Fed study offers discouraging economic news

The Federal Reserve banks in Philadelphia and San Francisco released discouraging economic-research results Monday.

Forty-five professional economic forecasters surveyed by the Federal Reserve Bank of Philadelphia predicted slower growth and higher unemployment next year and in 2013 than they predicted in August.

A publication by the Federal Reserve Bank of San Francisco said the economic uncertainty spurred by the European debt crisis had increased the odds to more than 50 percent that the United States would fall into recession early next year.

Locally, a European recession could hurt Delaware and New Jersey. Both are among the top 15 states ranked by exports to Europe as a percentage of state gross domestic product, Wells Fargo Securities said in a report Monday.

Europe accounts for about a third of exports from those states. Wells Fargo did not provide a comparable figure for Pennsylvania, which is significantly less dependent on exports to Europe.

A fourth piece of economic analysis, by IHS Global Insight, also showed Delaware and New Jersey in a dimmer financial light. The Lexington, Mass., economic forecasting firm predicted when states would return to peak employment levels.

Delaware won't regain the peak employment of 442,300 it achieved in December of 2006 until the second quarter of 2016, IHS predicted.

IHS said New Jersey would regain its pre-recession peak employment level in the third quarter of 2015. New Jersey's peak was 4.1 million in January 2008.

The prediction for Pennsylvania, where employment peaked at 5.83 million in April 2008, was the third quarter of 2013, IHS said.

The Philadelphia Fed's quarterly survey covers the national economy and is not predicting another recession, despite concerns about Europe. The economists predicted that the U.S. gross domestic product would grow 2.4 percent next near and and 2.7 percent in 2013, down from forecasts of 2.6 percent and 2.9 percent, respectively, in the August survey.

They also predicted that next year's average unemployment rate would be 8.8 percent, up from the August forecast of 8.6 percent.