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

div classBodysc17zpet90 cdBBJodivpReuters – 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.p

pReal 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.pdivdivdiv classBodysc17zpet90 cdBBJodiv

pThe Philadelphia Feds latest snapshot of the views of 34 leading economic forecasters also revealed they project currentquarter 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. p

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

pDespite the weakening outlook for economic growth as the Fed battles 40yearhigh inflation, the forecasters expect only a small bump in unemployment.p

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