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Weaker U.S. growth seen than previously forecast, survey says

August 13, 2012|By Andrew Tangel
(Richard Drew / Associated…)

Forecasters see weaker U.S. growth and a softer labor market than they did three months ago, according to a survey by the Federal Reserve Bank of Philadelphia.

Gross domestic product is expected to grow at an annual rate of 1.6% this quarter, down from a previous estimate of 2.5%, according to the Philly Fed's Third Quarter Survey of Professional Forecasters.

The survey also found forecasters predict lower inflation and slightly higher unemployment this year. The unemployment rate in 2012 is expected to be 8.2% (it was 8.3% in July, according to the U.S. Labor Department.)

If the forecasters' growth predictions pan out, it could put more pressure on the Federal Reserve to inject more monetary stimulus into the economy, as stock investors have hoped.

Stocks, meanwhile, were slightly lower in early trading as weak economic data out of Japan reportedly fed into worries over slow growth.

The Dow Jones industrial average was down 15 points, or 0.1%, to 13,193 shortly after the opening bell.

The broader Standard & Poor's 500 index was down 1 point, or 0.1%, to 1,404. The Nasdaq was down 1 point, or 0.1%, to 3,019.

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