Updated January 22nd, 2024 at 11:07 IST
US economy: 91% of experts say recession unlikely in near future
91% economists optimistic about the US economy, a significant jump from 79% in October, as concerns of a recession dwindle.
- 2 min read
Recession odds decline: The likelihood of the US economy entering a recession in the next 12 months has diminished, as indicated by a growing majority of economists surveyed by the National Association of Business Economics (NABE). The most recent NABE survey, released on Monday, revealed that 91 per cent of respondents assigned a probability of 50 per cent or less to a recession in the coming year. This marks an increase from 79 per cent in the October survey. Contrary to a year ago, when many economists anticipated a recession amid Federal Reserve interest rate hikes to combat inflation, the current sentiment is more optimistic.
The positive outlook aligns with recent economic indicators, such as a consumer sentiment measure reaching a 2 1/2-year high and a faster-than-expected decline in inflation. Although the labour market is cooling, it is not experiencing a collapse. Federal Reserve policymakers, maintaining the policy rate between 5.25 per cent and 5.5 per cent since July, have signalled potential rate cuts this year if inflation continues to decrease.
Anticipated economic improvements
NABE's survey of economists anticipates an increase in corporate sales and profit margins in the coming year. Supply chain issues and labour shortages are reportedly easing, providing a positive outlook for inflation. The latest survey shows 63 per cent of respondents reporting no shortages of input materials, up from 46 per cent three months prior, and over half reporting no labour shortages, up from 38 per cent in the previous report, both indicating improved conditions since the onset of the pandemic.
According to the survey of 57 NABE members conducted between December 28 and January 9, the primary risks to broadly healthy business conditions in the new year include higher interest rates, heightened geopolitical instability, and increased costs. On the upside, economists highlighted lower interest rates, reduced costs, and improved labour availability as potential positive factors in the economic outlook.
(With Reuters Inputs)
Published January 22nd, 2024 at 11:07 IST