The August Wall Street Journal Economic Forecast Survey was published on August 13, 2015. The headline is “WSJ Survey: Economists Cite Budget Battle as a Top Threat.”
I found numerous items to be notable – although I don’t necessarily agree with them – both within the article and in the “Economist Q&A” section.
Throughout the recovery, economists have repeatedly trimmed their forecasts for growth. They now expect 2.2% growth over the course of 2015, according to the survey’s average. That’s unchanged from last month but down from an estimate of 2.9% a year ago. Their average forecast calls for unemployment to continue to fall, reaching 5.1% at the end of this year and 4.8% at the end of 2016. That’s also unchanged from recent months.
Economists broadly agree the U.S. isn’t on the precipice of crisis. They estimate the risk of a recession in the next 12 months as only about 10%. While fretting about the coming fiscal debate, economists assign less than a 2% chance to the U.S. actually defaulting on its debt because lawmakers have repeatedly walked up to the brink only to pull back again.
As seen in the “Recession Probability” section, the average response as to the odds of another recession starting within the next 12 months was 9.84%; the average response in July was 10.02%.
The current average forecasts among economists polled include the following:
full-year 2015: 2.2%
full-year 2016: 2.7%
full-year 2017: 2.5%
December 2015: 5.1%
December 2016: 4.8%
December 2017: 4.7%
10-Year Treasury Yield:
December 2015: 2.66%
December 2016: 3.27%
December 2017: 3.67%
December 2015: 1.1%
December 2016: 2.2%
December 2017: 2.4%
Crude Oil ($ per bbl):
for 12/31/2015: $50.76
for 12/31/2016: $59.64
(note: I highlight this WSJ Economic Forecast survey each month; commentary on past surveys can be found under the “Economic Forecasts” category)
I post various economic forecasts because I believe they should be carefully monitored. However, as those familiar with this blog are aware, I do not necessarily agree with many of the consensus estimates and much of the commentary in these forecast surveys.
The Special Note summarizes my overall thoughts about our economic situation
SPX at 2089.68 as post is written