Survey: Economists more confident in US avoiding recession
Most economists surveyed by the National Association of Business Economics predict the US economy will escape a recession in the coming year.
In the recent NABE survey released on Monday, 91% of participants indicated a 50% or lower probability of the US entering a recession in the next 12 months.
The January survey by NABE reveals a notable increase from 79% in October, signaling a shift from a year ago when economists anticipated a recession amid the Federal Reserve’s interest rate hikes to combat inflation.
The rising optimism aligns with recent economic indicators, including a consumer sentiment index reaching a 2 1/2-year high. Falling inflation and a stabilizing labor market support the positive outlook. Fed policymakers, considering rate cuts, monitor the inflation trend. Surveyed economists foresee improvements in corporate sales and profit margins, with easing supply chain and labor issues positively impacting the inflation outlook.
Notably, the survey reports decreased shortages in input materials and labor, marking some of the best readings since the pandemic began. Despite optimism, potential risks include higher interest rates, geopolitical instability, and increased costs, while lower interest rates, reduced costs, and improved labor availability are seen as positive factors.