Forecasters See Stronger Growth in 2011 and 2012

Econintersect:  The outlook for growth in the U.S. economy looks more positive now than it did just three months ago, according to 43 forecasters surveyed by the Federal Reserve Bank of Philadelphia.

The panel expects real GDP to grow at an annual rate of 3.6 percent this quarter, up from the previous estimate of 2.4 percent. On an annual-average over annual-average basis, the forecasters predict faster real GDP growth in 2011 and 2012.  The forecasters see real GDP growing 3.2 percent in 2011, up from their prediction of 2.5 percent in the last survey. The forecasters predict real GDP will grow 3.1 percent in 2012, higher than their prediction of 2.9 percent in the last survey. For 2013, the forecast for real GDP growth is unchanged from the last survey at 3.0 percent.

Unemployment is projected to be an annual average of 9.1 percent in 2011, 8.5 percent in 2012, and 7.8 percent in 2013. These estimates are lower than the projections in the last survey. On the employment front, the forecasters have revised upward the growth in jobs over the next four quarters. The forecasters see nonfarm payroll employment growing at a rate of 129,100 jobs per month this quarter and 188,300 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 134,900 in 2011 and 226,100 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.)

Forecasters see little chance of inflation now and into the future.

source: Philly Fed