The May 2020 Wall Street Journal Economic Forecast Survey

The May 2020 Wall Street Journal Economic Forecast Survey was published on May 13, 2020. The headline is “WSJ Survey: Coronavirus to Cause 17% Unemployment in June.”

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.

An excerpt:

A monthly Wall Street Journal survey found economists expect gross domestic product to shrink 6.6% this year, measured from the fourth quarter of 2019, a downgrade from the 4.9% contraction economists predicted in last month’s survey. While economists expect a deeper contraction in the second quarter, a majority—85%—continue to expect the recovery will start in the second half of the year. They predict an annualized growth rate of 8.5% in the third quarter, up from 6.2% in the prior survey. Growth is expected to clock in at 6.7% in the fourth quarter, broadly unchanged from last month.

As seen in the “Recession Probability” section, the average response as to the odds of another recession starting within the next 12 months was 94.6%. The individual estimates, of those who responded, ranged from 10% to 100%.  For reference, the average response in April’s survey was 96.24%.

As stated in the article, the survey’s 64 respondents were academic, financial and business economists.  Not every economist answered every question.  The survey was conducted May 8 – May 12, 2020.

–

Economic Forecasts

The current average forecasts among economists polled include the following:

GDP:

full-year 2020:  -6.64%

full-year 2021:  5.00%

full-year 2022:  2.99%

Unemployment Rate:

December 2020: 11.38%

December 2021: 7.55%

December 2022: 5.83%

December 2023: 4.91%

10-Year Treasury Yield:

December 2020: .85%

December 2021: 1.30%

December 2022: 1.73%

CPI:

December 2020:  .45%

December 2021:  1.93%

December 2022:  2.10%

Crude Oil  ($ per bbl):

for 12/31/2020: $31.72

for 12/31/2021: $40.94

for 12/31/2022: $47.76

(note: I highlight this WSJ Economic Forecast survey each month; commentary on past surveys can be found under the “Economic Forecasts” label)

_____

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.

_____

The Special Note summarizes my overall thoughts about our economic situation

SPX at 2815.74 as this post is written