In December, we noted:
More than a third of top economic forecasters now predict a U.S. recession in 2020. Some pundits and politicians are predicting a recession as soon as 2019. A few say a recession’s not happening any time soon.
This week, it is reported by the National Association of Business Economics that three quarters of top economists predict a full-blown recession by 2021.
A snippet from their report reveals the following: “While only 10% of panelists expect a recession in 2019, 42% say a recession will happen in 2020, and 25% expect one in 2021. A majority of panelists also indicated they would be worried about a budget deficit in the U.S. that equaled up to 4% of gross domestic product (GDP). This is an outcome which will likely occur in 2019 given the deficit for fiscal year 2018 was 3.85%, and respondents expect spending policies to increase the deficit compared with the Congressional Budget Office’s current 10-year baseline estimate.”
In comparison, here’s how our poll results changed from December 2018 to March 2019:
| Weighted Average Response | |||
| Question | 12/2018 | 3/2019 | Change |
| The Fed is raising interest rates too quickly, a recession will result | 5.86 | 4.92 | -0.94 |
| The recent (late 2017) stock market turmoil is a strong indicator that investors are worried about a recession | 6.61 | 5.52 | -1.09 |
| The GDP growth in the 3rd quarter 2018 rising at an annual rate of 3.5% shows a recession is far off | 5.40 | 5.32 | -0.08 |
| With unemployment at 3.9% in October, wage growth at 3.1% over the last 12 months and the CPI rising 2.5% over the last 12 months, a recession will not occur within the next year | 6.58 | 6.52 | -0.06 |
Overall, there is a decreased expectation for a recession in the near term. Though much of this decline is centered on the impact of both the Fed raising interest rates and of the late 2018 stock market decline, respondents appear to believe that the economy’s outlook is improving. This contradicts the National Association of Business Economists report cited above.
In our March poll update, 40% of respondents believe there is not enough information available to back an opinion of whether there will be a recession or when it may occur. However, approximately 30% of the respondents predict there will be a recession in 2020 with the balance projecting a recession in 2021.
Thank you for completing the poll. We appreciate your insight.