Economists: Probability of Recession Increasing

Economists surveyed by the Wall Street Journal (WSJ) put the probability of the economy being in recession sometime in the next 12 months at 44%, up from 28% in April and 18% in January. WSJ notes: “Since the Journal began asking the question in mid-2005, a 44% recession probability is seldom seen outside of an actual recession. In December 2007, the month that the 2007-to-2009 recession began, economists assigned a 38% probability. In February 2020, when the last recession began, they assigned a 26% probability.” The latest survey’s results showed a marked increase in economists’ forecast for inflation, which they see ending the year at 7%, up from 5.5% in the April survey. On average, economists forecast unemployment will rise from 3.6% in May to an average of 3.7% at the end of 2022 and 4.2% at the end of 2023. On average, they see inflation-adjusted GDP rising 1.3% in the fourth quarter of this year, down from 2.6% in the April survey.