US economic outlook is weakening, inflation is expected to continue

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US economic outlook is weakening, inflation is expected to continue

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

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.

Story Highlights

  • 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.

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