The outlook for the US economy is now more mixed than three months ago, according to the third-quarter Survey of Professional Forecasters. The Federal Reserve Bank of Philadelphia released the report on Aug. 9.

The panel of 36 economists now predicts the economy will expand at an annual rate of 1.9% this quarter, down from 2.0% in the previous survey. However, they have revised upward their GDP growth expectations for the fourth quarter of 2024 to 1.7 % from the 1.5% predicted in the previous survey.

Forecasters also upgraded the 2025 GDP growth estimate to 2.6% in 2024, up from the 2.5% projected earlier.

Unemployment rate projections have increased across all horizons compared to the previous survey. The unemployment rate is projected to rise by 0.2 percentage point in 2024 and 2025, averaging 4.1% and 4.3% annually, respectively. Additionally, the forecasters expect the unemployment rate to average 4.2% in both 2026 and 2027 on an annual basis, each up 0.1 percentage point from the previous survey.

Employment expectations have declined slightly for the next three quarters. The panelists now project job gains at a monthly rate steadily decreasing to 116,200 in the second quarter of 2025, down from 143,900 in the current quarter. However, they expect monthly job gains to rebound to 145,800 in the third quarter of 2025. 

Overall, the survey notes that annual average projections for nonfarm payroll employment have decreased to 130,000 in 2025 from a monthly rate of 210,100 in 2024, both lower than previous forecasts.