The United States (U.S.) economic outlook is seen as weak and inflation is expected to remain higher than previously expected for a while based on a survey conducted by the Federal Reserve Bank of Philadelphia of economists.
Real GDP is forecast to grow at an annual rate of 2.3% in the quarter, down 1.9 percentage points from the last survey three months ago, with the annual rate seen to fall to 2.3% next year and 2.0% in 2024, both lower than previous estimates.
The latest forecast released by the Philadelphia Fed is based on 34 leading economic forecasters also who think the current quarter's Consumer Price Index (CPI) inflation data will hit 7.1% on an annual basis, up from 3.8% at the time of the last survey. They also forecast Personal Consumption Expenditure (PCE) inflation in the current quarter to be 5.7% on an annual basis, up from 3.1% previously.
Despite weakening economic growth projections and the Fed facing high inflation for 40 years, economists still expect only a slight increase in unemployment.
They saw the unemployment rate at 3.6% in the quarter. That’s the same level they expected in 2022 and 2023, with it only rising to 3.8% over the next two years.
