Recession is still coming for the U.S., but at a later date, NABE says
(Kitco News) After a solid start to the year, the National Association for Business Economics (NABE) now expects a U.S. recession to start later in the year, according to the latest survey.
Markets across the board began to take a hit in February after the latest U.S. jobs report came in better than expected. The macro data kept surprising on the upside for the rest of the month, from retail sales to PMI data, economic growth, and hotter-than-expected inflation numbers.
This triggered a re-pricing, with many economists updating their economic outlooks. But the consensus is still a U.S. recession this year, just a few months later.
The National Association for Business Economics' latest survey, published Monday, confirmed this outlook. Nearly 60% of survey panelists forecasted a more than 50% chance that the U.S. will enter a recession in the next 12 months.
Opinions diverged on exactly when that recession will hit. Only 28% pointed to the first quarter, 33% expect it in the second quarter, and 21% are watching the third quarter.
"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's president Julia Coronado said in a statement.
Another big unknown is how aggressive the Federal Reserve will be to get inflation closer to its 2% target.
"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 NABE Outlook Survey chair and Conference Board chief economist Dana Peterson.
Survey participants also revised their employment projections, estimating the median monthly payroll growth to be at 102,000. This is a significant upward revision from December's total of 76,000.
At the same time, 51% of respondents indicated that too much monetary policy tightening was the most significant downside risk.