Wall Street Journal (08/10/12) Kathleen Madigan

The outlook for the U.S. economy and labor markets is weaker this quarter than it was three months ago, according to a quarterly survey released on Aug. 10 by the Federal Reserve Bank of Philadelphia. The regional bank’s Survey of Professional Forecasters expects real gross domestic product to grow at only a 1.6% annual rate this quarter and 2.2% in the fourth quarter, down from 2.5% and 2.6% forecast three months ago. The 48 forecasters surveyed also trimmed their view for the first and second quarters of 2013, with growth of 1.8% and 2.3%, compared with earlier projections of 2.6% and 2.7%.

Lower economic activity forecasts are leading to reduced expectations for job growth. The forecasters now see payroll gains averaging 125,000 per month this quarter and 135,300 in the fourth quarter. That hiring pace is down sharply from the gains of 170,000 and 172,600 expected in the second-quarter survey.