Forecasters expect real GDP to slow despite uptick in NY manufacturing index
Data from the October Empire State manufacturing index, which covers New York state, show a strong month-over-month growth in real gross domestic product "suggesting continued improvement ahead." The Empire State manufacturing index jumped to 15.73 in October from 4.14 in September because of a jump in new orders and a strong employment index reading throughout the state. Although things are looking up in New York, forecasters nationwide appear less optimistic about the future of the economy than they were three months ago in a fourth quarter forward-looking survey compiled by the Federal Reserve Bank of Philadelphia. The Philly Fed's Survey of Professional Forecasters is a quarterly survey of economic forecasters nationwide. The survey began in 1968 and is the oldest survey of macroeconomic forecasts in the United States. The panel of 43 forecasters surveyed by the Philly Fed for the fourth quarter estimated that real GDP will grow at a rate of 2.2% in the fourth quarter, down from a 2.8% estimate made at the beginning of the third quarter. This brings the 2010 annual rate estimate to 2.7%, down from a prediction of 2.9% made in the previous survey. Although prospects for the fourth quarter appear dim to the forecasters, they predicted that real GDP will steadily grow throughout 2011. In the first quarter, surveyed experts anticipate a 2.4% annual grow rate, followed by 2.7% in the second quarter and 3.3% in the third quarter. Comparatively, the forecasters anticipated a 2.3% growth rate in 1Q11, a 3.1% growth rate in 2Q11 and a 3% growth rate in 3Q11. They expect real GDP will grow at a 2.9% annual rate in the fourth quarter of 2011 and made no previous predictions last time the survey was given. Regardless of the growth rate, the U.S. will remain in one the slowest recoveries compared to other nations. The Federal Reserve Bank of Dallas released a report last week that said emerging economies such as China and India are growing exponentially faster than advanced economies such as the U.S. and Japan. Write to Christine Ricciardi.