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[NEW YORK] Economists trimmed their forecasts for US economic growth in the fourth quarter but slightly raised their expectations for the balance of 2014 on an improved outlook for the labor market.
Analysts see the economy growing at an annual rate of 2.7 per cent in the current quarter, according to the Philadelphia Federal Reserve's quarterly survey of 42 forecasters, released on Monday. In last quarter's survey, growth for this quarter was forecast at 3.1 per cent.
First-quarter 2015 growth was forecast at 2.8 per cent, down from the estimate of 3.1 per cent in August's survey, though full-year growth for 2014 was forecast at 2.2 per cent, up from the previous estimate of 2.1 per cent.
The annual data for 2014 was the only time period for which growth expectations improved.
The pace of hiring was expected to accelerate in the current quarter compared with previous expectations, with an average rate of monthly nonfarm job growth seen around 221,600 versus a previous forecast of 211,200. That acceleration is expected to stall in the first quarter of 2015, where job growth is expected to average 211,200, though that is up from a prior forecast of 208,300.
Hiring should average 206,400 a month for all of 2014, compared with the prior full-year forecast of 204,800.
The jobless rate was expected to be 5.9 per cent at the end of the current quarter and 5.8 per cent by the end of the first quarter of 2015. The August survey had forecast a rate of 6 per cent by the end of the current quarter.
The most recent official unemployment rate released by the government showed the jobless rate in November stood at 5.8 per cent, a six-year low.
Inflation is expected to stay low, with year-on-year core consumer price inflation, which strips out food and energy costs, averaging 1.7 per cent in the fourth quarter, down from the previous estimate of 2.1 per cent. First-quarter core CPI was seen at 1.9 per cent, down from the previous estimate of 2.1 per cent.
Looking at the inflation measure most closely tracked by the US Federal Reserve, the core personal consumption expenditures, or PCE, index, forecasters also see muted price pressures. The fourth-quarter rate was seen at 1.6 per cent, down from 1.9 per cent in the August survey.