Economists Are Cutting Back Their Recession Expectations
Forecasters still expect GDP to eventually contract, but later, and by less, than previously
By Harriet Torry and Anthony DeBarros, The Wall Street Journal, July 15, 2023
Economists are dialing back recession risks.
Easing inflation, a still-strong labor market and economic resilience led 69 business and academic economists polled by The Wall Street Journal to lower the probability of a recession in the next 12 months to 54% from 61% in the prior two surveys…
Nearly 60% of economists said their main reason for optimism about the economic outlook is their expectation that inflation will continue to slow…Still, stronger-than-expected economic growth this year will also likely result in the Fed keeping interest rates higher for longer…
Economists are pushing back their estimates for when the Fed will eventually start cutting rates. In the latest survey, only 10.6% of economists expected a rate cut in the second half of this year… [end quote]
The change since the last survey was more toward the soft landing scenario.
Wendy