A New Survey Of Economists Shows How Dramatically Expectations Collapsed In Just 3 Months

The Philadelphia Fed is out with its quarterly survey of 48 professional economic forecasters. In line with the overall trend of data, their assessment was downbeat. 

Median forecasts for Q3 GDP were revised downward from 2.5 per cent to 1.6 per cent. Median Q4 projections were revised from 2.6 per cent to 2.2 per cent

Perhaps reflecting increased pessimism about the fiscal cliff, the median projection for GDP in Q1 of 2013 declined from 2.6 per cent to 1.8 per cent.

The unemployment rate is expected to drop very slowly, barely breaking 8 per cent in 2013. The median forecast was 8.1 per cent for 2012 and 7.9 per cent for 2013. 

This chart of the distribution of opinions gives an idea of the decline in projections and the confidence in predictions for GDP growth in 2012:

GDP Projections

Photo: Philadelphia Fed

And the unemployment rate:

Unemployment

Photo: Philadelphia Fed

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