WASHINGTON (Reuters) - Economists in a survey see the unemployment rate falling much faster this year than previously expected, an improvement in the jobs market that could help President Obama’s re-election chances.
A survey of 45 forecasters released on Friday by the Philadelphia Federal Reserve projected the unemployment rate averaging 8.1 percent during the year’s fourth quarter. Voting for president will be November 6.
In the Philadelphia Fed’s previous poll released in November 2011, forecasters saw unemployment averaging 8.7 percent in the last three months of this year.
The forecasters slightly lowered their outlook for economic growth.
The new survey showed gross domestic product was expected to grow at an average annual rate of 2.3 percent in 2012, down from a 2.4 percent estimate in the fourth-quarter survey. Economists have cautioned that a big push by companies to restock their shelves at the end of 2011 would not carry over into this year, dulling the growth outlook.
Views about the labor market, however, appeared to reflect a sharp drop in the unemployment rate in recent months.
The jobless rate was 8.3 percent in January, down from 8.7 percent in November.
But even with the improved outlook, the job market would still be limping badly the rest of the year, underscoring the challenges to Obama’s re-election bid.
The unemployment rate was 5.0 percent when the United States slipped into recession in December 2007.
The Philadelphia Fed’s survey also showed monthly gains in non-farm payroll growth are expected to average 144,000 this year. That is an improvement from the previous survey but is not far from the numbers of new workers added every month due to population growth.
Forecasts for GDP growth in 2013 were unchanged in the first-quarter poll at 2.7 percent.
For the current quarter, economists lowered their growth outlook to 2.2 percent from 2.4 percent.
Economists also raised their expectations for inflation this year, seeing the Consumer Price Index up 2.1 percent in the fourth quarter from a year earlier. Previously, they expected that reading would be 2.0 percent.
Reporting by Jason Lange; Editing by Kenneth Barry