Economists rein in growth forecasts: survey

NEW YORK Fri Aug 10, 2012 10:16am EDT

Crews load and unload consumer products at the Port of New Orleans along the Mississippi River in New Orleans, Louisiana June 23, 2010. REUTERS/Sean Gardner

Crews load and unload consumer products at the Port of New Orleans along the Mississippi River in New Orleans, Louisiana June 23, 2010.

Credit: Reuters/Sean Gardner

NEW YORK (Reuters) - Forecasters dialed back their expectations for economic growth as the unemployment rate was seen remaining high for the rest of the year, a survey released on Friday showed.

The Philadelphia Federal Reserve's third-quarter survey of 48 forecasters showed economists expect gross domestic product to grow at an annual rate of 1.6 percent this quarter, down from May's estimate of 2.5 percent.

Expectations for the year were also trimmed, with the economy seen growing at a 2.2 percent pace in 2012, down from the previous 2.3 percent.

Analysts also raised the odds that the economy could contract in any of the next four quarters. For the third-quarter, the odds were lifted to 13.8 percent from May's 12.2 percent.

The labor market was seen faring worse. The jobless rate is expected to average 8.2 percent this year, before dropping to 7.9 percent in 2013.

Nonfarm payrolls were seen growing at a rate of 125,000 jobs a month in the third quarter, down from the 170,000 economists predicted in the previous survey.

Inflation expectations also cooled. Consumer prices in the third quarter were seen averaging 1.5 percent, down from earlier estimates of 2.3 percent. But core inflation, which strips out volatile items such as food and gasoline, was expected to average 2.2 percent, up from the previous 2.0 percent estimate.

(Reporting by Leah Schnurr; Editing by Padraic Cassidy)

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California state worker Albert Jagow (L) goes over his retirement options with Calpers Retirement Program Specialist JeanAnn Kirkpatrick at the Calpers regional office in Sacramento, California October 21, 2009. Calpers, the largest U.S. public pension fund, manages retirement benefits for more than 1.6 million people, with assets comparable in value to the entire GDP of Israel. The Calpers investment portfolio had a historic drop in value, going from a peak of $250 billion in the fall of 2007 to $167 billion in March 2009, a loss of about a third during that period. It is now around $200 billion. REUTERS/Max Whittaker   (UNITED STATES) - RTXPWOZ

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