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Economists cut growth forecast

August 12 2008

Economists projected only 1.2% growth in U.S. real gross domestic product in the third quarter, down from an estimate of 1.7% made three months ago, according to the latest Survey of Professional Forecasters released today by the Federal Reserve Bank of Philadelphia.

In the fourth quarter, economists expect GDP growth of 0.7%, down from an earlier estimate of 1.8%.

Forecast GDP growth was also cut for the first half of 2009. Economists now expect first-quarter 2009 GDP growth of 1.6%, down from an earlier estimate of 2.3%. And second-quarter 2009 GDP growth of 2.1% was estimated down from an earlier estimate of 2.5%.

Economists forecast unemployment will rise to 6.0% by next year.

They also expect the U.S. to lose 46,500 jobs a month in the third quarter and 45,400 in the fourth quarter. The U.S. is expected to start gaining jobs again in the second quarter of 2009.

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