The July 2023 Wall Street Journal Economic Forecast Survey

The July 2023 Wall Street Journal Economic Forecast Survey was published on July 15, 2023. The headline is “Economists Are Cutting Back Their Recession Expectations.”

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

An excerpt:

In the latest WSJ survey, economists expected gross domestic product to have grown at a 1.5% annual rate in the second quarter, a sharp uptick from 0.2% in the previous survey. They still expect GDP to eventually contract, but later, and by less, than previously. They expect the economy to grow 0.6% in the third quarter, in contrast to the 0.3% contraction expected in the prior survey, followed by a 0.1% contraction in the fourth. Forecasters said GDP would increase 1% in 2023, measured from the fourth quarter of a year earlier, double the previous forecast of 0.5%. 

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 54%. The individual estimates, of those who responded, ranged from 1% to 98%.  For reference, the average response in April’s survey [the previously published survey] was 61%.

As stated in the article, the survey’s 69 respondents were academic, financial and business economists.  The survey was conducted July 7 – July 12. 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 2023:  .97%

full-year 2024:  1.26%

full-year 2025:  2.08%

Unemployment Rate:

December 2023: 4.06%

December 2024: 4.46%

December 2025: 4.21%

10-Year Treasury Yield:

December 2023: 3.67%

December 2024: 3.40%

December 2025: 3.36%

CPI:

December 2023:  3.22%

December 2024:  2.39%

December 2025:  2.31%

Core PCE:

full-year 2023:  3.74%

full-year 2024:  2.48%

full-year 2025:  2.19%

(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)

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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 4505.72 as this post is written