The Philadelphia Fed today released the second quarter 2007 Survey of Professional Forecasters. Participants reduced their projections for growth this year.
Highlights include:
* Q2 GDP now seen 2.4%, down from 2.7% in previous survey
* 2007 Core PCE deflator seen at 2.1%, up from 2.0%
* 2007 Unemployment Rate now 4.6%, down from 4.7% prior
* Employment growth estimates upped for 2007, lowered for 2008
Core PCE inflation will average 2.1% on a fourth-quarter over fourth-quarter basis in each of the next three years. These projections are nearly unchanged from those of the previous survey, when the forecasters thought core PCE inflation would average 2.0 percent in 2007 and 2.1 percent in each of the following two years. Forecasters expect core CPI inflation to average 2.3% (Q4 over Q4) in each of the next three years. These projections are unchanged from those of the previous survey.
Forecasters see growth rebounding to 2.9% in 2008, nearly the same rate they expected in the last survey. The unemployment rate is expected to average 4.6% this year, down from 4.7% previously, and 4.8% next year, unchanged from the previous survey. Nonfarm payrolls are estimated to increase by an average 151k per month in 2007 and 122,000 per month in 2008. Previously, the forecasters thought nonfarm payroll employment would rise 135k per month in 2007 and 131k per month in 2008.
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