Economists expect recession later than forecast: survey
Currency traders watch monitors at the foreign exchange dealing room of the KEB Hana Bank headquarters in Seoul, South Korea, Friday, Jan. 20, 2023. Asian stock markets rose Friday after Wall Street losses deepened as worries grow that the U.S. economy is headed for recession. (AP Photo/Ahn Young-joon)
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(The Hill) — Most economists in a new survey expect a recession in the U.S. this year — but a growing number predict it will come later than initially forecast.
The report from the National Association for Business Economists (NABE) found that while there are widely divergent views among economists on where the U.S. economy is headed, many still expected a recession to hit later this year.
Nearly 60% of respondents said that they thought the U.S. had a better than 50% chance to slide into a recession in the next 12 months. Of those, a plurality of 38% forecast the recession would hit in the second quarter of the year, while 28% said it would hit in the first quarter and 21% said the third quarter, according to multiple outlets.
According to Fortune, the number of forecasters who predict a recession in the first quarter has been cut in half since December.
The survey was conducted among 48 professional forecasters from Feb. 3-10.
The results showcase the varying opinions of experts, according to the group’s president.
“Estimates of inflation-adjusted gross domestic product or real GDP, inflation, labor market indicators, and interest rates are all widely diffused, likely reflecting a variety of opinions on the fate of the economy—ranging from recession to soft landing to robust growth,” NABE President Julia Coronado said in a statement.
One of factors driving the differing views of economists is the Federal Reserve’s continuing fight against inflation, which has caused the Fed to continue to raise interest rates. Economists differ on how long the Fed will continue to raise interest rates, how long they will remain at peak levels and when cuts to the interest rate may come.
“Panelists’ views are split regarding how high the Federal Reserve may raise interest rates, how long rates might stay at the peak, when cuts would begin, and what would signal the central bank’s actions on each of these fronts,” said Dana M. Peterson, NABE Outlook Survey chair. “Respondents are also highly concerned but divided in their opinions regarding the consequences of other matters that might affect the U.S. economy, including the impact of China’s reopening on global inflation and the looming debt ceiling.”
