Economists trimmed their forecasts for U.S. economic growth in the fourth quarter but slightly raised their expectations for the balance of 2014 on an improved outlook for the labor market.
Analysts see the economy growing at an annual rate of 2.7 percent in the current quarter, according to the Philadelphia Federal Reserve's quarterly survey of 42 forecasters.
In last quarter's survey, growth for this quarter was forecast at 3.1 percent.
First-quarter 2015 growth was forecast at 2.8 percent, down from the estimate of 3.1 percent in August's survey, though full-year growth for 2014 was forecast at 2.2 percent, up from the previous estimate of 2.1 percent.
The annual data for 2014 was the only time period for which growth expectations improved.
The pace of hiring was expected to accelerate in the current quarter compared with previous expectations, with an average rate of monthly nonfarm job growth seen around 221,600 versus a previous forecast of 211,200. That acceleration is expected to stall in the first quarter of 2015, where job growth is expected to average 211,200, though that is up from a prior forecast of 208,300.
Hiring should average 206,400 a month for all of 2014, compared with the prior full-year forecast of 204,800.
The jobless rate was expected to be 5.9 percent at the end of the current quarter and 5.8 percent by the end of the first quarter of 2015. The August survey had forecast a rate of 6 percent by the end of the current quarter.
The most recent official unemployment rate released by the government showed the jobless rate in November stood at 5.8 percent, a six-year low.
Inflation is expected to stay low, with year-on-year core consumer price inflation, which strips out food and energy costs, averaging 1.7 percent in the fourth quarter, down from the previous estimate of 2.1 percent. First-quarter core CPI was seen at 1.9 percent, down from the previous estimate of 2.1 percent.
Looking at the inflation measure most closely tracked by the U.S. Federal Reserve, the core personal consumption expenditures, or PCE, index, forecasters also see muted price pressures. The fourth-quarter rate was seen at 1.6 percent, down from 1.9 percent in the August survey.
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