Economists at NABE still expect a recession this year. The question is when


The US economy is confusing: The number of jobs is growing. Inflation has come down, but still running relatively hot. gas prices even on the rebound. Consumers keep spendingand them trust grows. But holiday sales were cool. Corporate layoffs even installation. Company Earnings are not stellar. And mortgage rates even higher.

At the time when economic data is delivered mixed messages or completely deceived expectationsEconomists’ forecasts for the coming year are becoming increasingly vague.

The National Business Economics Association’s latest survey, released Monday, shows “significant discrepancies” among respondents about where they think the US economy will head in 2023, the organization’s president said.

“Estimates of gross domestic product or inflation-adjusted real GDP, inflation, labor market performance and interest rates are widely circulated, likely reflecting differing opinions about the fate of the economy, from recession to soft landing to sustainable growth. This is stated in a statement by NABE President Giulia Coronado.

Almost 60% of survey respondents said they believe the US has more than a 50% chance of entering a recession in the next 12 months.

Another question is when such a recession will begin: 28% named the first quarter, 33% – the second, 21% – the third.

Like the Federal Reserve fighting high inflation continues to look large, economists expect core inflation to slow this year, reaching around 2.7% to 3% in 2023 and closer to the 2% target by 2024.

However, creating some uncertainty among economists is what the Fed can do at this time, as well as the potential impact of external factors.

“Participants are divided on how much the Federal Reserve can raise interest rates, how long they can stay at their peak, when cuts will begin, and what will signal central bank action on each of these fronts,” Dana M. Peterson. , chairman of the NABE Outlook Survey and chief economist of the Conference Board, the report said. “Respondents are also very concerned, but divided over the implications of other issues that could affect the US economy, including the impact of China’s reopening on global inflation and a looming debt ceiling.”

From a labor market point of view, that stays strong and tightExperts’ median forecasts for monthly wage growth this year were 102,000, a significant upward revision from December’s forecasts of 76,000 jobs per month.

NABE economists said they expect unemployment to rise, but most doubt it will exceed 5%.

On the front of the casethey expect housing prices And Construction of a new house this year will continue to fall, predicting that the number of new residential buildings could be the largest since 2009.

But they don’t expect the recession to turn into a “recession.” Just 2% of respondents said the “housing market crash” was the biggest downside risk to the US economy in 2023.

Instead, 51% of respondents said the biggest downside risk too much monetary tightening. In second place was the expansion war in Ukrainefrom 12%.

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