(NewsNation) — Economists are more optimistic about the direction of the economy than they were just a few months ago, slashing the likelihood of a recession in three recent reports.

A new survey of 69 economists by the Wall Street Journal puts the odds of a recession in the next 12 months at 54% — down from 61% in April. That’s the largest month-over-month percentage-point drop for the survey in almost three years.

Economists polled by Bloomberg have also dialed back their recession projections recently and now set the chances at 60% compared to 65% in March.

The likelihood of a US recession in the next 12 months, according to economists as of July 2023:

• Wall Street Journal survey: 54%
  • In April: 61%
• Bloomberg survey: 60%
  • In March: 65%
• Goldman Sachs: 20%
  • In March: 35%

Fannie Mae chief economist Doug Duncan told Bloomberg it’s essentially a toss-up whether the economy will suffer a recession, which is typically defined as two consecutive quarters of negative GDP growth.

Economists in both the WSJ and Bloomberg surveys expect the economy to grow slightly in the third quarter before contracting in the fourth quarter of this year — an improvement from previous forecasts that didn’t show third-quarter growth.

Most respondents in the WSJ survey pointed to slowing inflation as the main reason for optimism.

Last month, consumer prices were up 3% compared to the year before, the lowest inflation reading since March 2021. Although, that deceleration has also come at a cost. The Federal Reserve has hiked interest rates in an effort to cool demand and more increases could be coming.

Those measures have led to higher mortgage rates and Americans continue to rack up credit card debt.

But many economists expected the Fed’s actions would lead to higher levels of unemployment than the U.S. has seen in recent months. Now, it’s less certain that lowering inflation will require plunging the economy into a recession.

Goldman Sachs’ forecasters are more optimistic than other recent surveys, cutting their odds of a recession to 20% earlier this week — down from 35% back in March.

“The easing in financial conditions, the rebound in the housing market, and the ongoing boom in factory building all suggest that the U.S. economy will continue to grow, albeit at a below-trend pace,” wrote Jan Hatzius, head of Goldman Sachs Research.

The White House has been eager to highlight the improved economic outlook — which is better than many predicted at this time last year — but polling suggests voters don’t credit President Biden.

Just 38% of Americans approve of Biden’s handling of the economy compared to 58% who disapprove, according to the RealClearPolitics polling average.

Inflation remains Americans’ top concern by far, ranking ahead of crime, immigration and unemployment in a recent NewsNation poll.