Release Date: June 4, 2014

JUNE 2014

Higher Growth, Lower Unemployment Predicted for Second Half of 2014
The 28 participants in the June Livingston Survey have raised their estimates of output growth for the second half of 2014.
The forecasters, who are surveyed by the Federal Reserve Bank of Philadelphia twice a year, project that the economys
output (real GDP) will rise at an annual rate of 1.5 percent during the first half of 2014 and 3.0 percent during the second
half of 2014, followed by growth of 2.9 percent (annual rate) in the first half of 2015. A downward revision for real GDP
growth in the first half of 2014, which is 1.0 percentage point lower than the projection in the survey of six months ago, is
accompanied by an upward revision to growth in the second half of 2014.

Projections for the unemployment rate have been revised downward throughout 2014. The forecasters predict that the
unemployment rate will be 6.3 percent in J une 2014 and 6.1 percent in December 2014. The unemployment rate is
expected to decrease further, to 5.9 percent in J une 2015. On an annual-average basis, the unemployment rate is expected
to be 6.3 percent in 2014 and 5.9 percent in 2015.


Growth Rate of
Real GDP (%) Unemployment Rate (%)
Previous New Previous New
Half-year data:
2013 Q4 to 2014 Q2 2.5 1.5 J une 2014 7.0 6.3
2014 Q2 to 2014 Q4 2.8 3.0 December 2014 6.7 6.1
2014 Q4 to 2015 Q2 N.A. 2.9 J une 2015 N.A. 5.9

Nearly Unchanged Outlook for CPI Inflation
On an annual-average over annual-average basis, CPI inflation is expected to be 1.8 percent in 2014 and 2.0 percent in
2015. The 2015 projection is only slightly lower (0.1 percentage point) than the estimate in the December survey. PPI
inflation for finished goods is expected to be 2.4 percent this year and 1.7 percent next year.

CPI Inflation (%) PPI Inflation (%)
Previous New Previous New
Annual-average data:
2013 to 2014 1.8 1.8 N.A. 2.4
2014 to 2015 2.1 2.0 N.A. 1.7



Projections for Three-Month Treasury-Bill Rates Revised Upward for December 2015 Even as Projections for Long-
Term Rates Are Revised Downward
The forecasters have raised their estimates 20 basis points for the rate on three-month Treasury bills in December 2015.
They currently peg the three-month rate at 0.95 percentage point, marking an upward revision from 0.75 percentage point
in the December survey. At the same time, the forecasters see the rate on 10-year Treasuries at levels lower than they
anticipated in December. The 10-year Treasury rate will be 3.10 percent at the end of December 2014, down from the
previous projection of 3.25 percent, and 3.75 percent in December 2015, down from the previous projection of 3.88
percent.

3-Month Treasury Bill 10-Year Treasury Note
Interest Rate Interest Rate
Previous New Previous New

J une 30, 2014 0.09 0.04 3.01 2.70
Dec. 31, 2014 0.15 0.07 3.25 3.10
J une 30, 2015 N.A. 0.20 N.A. 3.50
Dec. 31, 2015 0.75 0.95 3.88 3.75







S. Anderson Bank of the West G. Mokrzan Huntington National Bank
B. Bovino Standard & Poor's M. Moran Daiwa Capital Markets America
J. Butkiewicz University of Delaware J. Mueller LBMC, LLC
R. Chase Economic & Policy Resources, Inc. F. Nothaft Federal Home Loan Mortgage Corp.
C. Chrappa Independent Equipment Company M. Regalia U.S. Chamber of Commerce
D. Crowe National Association of Home Builders C. Rupkey Bank of Tokyo-Mitsubishi UFJ
R. Dhawan Georgia State University J. Silvia Wells Fargo Securities, LLC
D. Dinas United Mergers & Acquisitions Consultants J. Smith Parsec Financial Management, Inc.
K. Goldstein/B. Ark Conference Board S. Snaith University of Central Florida
B. Horrigan Loomis Sayles & Co. S. Stanley Pierpont Securities
S. Kahan Kahan Consulting Ltd. B. Wesbury/R. Stein First Trust Advisors, LP
D. Knop Independent Economist R. Yamarone Bloomberg, LP
T. Lam OSK-DMG
E. Leamer/D. Shulman University of California, Los Angeles
D. Maki Barclays Capital
K. Mayland Clear View Economics
2014 Livingston Survey Participants

2
Long-Term Outlook for Output Growth Falls Slightly, While the Long-Term Inflation Outlook Holds Steady
The forecasters predict that real GDP will grow 2.50 percent annually over the next 10 years, slightly lower than the
forecast of 2.60 percent in the survey of six months ago. Inflation (measured by the CPI) is expected to average 2.35
percent over the next 10 years, the same rate predicted in the December survey.


Stock-Price Projections Revised Upward
The forecasters see stock prices rising in 2014 and 2015. The projected value for the S&P 500 index is 1910.0 for the end
of J une and is expected to rise to 1950.0 by the end of 2014. These forecasts for 2014 are higher than those of the previous
survey, as shown in the table below. The index is expected to rise to 2026.5 by the end of 2015, higher than the previous
estimate of 1948.5



Stock Prices
S&P 500 Index
Previous New

J une 30, 2014 1841.1 1910.0
Dec. 31, 2014 1875.0 1950.0
J une 30, 2015 N.A. 1999.8
Dec. 31, 2015 1948.5 2026.5



Technical Notes
This news release reports the median value across the 28 forecasters on the surveys panel.

In previous Livingston surveys, our measure of the producer price index (PPI) was that for finished goods, according to
the Bureau of Labor Statistics (BLS) Stage of Processing (SOP) aggregation system. Following the recent change in the
BLSs procedures, the survey now switches to the Final Demand-Intermediate Demand (FD-ID) aggregation system for
the PPI for finished goods. As in previous surveys, we use the seasonally adjusted index level. Due to the change in the
BLSs procedures, we record the previous PPI projection (page 1) as missing.




The Philadelphia Feds Livingston Survey is the oldest continuous survey of economists expectations. The survey was
started in 1946 by the late columnist J oseph A. Livingston. It summarizes the forecasts of economists from industry,
government, banking, and academia. It is published twice a year, in J une and December.

To subscribe to the survey, go to www.philadelphiafed.org/philscriber/user/dsp_content.cfm. This four-page write-up
contains partial results of the survey; more detailed tables are available. These tables can be accessed on the Internet at
www.philadelphiafed.org/research-and-data/real-time-center/livingston-survey/.
3
LI VI NGSTON SURVEY
MAJ OR MACROECONOMI C I NDI CATORS, 2014- 2015


Q4 2013 Q2 2014 Q4 2014 2013 2014
QUARTERLY I NDI CATORS TO TO TO TO TO
( per cent age changes at annual r at es) Q2 2014 Q4 2014 Q2 2015 2014 2015

Real Gr oss Domest i c Pr oduct 1. 5 3. 0 2. 9 2. 3 3. 0

Nomi nal Gr oss Domest i c Pr oduct 3. 2 4. 7 5. 0 3. 9 4. 9

Nonr esi dent i al Fi xed I nvest ment 1. 6 5. 8 5. 7 3. 5 5. 8

Cor por at e Pr of i t s Af t er Taxes 0. 9 5. 8 4. 5 4. 0 5. 7


DEC 2013 J UN 2014 DEC 2014 2013 2014
MONTHLY I NDI CATORS TO TO TO TO TO
( per cent age changes at annual r at es) J UN 2014 DEC 2014 J UN 2015 2014 2015

I ndust r i al Pr oduct i on 3. 8 3. 4 3. 6 3. 8 3. 6

Pr oducer Pr i ces - Fi ni shed Goods 3. 4 1. 9 1. 2 2. 4 1. 7

Consumer Pr i ce I ndex ( CPI - U) 2. 1 2. 0 2. 0 1. 8 2. 0

Aver age Weekl y Ear ni ngs i n Mf g. - 2. 2 1. 7 2. 8 1. 6 2. 6

Ret ai l Tr ade 4. 7 4. 2 5. 3 3. 7 4. 8


( l evel s of var i abl es) J UN 2014 DEC 2014 J UN 2015 2014 2015

Tot al Pr i vat e Housi ng St ar t s 1. 050 1. 183 1. 311 1. 070 1. 250
( annual r at e, mi l l i ons)

Unempl oyment Rat e 6. 3 6. 1 5. 9 6. 3 5. 9
( per cent )

Aut omobi l e Sal es ( i ncl . f or ei gn) 7. 5 7. 7 7. 8 7. 5 7. 8
( annual r at e, mi l l i ons)


FI NANCI AL I NDI CATORS
( l evel s of var i abl es at end of mont h) J UN 2014 DEC 2014 J UN 2015 DEC 2015

Pr i me I nt er est Rat e 3. 25 3. 25 3. 25 3. 75

10- Year Tr easur y Not e Yi el d 2. 70 3. 10 3. 50 3. 75

3- Mont h Tr easur y Bi l l Rat e 0. 04 0. 07 0. 20 0. 95

St ock Pr i ces ( S&P500) 1910. 0 1950. 0 1999. 8 2026. 5


LONG- TERM OUTLOOK
Aver age Annual Gr owt h Rat e f or t he Next Ten Year s

Real GDP 2. 5

Consumer Pr i ce I ndex 2. 3



Sour ce: Resear ch Depar t ment , Feder al Reser ve Bank of Phi l adel phi a, Li vi ngst on Sur vey, J une 2014


4







LIVINGSTON SURVEY

June 2014

Tables






Note: Data in these tables listed as actual are the data that were available to the forecasters when they were sent the survey
questionnaire on May 19; the tables do not reflect subsequent revisions to the data. All forecasts were received on or before
May 30.
TABLE ONE
MAJ OR MACROECONOMI C I NDI CATORS, 2014- 2015
MEDI ANS OF FORECASTER PREDI CTI ONS

NUMBER
OF FORE- ACTUAL FORECASTS ACTUAL FORECASTS
QUARTERLY I NDI CATORS CASTERS 2013 Q4 2014 Q2 2014 Q4 2015 Q2 2013 2014 2015


1. Real Gr oss Domest i c Pr oduct 28 15942. 3 16065. 2 16303. 4 16540. 4 15761. 3 16117. 2 16602. 7
( bi l l i ons, chai n wei ght ed)

2. Nomi nal Gr oss Domest i c Pr oduct 28 17089. 6 17362. 4 17768. 4 18209. 2 16799. 7 17462. 0 18314. 3
( $ bi l l i ons)

3. Nonr esi dent i al Fi xed I nvest ment 26 2022. 5 2039. 0 2097. 0 2155. 4 1984. 4 2053. 8 2173. 8
( bi l l i ons, chai n wei ght ed)

4. Cor por at e Pr of i t s Af t er Taxes 17 1742. 5 1750. 0 1800. 0 1840. 0 1683. 2 1750. 0 1850. 0
( $ bi l l i ons)

ACTUAL FORECASTS ACTUAL FORECASTS
MONTHLY I NDI CATORS DEC 2013 J UN 2014 DEC 2014 J UN 2015 2013 2014 2015

5. I ndust r i al Pr oduct i on 26 101. 5 103. 4 105. 1 107. 0 99. 9 103. 7 107. 4
( 2007=100)

6. Tot al Pr i vat e Housi ng St ar t s 25 1. 034 1. 050 1. 183 1. 311 0. 930 1. 070 1. 250
( annual r at e, mi l l i ons)

7. Pr oducer Pr i ces - Fi ni shed Goods 19 198. 1 201. 4 203. 3 204. 5 196. 7 201. 4 204. 8
( i ndex l evel )

8. Consumer Pr i ce I ndex ( CPI - U) 27 234. 6 237. 0 239. 4 241. 8 233. 0 237. 3 242. 1
( i ndex l evel )

9. Unempl oyment Rat e 27 6. 7 6. 3 6. 1 5. 9 7. 4 6. 3 5. 9
( per cent )

10. Aver age Weekl y Ear ni ngs i n Mf g. 10 830. 9 821. 7 828. 8 840. 2 807. 5 820. 8 842. 0
( $)

11. Ret ai l Tr ade 16 427. 8 437. 7 446. 6 458. 4 422. 3 438. 0 459. 2
( $ bi l l i ons)

12. Aut omobi l e Sal es ( i ncl . f or ei gn) 20 7. 5 7. 5 7. 7 7. 8 7. 6 7. 5 7. 8
( annual r at e, mi l l i ons)

TABLE ONE ( CONTI NUED)

ACTUAL FORECASTS
I NTEREST RATES & STOCK PRI CES DEC 2013 J UN 2014 DEC 2014 J UN 2015 DEC 2015
( end of per i od)

13. Pr i me I nt er est Rat e 26 3. 25 3. 25 3. 25 3. 25 3. 75
( per cent )

14. 10- Year Tr easur y Not e Yi el d 27 3. 04 2. 70 3. 10 3. 50 3. 75
( per cent )

15. 3- Mont h Tr easur y Bi l l Rat e 27 0. 07 0. 04 0. 07 0. 20 0. 95
( per cent )

16. St ock Pr i ces ( S&P500) 17 1848. 4 1910. 0 1950. 0 1999. 8 2026. 5
( i ndex l evel )



Sour ce: Resear ch Depar t ment , Feder al Reser ve Bank of Phi l adel phi a, Li vi ngst on Sur vey, J une 2014

TABLE TWO
MAJ OR MACROECONOMI C I NDI CATORS, 2014- 2015
PERCENTAGE CHANGES AT ANNUAL RATES

NUMBER Q4 2013 Q2 2014 Q4 2014 2013 2014
OF FORE- TO TO TO TO TO
QUARTERLY I NDI CATORS CASTERS Q2 2014 Q4 2014 Q2 2015 2014 2015

1. Real Gr oss Domest i c Pr oduct 28 1. 5 3. 0 2. 9 2. 3 3. 0

2. Nomi nal Gr oss Domest i c Pr oduct 28 3. 2 4. 7 5. 0 3. 9 4. 9

3. Nonr esi dent i al Fi xed I nvest ment 26 1. 6 5. 8 5. 7 3. 5 5. 8

4. Cor por at e Pr of i t s Af t er Taxes 17 0. 9 5. 8 4. 5 4. 0 5. 7


DEC 2013 J UN 2014 DEC 2014 2013 2014
TO TO TO TO TO
MONTHLY I NDI CATORS J UN 2014 DEC 2014 J UN 2015 2014 2015

5. I ndust r i al Pr oduct i on 26 3. 8 3. 4 3. 6 3. 8 3. 6

6. Tot al Pr i vat e Housi ng St ar t s 25 0. 016 0. 133 0. 128 0. 140 0. 180

7. Pr oducer Pr i ces - Fi ni shed Goods 19 3. 4 1. 9 1. 2 2. 4 1. 7

8. Consumer Pr i ce I ndex ( CPI - U) 27 2. 1 2. 0 2. 0 1. 8 2. 0

9. Unempl oyment Rat e 27 - 0. 4 - 0. 2 - 0. 2 - 1. 1 - 0. 4

10. Aver age Weekl y Ear ni ngs i n Mf g. 10 - 2. 2 1. 7 2. 8 1. 6 2. 6

11. Ret ai l Tr ade 16 4. 7 4. 2 5. 3 3. 7 4. 8

12. Aut omobi l e Sal es ( i ncl . f or ei gn) 20 0. 0 0. 2 0. 1 - 0. 1 0. 3

DEC 2013 J UN 2014 DEC 2014 J UN 2015
TO TO TO TO
I NTEREST RATES & STOCK PRI CES J UN 2014 DEC 2014 J UN 2015 DEC 2015

13. Pr i me I nt er est Rat e 26 0. 00 0. 00 0. 00 0. 50

14. 10- Year Tr easur y Not e Yi el d 27 - 0. 34 0. 40 0. 40 0. 25

15. 3- Mont h Tr easur y Bi l l Rat e 27 - 0. 03 0. 03 0. 13 0. 75

16. St ock Pr i ces ( S&P500) 17 6. 8 4. 2 5. 2 2. 7



Not e: Fi gur es f or housi ng st ar t s, unempl oyment r at e, aut o sal es, pr i me i nt er est r at e, 10- year Tr easur y bond,
and 90- day Tr easur y bi l l ar e changes i n l evel s. Al l ot her s ar e per cent age changes at annual r at es.

Sour ce: Resear ch Depar t ment , Feder al Reser ve Bank of Phi l adel phi a, Li vi ngst on Sur vey, J une 2014

TABLE THREE
LONG- TERM ( 10 YEAR) FORECASTS

__________________________________

SERI ES: CPI I nf l at i on Rat e
__________________________________

STATI STI C
Mi ni mum 1. 40
Lower Quar t i l e 2. 03
Medi an 2. 35
Upper Quar t i l e 2. 57
Maxi mum 2. 80

Mean 2. 31
St d. Devi at i on 0. 34

N 28
Mi ssi ng 0

__________________________________

__________________________________

SERI ES: Real GDP
__________________________________

STATI STI C
Mi ni mum 1. 80
Lower Quar t i l e 2. 30
Medi an 2. 50
Upper Quar t i l e 2. 74
Maxi mum 3. 10

Mean 2. 50
St d. Devi at i on 0. 30

N 28
Mi ssi ng 0

__________________________________




Sour ce: Resear ch Depar t ment , Feder al Reser ve Bank of Phi l adel phi a, Li vi ngst on Sur vey, J une 2014