CHICAGO (Reuters) - Economic growth will pick up the pace next year, but inflation will tick up only slightly despite unprecedented stimulus from the central bank, according to a survey conducted by the Chicago Federal Reserve Bank published on Monday.
Unemployment - which registered 7.9 percent in October - was seen falling only slightly, to 7.6 percent by the end of next year, respondents to Chicago Fed’s survey said. The U.S. economy will grow about 2.3 percent next year, up from an estimated 1.7 percent this year.
Inflation, as measured by the consumer price index, will register 2.1 percent, just a touch above this year’s estimated 2 percent, they said.
The Fed in September launched a third round of quantitative easing, buying $40 billion in mortgage-backed securities each month and vowing to keep on buying or even ramp up purchases unless the outlook for the labor market improves substantially. Chicago Fed President Charles Evans has said he believes it unlikely the labor market will improve enough in the first half of next year for the Fed to stop or taper the purchases.
The survey was conducted on Friday at the regional Fed bank’s yearly economic outlook symposium. It included responses from 39 participants, including manufacturers, bankers, automakers, scholars and consultants, the Chicago Fed said in a statement.
Housing and the auto sector are seen as key drivers for next year’s growth, the survey showed.
Editing by Chizu Nomiyama