Nearly two-thirds of business economists believe the US economy is already in a recession or likely to fall into one within the next 12 months, according to October survey results published Monday.
Of the 55 economists surveyed by the National Association of Business Economics (NABE), 53% responded they saw a “more-than-even likelihood” of a recession in the next year. Meanwhile, 11% of respondents said the recession was already underway.
”Profit margins have contracted, on balance, with more respondents reporting falling rather than rising profit margins for the first time since mid-2020,” said NABE business conditions survey chair Jan Hogrefe, who also serves as chief economist at Boeing Commercial Airplanes.
“Cost challenges, in particular through the wage channel, remain as well,” added Hogrefe.
President Biden said a recession is unlikely.Bloomberg via Getty Images
The shares of economists who reported an increase of sales in the third quarter was just 8 percentage points higher than those who reported a loss, according to the NABE findings. That was the lowest differential since the early days of the COVID-19 pandemic caused an economic standstill in mid-2020.
The survey also signaled the effects of inflation on US consumers, as 52% of respondents said their firms increased prices during the third quarter. The share of companies raising prices increased 9% compared to July.
Meanwhile, a record-high share of panelists reported shortages of key materials and unskilled labor. A further 22% expect labor shortages will persist into the second half of next year.
The NABE survey was conducted from Oct. 3 to Oct. 10 and tracked business conditions at economists’ companies as well as third-quarter results and near-term outlooks.
Top policymakers, including Treasury Secretary Janet Yellen and Federal Reserve Chairman Jerome Powell, have continued to insist that the US economy has not yet fallen into recession. That’s despite two straight quarters in which US GDP declined – the widely held definition of a recession.
Earlier this month, President Biden admitted a recession was “possible” but reiterated he viewed a downturn as unlikely.
“I don’t think there will be a recession. If it is, it will be a very slight recession. That is, we’ll move down slightly,” Biden said during an interview with CNN.
Still, the Fed’s ongoing slate of sharp interest rate hikes has rattled the market and stoked fears that a “hard landing” is inevitable. As The Post reported, recent modeling conducted by Bloomberg Economics put the probability of a recession at 100%.
US officials will get their next look at the economy’s health when the third-quarter GDP report is released on Thursday. Economists expect GDP to return to slight growth, according to Dow Jones data.
Source link: https://nypost.com/2022/10/24/most-economists-say-us-already-in-recession-or-could-be-soon-survey/