Economists see softer growth, slow jobs rebound

Reuters

WASHINGTON (Reuters) - Economists have become less optimistic about the U.S. growth outlook but slightly more upbeat about the job market, though employment is still seen recovering only slowly from a deep slump.

The Philadelphia Federal Reserve's second-quarter survey of forecasters showed a median growth forecast of 3.2 percent for the current quarter, down from estimates for a 3.5 percent increase in the poll taken in the first quarter.

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The U.S. unemployment rate is now forecast at 8.9 percent for the second quarter, down from the previous forecast of 9.2 percent, according to the survey.

Inflation estimates spiked sharply higher, in line with the recent jump in energy and commodity costs, though with limited spillover to underlying price pressures that Federal Reserve officials tend to focus on, the survey showed.

Analysts expect consumer prices outside food and energy to rise 1.7 percent, up considerably from the 1.2 percent level seen in the first-quarter survey but still within the central bank's comfort range.

(Reporting by Chizu Nomiyama and Pedro da Costa; Editing by Padraic Cassidy)