Philadelphia Fed: Forecasters upgrade growth, job gains and inflation in 2023 and 2024

<p>According to a survey by the Federal Reserve Bank of Philadelphia, the U.S. economic outlook has improved slightly compared to three months ago:</p><ul><li>Forecasters predict a 1.3 percent annual growth rate for this quarter, up from the previous estimate of 1.2 percent.</li><li>For 2023, they expect real GDP to increase by 2.4 percent, and by 1.7 percent in 2024, which is 0.3 and 0.4 percentage points higher than earlier estimates.</li><li>The unemployment rate is expected to rise from 3.7 percent in 2023 to 4.0 percent in 2026, with little change from the previous survey.</li><li>Job gains are projected to be higher, with monthly rates of 296,500 in 2023 and 120,000 in 2024, up from earlier estimates of 288,600 and 94,800, respectively.</li></ul><p>Forecasters anticipate changes in inflation rates as follows:</p><ul><li>The current-quarter headline CPI inflation is expected to average 3.3 percent at an annual rate, up from the previous estimate of 2.9 percent.</li><li>Headline PCE inflation for the current quarter is also projected to be slightly higher at an annual rate of 2.9 percent.</li><li>However, the predictions for current-quarter core CPI and core PCE inflation are lower compared to previous estimates.</li><li>Projections for inflation in 2024 and 2025 remain largely unchanged from previous estimates.</li></ul><p>Over the next decade (2023 to 2032):</p><ul><li>Headline CPI inflation is expected to average 2.40 percent annually, which is consistent with the previous estimate.</li><li>The corresponding estimate for 10-year annual-average PCE inflation is 2.22 percent, slightly higher than the previous survey's estimate.</li></ul>

This article was written by Greg Michalowski at www.forexlive.com.