Macroeconomic Forecasts Downgraded In June Survey

The consensus forecasts of the 50 major economic forecasting groups polled monthly by Blue Chip Economic Indicators fell again in the June survey. The group cut its forecast for growth of real gross domestic product in the U.S. by 0.2 point to 2.1% for this year and by 0.1 point to 2.4% for 2013.  Another month of mixed economic reports and worry about the financial consequences of the Eurozone debt crisis was behind the lower estimates. The economists are also concerned about the so-called “fiscal cliff,” the combination of expiring federal tax cuts and budget cuts. In a special question, 93% of those polled said their forecast assumed a partial or total extension of the cuts, but no one can say for certain what will occur.

The economists also downgraded their predicted growth of real personal disposable income this year by 0.2 point; the forecast growth rate for DPI is only 1.1% in ’12 and 1.8% next year. They left the forecasts for growth of real personal consumption expenditures at 2.2%. Inflation is also expected to remain moderate. The predicted rise in the consumer price index is 2.2% this year and 2.1% next year.

Consensus forecasts for real GDP growth in the United Kingdom and France were cut to 0.3% and 0.1% respectively, while that for Germany increases 0.2 point to 0.8%. The Eurozone as a whole is expected to post a 0.5% decline in real GDP this year and grow only 0.7% next year.