–Forecasts Unemployment Rate To Drop to 8.5% By Q4 2011
–Sees GDP At +2.6% In 2011, +2.9% In 2012
–Forecasts Car/Light Truck Sales Of 13.2 Mln In 2011, 14.4 Mln 2012
By Brai Odion-Esene
WASHINGTON (MNI) – Participants at the Chicago Federal Reserve’s
annual Automotive Outlook Symposium expect a dip in U.S. economic
expansion this year before the pace picks up slightly in 2012, a
sentiment that does not surprise given the recent raft of
weaker-than-expected economic data.
In results released Monday, the participants at the symposium held
in Detroit June 2-3 did, however, provide a bullish outlook for car and
light truck sales. They predicted sales of 13.2 million in 2011 — vs.
11.6 million last year — and higher at 14.4 million in 2012.
Overall, according to the median forecast of symposium
participants, 2011 U.S. GDP growth is expected to be a bit slower than
in 2010, inflation is predicted to rise, and the unemployment rate is
anticipated to move lower. “The pace of economic growth in 2012 is
expected to edge higher, with inflation easing and the unemployment rate
continuing to head lower,” the Chicago Fed said.
The unemployment rate, after having averaged 9.6% in the fourth
quarter of 2010, is forecasted to fall to 8.5% in the final quarter of
2011 and then move further down to 8.2% in the last quarter of 2012.
Real GDP, after having increased 2.8% last year, is forecasted to
rise by 2.6% this year and 2.9% in 2012. After rising 1.2% last year,
inflation — in this case the Consumer Price Index — is expected to
rise 2.6% this year and ease to 2.2% in 2012.
“The pace of economic growth is forecasted to edge higher in 2012,
in large part because of an anticipated expansion in spending in
residential investment,” the Chicago Fed said.
Real residential investment is forecast to witness a major jump in
2012, up by 16.2% from +3.8% this year.
Industrial production is forecasted to increase at a strong pace of
5.4% in 2011, followed by a “solid” 4.1% growth rate in 2012. Net
exports are predicted to remain flat this year and next, at -$405.5
billion and -$400.0 billion, respectively.
And as OPEC prepares to meet Wednesday and decide whether or not to
raise production levels, the consensus among those surveyed by the
Chicago Fed is for oil prices (WTI) to average $103 per barrel by the
end of 2011 and then remain at that level through the end of 2012.
Interest rates are projected to rise this year and next year. The
10-year Treasury rate is seen at 3.70% this year and 4.20% in 2012.
** Market News International Washington Bureau: 202-371-2121 **
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