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.
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.