06.26.2020
The latest Livingston Survey from the Federal Reserve Bank of Philadelphia shows sharply negative growth in real GDP and high unemployment for the first half of 2020 with the economy expected to start recovering in the second half of 2020. Participants in the June Livingston Survey—surveyed by the Philadelphia Federal Reserve Bank twice a year—predict that the nation’s output (real GDP) will fall at an annual rate of -20.2 percent during the first half of 2020 with a rebound with growth increasing to 9.6 percent in the second half of 2020. Growth is predicted to average an annual rate of 7.2 percent in the first half of 2021.
Forecasters predict that the unemployment rate will be 17.4 percent in June 2020 recovering to 10.6 percent in December 2020. The unemployment rate is expected to fall further to 8.3 percent by June 2021.
Forecasters also cut their projections for inflation in 2020 and 2021. Consumer price index (CPI) inflation was revised downward to 0.8 percent in 2020 and 1.6 percent in 2021. Producer price index (PPI) inflation for finished goods is expected to be -2.1 percent this year and rise to 2.2 percent in 2021.
The survey panelists lowered their forecasts for interest rates on the three month Treasury bills—by the end of June 2020; the T-bill interest rate is predicted to be 0.13 percent. The 10-year Treasury bond interest rate is predicted to reach 0.70 percent by the end of June 2020; and the T-bond interest rate to rise to 0.81 percent at the end of December 2020.
The Philadelphia Fed’s Livingston Survey is the oldest survey of economists’ expectations. The survey was started in 1946 by the late columnist Joseph A. Livingston. It summarizes the forecast of economists from industry government banking and academia. It is published twice a year in June and December. One of the twenty forecasters in the survey is EPR’s Senior Economist Robert Chase.
For the full survey report please see pdf below.
