Economists surveyed by the Philadelphia Federal Reserve for its biannual Livingston Survey believe the US economy will grow at a slightly faster rate than forecast in the first half of 2022. However, they cut down on their growth prediction for the second half of this year.
They now believe GDP will have increased at an annualized rate of 3.8% in the last half of this year. In the previous survey, they had forecast much faster growth of 6.7%.
On the flip side, they believe growth in the first half of 2022 will be faster than previously forecast. GDP is expected to grow at an annualized rate of 3.9% compared to the earlier forecast of 3.5%.
Economists in the survey also believe unemployment rates will be lower than first forecast for the second half of this year and the first half of 2022.
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The economists have also revised upward their year-over-year consumer price index inflation and producer price index inflation projections for 2021 and 2022. CPI inflation is projected to be 4.6% this year, an upward revision from 3.3% in the previous survey. CPI inflation is expected to average 4.5% in 2022, up from 2.5% in the previous forecast.
The PPI inflation rate for finished goods is expected to reach 8.7% this year, an upward revision from 6.0% in the previous survey. The economists project PPI inflation will average 6.3% in 2022, up from the projection of 2.8% in the previous forecast.
The Livingston Survey was started in 1946 by the late columnist Joseph Livingston and is the oldest continuous survey of economists’ expectations. It is released twice a year.