The August 2020 Wall Street Journal Economic Forecast Survey

The August 2020 Wall Street Journal Economic Forecast Survey was published on August 13, 2020. The headline is “WSJ Survey: Benefits of Extra Unemployment Aid Outweigh Work Disincentive.”

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:

Economists surveyed this month saw the economy rebounding 18.3% on an annualized basis in the third quarter, following the 32.9% drop in the second quarter. That was higher than their July forecast of a 15.2% third-quarter bounceback. But economists trimmed their forecasts for the following four quarters, suggesting they see a long recovery ahead.

Roughly 70% percent of economists surveyed said the recovery would look like a “Nike swoosh,” characterized by a sharp drop, followed by a gradual recovery.

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 37.04%. The individual estimates, of those who responded, ranged from 0% to 100%.  For reference, the average response in July’s survey was 54.41%.

As stated in the article, the survey’s 62 respondents were academic, financial and business economists.  Not every economist answered every question.

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Economic Forecasts

The current average forecasts among economists polled include the following:

GDP:

full-year 2020:  -5.33%

full-year 2021:  4.39%

full-year 2022:  3.37%

Unemployment Rate:

December 2020: 8.96%

December 2021: 6.63%

December 2022: 5.47%

December 2023: 4.88%

10-Year Treasury Yield:

December 2020: .76%

December 2021: 1.17%

December 2022: 1.58%

CPI:

December 2020:  .72%

December 2021:  2.03%

December 2022:  2.08%

Crude Oil  ($ per bbl):

for 12/31/2020: $42.96

for 12/31/2021: $47.80

for 12/31/2022: $51.32

(note: I highlight this WSJ Economic Forecast survey each month; 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 3373.43 as this post is written