The September 2016 Wall Street Journal Economic Forecast Survey was published on September 8, 2016. The headline is “Why So Few Economists Are Prepared to Say Recession Risks Are Fading.”
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.
Kevin Hassett and Joseph Sullivan recently documented that the U.S. enters recessions about twice as frequently in the year after a presidential election compared with all other years. Five of the last 11 recessions landed in that window. The National Bureau of Economic Research has estimated recession dates back to 1854. In that period, 41% of recessions have fallen in the time window that only comprises 25% of months (the year after an election, of course, comes every fourth year).
As seen in the “Recession Probability” section, the average response as to the odds of another recession starting within the next 12 months was 20.25%. The individual estimates, of those who responded, ranged from 1% to 50%. For reference, the average response in August’s survey was 20.95%.
The current average forecasts among economists polled include the following:
full-year 2016: 1.8%
full-year 2017: 2.2%
full-year 2018: 2.0%
December 2016: 4.7%
December 2017: 4.5%
December 2018: 4.5%
10-Year Treasury Yield:
December 2016: 1.75%
December 2017: 2.29%
December 2018: 2.70%
December 2016: 1.6%
December 2017: 2.2%
December 2018: 2.2%
Crude Oil ($ per bbl):
for 12/31/2016: $47.02
for 12/31/2017: $53.29
for 12/31/2018: $56.78
(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 2181.91 as post is written