A recent economic outlook survey predicts slower growth in the U.S. until 2024.
The latest Outlook Survey by the National Association for Business Economics (NABE) forecasts a climate of persistent inflation and higher interest rates through 2023, as well as further banking turmoil and the possibility of a recession in 2024.
The NABE Outlook Survey was conducted by a panel of 45 professional forecasters between May 2 and May 9, 2023. The survey results reflect the consensus macroeconomic forecast of economists from businesses, trade associations, and academia.
“Respondents to the latest NABE Outlook Survey are divided as to whether a recession in the U.S. is likely in the next year,” said Julia Coronado, NABE president as well as founder and president of MacroPolicy Perspectives LLC. “However, the median forecast calls for economic growth through 2024 to be modest.”
In general, the panel anticipates that the Fed will need to maintain a benchmark interest rate greater than 5% for the remainder of the year to successfully get inflation back down to the 2% target.
The panel’s median full-year forecast for inflation was 4.2% in May, up from the 3.9% forecast in February and more than double the Fed’s 2% target. Meanwhile, until economic conditions in the U.S. have become sufficiently restrictive, the panel expects job growth to slow and the unemployment rate to rise.
Regarding the looming debt crisis and further turmoil in the banking sector, most panelists view the situation with a lens of optimism, according to Dana Peterson, chair of the NABE Outlook Survey and chief economist at The Conference Board.
“Most respondents indicate the banking crisis is contained but ongoing, with only about one-fifth believing it will worsen,” Peterson said in the survey summary.
In addition, Peterson hypothesized that most panelists believe breaching the debt ceiling will not bring on a global financial crisis unless an impasse persists for several weeks and that most respondents believe the dollar will not lose its status as a reserve currency in the foreseeable future.