.5%.
The commentary on the FRB Philadelphia website:
The results are roughly in line with the Wall Street Journal's May survey of forecasters.The forecasters predict higher inflation, both in the short run and over the long run, for the survey's four measures of inflation. The forecasters expect current-quarter headline CPI inflation to average 3.5 percent, up from the last survey's estimate of 1.3 percent. The forecasters predict a higher current-quarter headline PCE inflation of 2.7 percent, up from the last survey's estimate of 1.3 percent.
Measured on a fourth-quarter over fourth-quarter basis, headline CPI inflation is expected to average 3.1 percent in 2011, 2.2 percent in 2012, and 2.3 percent in 2013, higher than the forecasts of 1.7 percent, 2.0 percent, and 2.1 percent, respectively, in the last survey.
Over the next 10 years, 2011 to 2020, the forecasters expect headline CPI inflation to average 2.4 percent at an annual rate. This estimate is up slightly from 2.3 percent in the last survey.
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