The October 2022 Wall Street Journal Economic Forecast Survey

The October 2022 Wall Street Journal Economic Forecast Survey was published on October 16, 2022. The headline is “Economists Now Expect a Recession, Job Losses by Next Year.”

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

Two excerpts:

Forecasters have ratcheted up their expectations for a recession because they increasingly doubt the Fed can keep raising rates to cool inflation without inducing higher unemployment and an economic downturn. Some 58.9% of economists said they think the Fed will raise interest rates too much and cause unnecessary economic weakness, up from 45.6% in July.

also:

Economists’ average forecasts suggest that they expect a recession to be relatively short-lived. Of the economists who see a greater than 50% chance of a recession in the next year, their average expectation for the length of a recession was eight months. The average postwar recession lasted 10.2 months.

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 63%. The individual estimates, of those who responded, ranged from 1% to 100%.  For reference, the average response in July’s survey [the previously published survey] was 49%.

As stated in the article, the survey’s 66 respondents were academic, financial and business economists.  The survey was conducted October 7 – October 11. Not every economist answered every question.

–

Economic Forecasts

The current average forecasts among economists polled include the following:

GDP:

full-year 2022:  .22%

full-year 2023:  .44%

full-year 2024:  1.82%

full-year 2025:  2.12%

Unemployment Rate:

December 2022: 3.70%

December 2023: 4.71%

December 2024: 4.64%

December 2025: 4.31%

10-Year Treasury Yield:

December 2022: 3.84%

December 2023: 3.45%

December 2024: 3.19%

December 2025: 3.20%

CPI:

December 2022:  7.18%

December 2023:  3.25%

December 2024:  2.42%

December 2025:  2.25%

Core PCE:

full-year 2022:  4.82%

full-year 2023:  3.19%

full-year 2024:  2.34%

full-year 2025:  2.13%

(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)

_____

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 3583.07as this post is written