Magazine article Mortgage Banking

Forecasters Expect Lower Growth, Higher Inflation in near Term

Magazine article Mortgage Banking

Forecasters Expect Lower Growth, Higher Inflation in near Term

Article excerpt

Expect to see lower economic growth and higher inflation in the short term, following a downward revision in growth rate of the nation's gross domestic product (GDP), according to a survey of 31 forecasters surveyed by the Federal Reserve Bank of Philadelphia.

The Philadelphia Fed's quarterly forecast predicted third-quarter growth in real GDP at an annual rate of 2.7 percent, down from 3.1 percent in the second quarter. Growth in the fourth quarter will average 2.9 percent, down just a bit from the forecasters' previous estimate of 3 percent.

"Our panelists project growth on an annual-average-over-annual-average basis of 3.4 percent this year, unchanged from their previous estimate, and 2.8 percent in 2007, down from their previous estimate of 3 percent," noted the survey.

A slightly weaker near-term outlook for the labor market accompanies the outlook for slower growth. On the jobs front, the forecasters see non-farm payroll employment expanding at a rate of 125,000 jobs per month in the third quarter, down from 166,000 in the last survey. …

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