Philly Fed Survey Forecast Turns Gloomy

"The outlook for growth in the U.S. economy looks weaker now than it did just three months ago, according to 36 forecasters surveyed by the Federal Reserve Bank of Philadelphia. The forecasters see real GDP growing at an annual rate of 2.3 percent this quarter, down from the previous estimate of 3.3 percent. On an annual-average over annual-average basis, the forecasters expect slower real GDP growth in 2010, 2011, and 2013.The forecasters see real GDP growing 2.9 percent in 2010, down from their prediction of 3.3 percent in the last survey."
The downward revision to growth is accompanied by weaker conditions in the labor market. Unemployment is now projected to be an annual average of 9.6 percent in 2010, before falling to 9.2 percent in 2011, 8.2 percent in 2012, and 7.3 percent in 2013. These estimates are higher than the projections in the last survey. On the jobs front, the forecasters have revised downward the growth in jobs over the next four quarters. The forecasters see nonfarm payroll employment growing at a rate of 8,000 jobs per month this quarter and 114,100 jobs per month next quarter. The forecasters’ projections for the annual average level of nonfarm payroll employment suggest job losses at a monthly rate of 45,200 in 2010. Job gains in 2011 are seen averaging 143,800 per month, 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.)