Make Kitco Your Homepage

U.S. economic outlook weakens, inflation set to persist - Philly Fed survey

Kitco News

May 13 (Reuters) - The U.S. economic outlook has weakened and inflation is set to remain higher than previously expected for a while yet, a Federal Reserve Bank of Philadelphia survey of professional economic forecasters showed on Friday.

Real GDP is forecast to grow at a 2.3% annual rate this quarter, down 1.9 percentage points from the last survey three months ago, with the annual rate seen falling to 2.3% next year and 2.0% in 2024, both lower than the previous estimate.

The Philadelphia Fed's latest snapshot of the views of 34 leading economic forecasters also revealed they project current-quarter headline Consumer Price Index (CPI) inflation will average 7.1% at an annual rate, up from 3.8% at the time of the last survey. They also forecast headline Personal Consumption Expenditures (PCE) inflation this current quarter to be 5.7% at an annual rate, up from 3.1% previously.

Forecasts for headline and core CPI and PCE inflation in 2022 and 2023 were also revised upward.

Despite the weakening outlook for economic growth as the Fed battles 40-year-high inflation, the forecasters expect only a small bump in unemployment.

They see the unemployment rate at 3.6% this quarter. That's the same level they expect in 2022 and 2023, with it only moving up to 3.8% over the following two years.

Reporting by Lindsay Dunsmuir; Editing by Chizu Nomiyama
Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.