The latest survey of economists by The Wall Street Journal shows that as the U.S. Federal Reserve struggles to reduce stubbornly high inflation, the economy shrinks and employers respond to layoffs , the United States will fall into recession within the next 12 months.
On average, economists see a 63 percent chance of a recession in the next 12 months, up from 49 percent in the July survey. This is the first time since the last brief but sharp recession in July 2020 that the survey’s recession probability has been above 50%.
Economists are increasingly pessimistic about their forecasts for 2023. They now expect gross domestic product (GDP) to shrink in the first two quarters of next year, compared with the last quarterly survey when they expected modest growth in GDP.
Economists on average expect GDP to contract at an annualized rate of 0.2% in the first quarter of 2023 and 0.1% in the second quarter. In the July survey, they expected growth of 0.8% in the first quarter and 1% in the second.
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