Sunday, July 13, 2025

The July 2025 Wall Street Journal Economic Forecast Survey

The July 2025 Wall Street Journal Economic Forecast Survey was published on July 12, 2025. The headline is “Economists See Lower Recession Risk and Stronger Job Growth : WSJ Survey.”

I found numerous items to be notable – although I don’t necessarily agree with them – both within the article and in the forecasts section.

An excerpt:

Although economists’ outlook improved slightly from the last survey, they still are relatively downbeat—most likely because of the persistence of trade uncertainty and muted growth to date.

On average, they expect gross domestic product adjusted for inflation to grow 1% in the fourth quarter from a year earlier. That is up from an April forecast of 0.8%, but just half of what they expected in January. They see growth rebounding to 1.9% in 2026, little changed from prior surveys.

As seen in the “Recession Probability” section, the average response as to whether the economy will be in a recession within the next 12 months was 33%. The individual estimates, of those who responded, ranged from 1% to 95%.  For reference, the average response in April’s survey [the previously published survey] was 45%.

As stated in the article, the survey’s 69 respondents were academic, financial and business economists.  The survey was conducted July 3 – July 8. Not every economist answered every question.

Economic Forecasts

The current average forecasts among economists polled include the following:

GDP:

full-year 2025:  1.03%

full-year 2026:  1.87%

full-year 2027:  2.04%

Unemployment Rate:

December 2025: 4.46%

December 2026: 4.44%

December 2027: 4.28%

10-Year Treasury Yield:

December 2025: 4.31%

December 2026: 4.20%

December 2027: 4.15%

CPI:

December 2025:  3.04%

December 2026:  2.58%

December 2027:  2.34%

Core PCE:

full-year 2025:  3.11%

full-year 2026:  2.48%

full-year 2027:  2.21%

(note: I have highlighted this WSJ Economic Forecast survey each time it is published; it was published monthly until April 2021, after which the survey is conducted (at least) every three months; commentary on past surveys can be found under the “Economic Forecasts” label)

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I post various economic forecasts because I believe they should be carefully monitored.  However, as those familiar with this site are aware, I do not necessarily agree with many of the consensus estimates and much of the commentary in these forecast surveys.

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The Special Note summarizes my overall thoughts about our economic situation

SPX at 6259.75 as this post is written

Wednesday, July 9, 2025

Charts Indicating Economic Weakness – July 2025

Throughout this site there are many discussions of economic indicators.  This post is the latest in a series of posts indicating facets of U.S. economic weakness or a notably low growth rate.

The level and trend of economic growth is especially notable at this time. As seen in various sources, recession estimates have been at elevated levels.

As seen in the April 2025 Wall Street Journal Economic Forecast Survey the consensus (average estimate) among various economists is for .78% GDP in 2025, 1.83% GDP in 2026, and 2.12% GDP in 2027.

Charts Indicating U.S. Economic Weakness

Below is a small sampling of charts that depict weak growth or contraction, and a brief comment for each:

Job Openings (JTSJOL)

Job openings (Job Openings: Total Nonfarm [JTSJOL]), although still at a high level, have recently declined significantly. This “Job Openings” measure had a value of 7,769 (Thousands) through May 2025 as of the July 1, 2025 update, as shown below:

JTSJOL

Below is this measure displayed on a “Percent Change From Year Ago” basis with value -1.7%:

JTSJOL Percent Change From Year Ago

source: U.S. Bureau of Labor Statistics, Job Openings: Total Nonfarm [JTSJOL], retrieved from FRED, Federal Reserve Bank of St. Louis; accessed July 8, 2025: https://fred.stlouisfed.org/series/JTSJOL

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Average Weekly Hours of All Employees, Total Private (AWHAETP)

Average Weekly Hours of All Employees, Total Private continues a significant downward progression. This “Average Weekly Hours” measure had a value of 34.2 (Hours) through June 2025 as of the July 3, 2025 update:

AWHAETP

Below is this measure displayed on a “Percent Change From Year Ago” basis with value -.3%:

AWHAETP Percent Change From A Year Ago

source: U.S. Bureau of Labor Statistics, Average Weekly Hours of All Employees, Total Private [AWHAETP], retrieved from FRED, Federal Reserve Bank of St. Louis; accessed July 8, 2025: https://fred.stlouisfed.org/series/AWHAETP

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All Employees, Temporary Help Services (TEMPHELPS)

I have written extensively about many facets of employment and unemployment, as the current and future unemployment issue is of tremendous importance yet is in many ways misunderstood.

One theory regarding employment is that hiring cycles typically begin with an uptake in temporary employment. Conversely, due to various factors a reduction in temporary employees can be an (early) indicator of lessening labor demand.

Shown below is this TEMPHELPS measure with last value of 2,535.9 (Thousands) through June 2025, last updated July 3, 2025:

TEMPHELPS

Below is this measure displayed on a “Percent Change From Year Ago” basis with value -3.2%:

TEMPHELPS Percent Change From Year Ago

source: U.S. Bureau of Labor Statistics, All Employees, Temporary Help Services [TEMPHELPS], retrieved from FRED, Federal Reserve Bank of St. Louis; accessed July 8, 2025: https://fred.stlouisfed.org/series/TEMPHELPS

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Motor Vehicle Retail Sales: Heavy Weight Trucks (HTRUCKSSA)

Sales of “Heavy Weight Trucks” (HTRUCKSSA) has recently been faltering. Shown below is this measure with last value of 36.270 Thousand through June 2025, last updated July 7, 2025:

HTRUCKSSA

Below is this measure displayed on a “Percent Change From Year Ago” basis with value -1.4%:

HTRUCKSSA Percent Change From Year Ago

source: U.S. Bureau of Economic Analysis, Motor Vehicle Retail Sales: Heavy Weight Trucks [HTRUCKSSA], retrieved from FRED, Federal Reserve Bank of St. Louis; accessed July 8, 2025: https://fred.stlouisfed.org/series/HTRUCKSSA

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Other Indicators

As mentioned previously, many other indicators discussed on this site indicate weak economic growth or economic contraction, if not outright (gravely) problematical economic conditions.

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The Special Note summarizes my overall thoughts about our economic situation

SPX at 6225.52 as this post is written

Tuesday, July 8, 2025

Building Financial Danger – July 8, 2025 Update

My overall analysis indicates a continuing elevated and growing level of financial danger which contains many worldwide and U.S.-specific “stresses” of a very complex nature. I have written numerous posts on this site concerning both ongoing and recent “negative developments.”  These developments, as well as other exceedingly problematical conditions, have presented a highly perilous economic environment that endangers the overall financial system.

Also of ongoing immense importance is the existence of various immensely large asset bubbles, a subject of which I have extensively written.  While all of these asset bubbles are wildly pernicious and will have profound adverse future implications, hazards presented by the bond market bubble are especially notable.

Predicting the specific timing and extent of a stock market crash is always difficult, and the immense complexity of today’s economic situation makes such a prediction even more challenging. With that being said, my analyses continue to indicate that a near-term exceedingly large (from an ultra long-term perspective) stock market crash – that would also involve (as seen in 2008) various other markets – will occur. [note: the “next crash” and its aftermath has paramount significance and implications, as discussed in the post of January 6, 2012 titled “The Next Crash And Its Significance“ and various subsequent posts in the “Economic Depression” label]

As reference, below is a daily chart since 2008 of the S&P500 (through July 7, 2025 with a last price of 6229.98), depicted on a LOG scale, indicating both the 50dma and 200dma as well as price labels:

(click on chart to enlarge image)(chart courtesy of StockCharts.com; chart creation and annotation by the author)

S&P500 since 2008

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The Special Note summarizes my overall thoughts about our economic situation

SPX at 6228.82 as this post is written

Saturday, July 5, 2025

Recession Probability Models – July 2025

There are a variety of economic models that are supposed to predict the probabilities of recession.

While I don’t agree with the methodologies employed or probabilities of impending economic weakness as depicted by the following two models, I think the results of these models should be monitored.

Please note that each of these models is updated regularly, and the results of these – as well as other recession models – can fluctuate significantly.

The first is the “Yield Curve as a Leading Indicator” from the New York Federal Reserve.  I wrote a post concerning this measure on March 1, 2010, titled “The Yield Curve as a Leading Indicator.”

Currently (last updated July 3, 2025 using data through June 2025) this “Yield Curve” model shows a 28.7153% probability of a recession in the United States twelve months ahead.  For comparison purposes, it showed a 28.301% probability through May 2025, and a chart going back to 1960 is seen at the “Probability Of U.S. Recession Predicted by Treasury Spread.” (pdf)

The second model is from Marcelle Chauvet and Jeremy Piger.  This model is described on the St. Louis Federal Reserve site (FRED) as follows:

Smoothed recession probabilities for the United States are obtained from a dynamic-factor markov-switching model applied to four monthly coincident variables: non-farm payroll employment, the index of industrial production, real personal income excluding transfer payments, and real manufacturing and trade sales. This model was originally developed in Chauvet, M., “An Economic Characterization of Business Cycle Dynamics with Factor Structure and Regime Switching,” International Economic Review, 1998, 39, 969-996. (http://faculty.ucr.edu/~chauvet/ier.pdf)

Additional details and explanations can be seen on the “U.S. Recession Probabilities” page.

This model, last updated on July 1, 2025 currently shows a 1.64% probability using data through May 2025.

Here is the FRED chart:

Smoothed U.S. Recession Probabilities

Data Source:  Piger, Jeremy Max and Chauvet, Marcelle, Smoothed U.S. Recession Probabilities [RECPROUSM156N], retrieved from FRED, Federal Reserve Bank of St. Louis, accessed July 5, 2025:  http://research.stlouisfed.org/fred2/series/RECPROUSM156N

The two models featured above can be compared against measures seen in recent posts.  For instance, as seen in the April 13, 2025 post titled “The April 2025 Wall Street Journal Economic Forecast Survey“ economists surveyed averaged a 45% probability of a U.S. recession within the next 12 months.

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The Special Note summarizes my overall thoughts about our economic situation

SPX at 6279.35 as this post is written

Thursday, July 3, 2025

Average Hourly Earnings Trends

I have written many blog posts concerning the worrisome trends in income and earnings.

Along these lines, one of the measures showing disconcerting trends is that of hourly earnings.

While the concept of hourly earnings can be defined and measured in a variety of ways, below are a few charts that I believe broadly illustrate problematic trends.

The first chart depicts Average Hourly Earnings Of All Employees: Total Private (FRED series CES0500000003)(current value = $36.30):

(click on chart to enlarge image)(chart last updated 7-3-25)

CES0500000003

Data Source: FRED, Federal Reserve Economic Data, Federal Reserve Bank of St. Louis: Average Hourly Earnings of All Employees:  Total Private [CES0500000003] ; U.S. Department of Labor: Bureau of Labor Statistics; accessed July 3, 2025: http://research.stlouisfed.org/fred2/series/CES0500000003

This next chart depicts this same measure on a “Percentage Change From A Year Ago” basis.   While not totally surprising, I find the decline from 2009 and subsequent trend to be disconcerting:

(click on chart to enlarge image)(chart last updated 7-3-25)

CES0500000003 Percent Change From Year Ago

There are slightly different measures available from a longer-term perspective. Pictured below is another measure, the Average Hourly Earnings of Production and Nonsupervisory Employees – Total Private (FRED series AHETPI)(current value = $31.24):

(click on chart to enlarge image)(chart last updated 7-3-25)

AHETPI

Data Source: FRED, Federal Reserve Economic Data, Federal Reserve Bank of St. Louis: Average Hourly Earnings of Production and Nonsupervisory Employees:  Total Private [AHETPI] ; U.S. Department of Labor: Bureau of Labor Statistics;  accessed July 3, 2025: 
http://research.stlouisfed.org/fred2/series/AHETPI

Pictured below is this AHETPI measure on a “Percentage Change From A Year Ago” basis.   While not totally surprising, I find the decline from 2009 and subsequent trend to be disconcerting:

(click on chart to enlarge image)(chart last updated 7-3-25)

AHETPI Percent Change From Year Ago

I will continue to actively monitor these trends, especially given the post-2009 dynamics.

_________

I post various economic indicators and indices because I believe they should be carefully monitored.  However, as those familiar with this site are aware, I do not necessarily agree with what they depict or imply.

_____

The Special Note summarizes my overall thoughts about our economic situation

SPX at 6279.35 as this post is written

U-3 And U-6 Unemployment Rate Long-Term Charts As Of July 3, 2025

Shortly after each monthly employment report I have been posting a continual series titled “3 Critical Unemployment Charts.”

Of course, there are many other employment charts that can be displayed as well.

For reference purposes, below are the U-3 and U-6 Unemployment Rate charts from a long-term historical perspective.  Both charts are from the St. Louis Fed site.  The U-3 measure is what is commonly referred to as the official unemployment rate; whereas the U-6 rate is officially (per Bureau of Labor Statistics) defined as:

Total unemployed, plus all persons marginally attached to the labor force, plus total employed part time for economic reasons, as a percent of the civilian labor force plus all persons marginally attached to the labor force

Of note, many economic observers use the U-6 rate as a (closer) proxy of the actual unemployment rate rather than that depicted by the U-3 measure.

Here is the U-3 chart, currently showing a 4.1% unemployment rate:

UNRATE

Data Source: FRED, Federal Reserve Economic Data, Federal Reserve Bank of St. Louis: Civilian Unemployment Rate [UNRATE] ; U.S. Department of Labor: Bureau of Labor Statistics; accessed July 3, 2025: http://research.stlouisfed.org/fred2/series/UNRATE

Here is the U-6 chart, currently showing a 7.7% unemployment rate:

U6RATE

Data Source: FRED, Federal Reserve Economic Data, Federal Reserve Bank of St. Louis: Total unemployed, plus all marginally attached workers plus total employed part time for economic reasons  [U6RATE] ; U.S. Department of Labor: Bureau of Labor Statistics; accessed July 3, 2025:  http://research.stlouisfed.org/fred2/series/U6RATE

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The Special Note summarizes my overall thoughts about our economic situation

SPX at 6271.01 as this post is written

3 Critical Unemployment Charts – July 2025

As I have commented previously, as in the October 6, 2009 post (“A Note About Unemployment Statistics”), in my opinion the official methodologies used to measure the various job loss and unemployment statistics do not provide an accurate depiction; they serve to understate the severity of unemployment.

However, even if one chooses to look at the official statistics, the following charts provide an interesting (and disconcerting) long-term perspective of certain aspects of the officially-stated unemployment (and, in the third chart, employment) situation.

The three charts below are from the St. Louis Fed site.  Here is the Median Duration of Unemployment (current value = 10.1 weeks):

(click on charts to enlarge images)(charts updated as of 7-3-25)

UEMPMED 10.1 Weeks

Data Source: FRED, Federal Reserve Economic Data, Federal Reserve Bank of St. Louis: Median Duration of Unemployment [UEMPMED] ; U.S. Department of Labor: Bureau of Labor Statistics; accessed July 3, 2025:  http://research.stlouisfed.org/fred2/series/UEMPMED

Here is the chart for Unemployed 27 Weeks and Over (current value = 1.647 million):

UEMP27OV 1647

Data Source: FRED, Federal Reserve Economic Data, Federal Reserve Bank of St. Louis: Civilians Unemployed for 27 Weeks and Over [UEMP27OV] ; U.S. Department of Labor: Bureau of Labor Statistics; accessed July 3, 2025: http://research.stlouisfed.org/fred2/series/UEMP27OV

Here is the chart for Total Nonfarm Payroll (current value = 159.724 million):

PAYEMS 159724

Data Source: FRED, Federal Reserve Economic Data, Federal Reserve Bank of St. Louis: All Employees: Total Nonfarm [PAYEMS] ; U.S. Department of Labor: Bureau of Labor Statistics; accessed July 3, 2025:  https://research.stlouisfed.org/fred2/series/PAYEMS

Our unemployment problem is severe.  The underlying dynamics of the current – and especially future – unemployment situation remain exceedingly worrisome.  These dynamics are numerous and complex, and greatly lack recognition and understanding.

My commentary regarding unemployment is generally found in the “Unemployment” label.  This commentary includes the page titled “U.S. Unemployment Trends,” which discusses various problematical issues concerning the present and future employment situation.

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The Special Note summarizes my overall thoughts about our economic situation

SPX at 6252.36 as this post is written