Recession Dead Ahead, Economists Believe
Nearly half of economists surveyed by the National Association for Business Economics say that the U.S. is facing a recession in the near future, and a smaller number say that the economy is already in a recession, as defined by the NABE.
The organization's semiannual survey on the state of the economy of nearly 200 of its members, which was conducted in early August, found that 47% believe that a recession will begin either this year or by the first quarter of 2023. Twenty-six percent think that the recession won't come until the second quarter of next year or later.
On the other hand, nearly one-fifth of the respondents, 19%, said they believe the economy is already in a recession.
The NABE defines a recession as a significant decline in economic activity that is spread across the economy and lasts more than a few months. Though unofficial, the organization's conclusions about recessions are widely reported.
“Overall, [respondents] are not confident that the Federal Reserve will be able to bring inflation down to its 2% goal within the next two years without triggering a recession," NABE Policy Survey Chair Juhi Dhawan said in a statement.
About half of the respondents — about the same as for the last survey in March — said that current fiscal policy is "too stimulative," while 44% said current fiscal policy is “about right.” A large majority of the respondents, about 76%, support the Inflation Reduction Act, while only 14% oppose the provision.
As for monetary policy, 46% of panelists said it is “just right,” up from 22% in March, before the Federal Reserve approved four consecutive interest rate hikes. Forty-four percent of the respondents still view monetary policy as too stimulative, however.