The US economic outlook has deteriorated, and inflation is projected to remain elevated than initially anticipated for a while.
- Real GDP is projected to expand at a 2.3% annual pace this quarter, down 1.9 percentage points from the last three months ago.
- The Philadelphia Fed’s latest projection of the views of 34 economic forecasters also disclosed they expect current-quarter headline CPI inflation to average 7.1%, an increase from 3.8% at the time of the last survey.
- The survey also expects headline Personal Consumer Expenditures (PCE) inflation this quarter to be 5.7% at an annual pace, up from 3.1% initially.
Despite the dim outlook for economic expansion as the Fed struggles with 40years-high inflation, the forecasters anticipate only a small jump in unemployment.
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