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STRONGER GROWTH FOR THE REMAINDER OF 1993 PREDICTED; INFLATION OUTLOOK IMPROVES

 PHILADELPHIA, Nov. 29 /PRNewswire/ -- According to 34 forecasters surveyed by the Federal Reserve Bank of Philadelphia, the short-term outlook for economic growth has improved since last quarter's survey.
 The forecasters now see real GDP growing at 2.8 percent in 1993, up 0.4 percentage points from the last survey. Average growth over l994 is also expected to be 2.8 percent, unchanged from the previous survey. Stronger fourth quarter growth will not affect the unemployment rate, according to the forecasters. They see the unemployment rate continuing to average 6.9 percent in 1993 and 6.6 percent in 1994.
 The CPI inflation outlook through 1994 has improved from three months ago as well. Over the next five quarters, inflation is seen holding steady at 3.0 percent, down from 3.3 percent in the last survey. Inflation is expected to average 2.9 percent in 1993 and 3.0 percent in 1994, both down 0.2 percentage points from the last survey.
 The forecasters also see lower interest rates than those in last quarter's survey, particularly in 1994. The 10-year Treasury bond is excepted to yield 5.6 percent in the fourth quarter of this year and to increase to 5.8 percent by the end of 1994.
 The following table compares median forecasts for selected variables from the current survey with those from three months ago:
 10-year
 Real GDP CPI Inflation T-Bond Yield
 Previous New Previous New Previous New
 Quarterly data:
 1993: Q4 3.2 3.5 3.3 3.0 5.8 5.6
 1994: Q1 2.7 2.9 3.3 3.O 6.0 5.6
 Q2 2.9 2.5 3.3 3.0 6.0 5.6
 Q3 3.0 3.0 3.3 3.O 6.0 5.7
 Q4 N.A. 2.7 N.A. 3.0 N.A. 5.8
 Annual average data:
 1993 2.4 2.8 3.1 2.9 6.0 5.9
 1994 2.8 2.8 3.2 3.0 6.0 5.7
 Long-Term Inflation Outlook Unchanged
 Forecasters see the inflation rate (based on the Consumer Price Index) for the next 10 years averaging 3.45 percent, unchanged from three months ago. The middle range of the forecasts runs from 3.0 percent to 3.8 percent.
 Lower Risk of a Negative Quarter
 The mean probabilities of a decline in real GDP over the next five quarters are lower than previously forecast. The following table summarizes the results:
 Mean Probability of a Decline in Real GDP
 Third Quarter Fourth Quarter
 1993 1993
 Survey Survey
 1993: Q4 10.0 3.0
 1994: Q1 14.0 8.0
 Q2 16.0 13.0
 Q3 15.0 13.0
 Q4 N.A. 13.0
 SURVEY OF PROFESSIONAL FORECASTERS
 MAJOR MACROECONOMIC INDICATORS, 1993-94
 Forecast Annual
 1993 1994 Average
 Q4 Q1 Q2 Q3 Q4 1993 1994
 Percent Growth at
 Annual Rates
 1. Real GDP (Billions
 of 1987 Dollars) 3.5 2.9 2.5 3.0 2.7 2.8 2.8
 2. GDP Implicit Price
 Deflator
 (1987 equals 100) 2.6 2.6 2.9 3.0 2.9 2.5 2.9
 3. Gross Domestic
 Product (GDP)
 ($ Billions) 6.2 5.6 5.7 5.9 5.7 5.5 5.5
 4. Consumer Price
 Index (CPI-U)
 (Annual Rate) 3.0 3.0 3.0 3.0 3.0 2.9 3.0
 Variables in Levels
 5. Unemployment Rate
 (pct.) 6.7 6.6 6.6 6.5 6.4 6.9 6.6
 6. 3-Month Treasury
 Bill Rate (pct.) 3.1 3.1 3.2 3.4 3.5 3.0 3.3
 7. 10-Year Treasury
 Bond Yield (pct.) 5.6 5.6 5.6 5.7 5.8 5.9 5.7
 Source: Research Department, Federal Reserve Bank of Philadelphia, Survey of Professional Forecasters, Fourth Quarter 1993.
 Notes: The figures on each line are medians of 34 individual forecasts.
 NA equals Not Applicable.
 For the GDP Implicit Price Deflator and Consumer Price Index, the annual average is the percent change in the fourth quarter index level from the fourth quarter index level of the previous year.
 The Philadelphia Fed's Survey of Professional Forecasters was formerly conducted by the American Statistical Association (ASA) and the National Bureau of Economic Research (NBER) and was known as the ASA/NBER survey. The survey, which began in 1968, is conducted each quarter. The Federal Reserve Bank of Philadelphia, in cooperation with the NBER, assumed responsibility for the survey in June 1990.
 /delval/
 -0- 11/29/93
 /CONTACT: Dean Croushore, research officer and economist of the Federal Reserve Bank of Philadelphia, 215-574-3809/


CO: Federal Reserve Bank of Philadelphia ST: Pennsylvania IN: FIN SU: ECO

MJ-LJ -- PH018 -- 8314 11/29/93 12:59 EST
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Date:Nov 29, 1993
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