In a study issued on Monday by the National Association of Business Economics(NABE), analysts forecast that the U.S. economy will see weaker growth and greater inflation by year’s end.
The median expectation for the inflation-adjusted gross domestic product (GDP) for the fourth quarter of this year is a 1.8% growth over the same time in 2021, compared to a median forecast of 2.9% in February, according to the study.
A Survey Predicts Less GDP And Greater Inflation In The US
NABE Outlook Survey Chair Yelena Shulyatyeva, a senior U.S. economist at Bloomberg Economics, stated the following:”Seventy-seven percent of the panelists indicate the risks to U.S. economic growth are tilted to the downside this year, with monetary policy missteps representing the greatest downside risk,”
The reduced growth prediction is a result of greater geopolitical unpredictability, rising inflation in the country, and an increasingly unpredictable worldwide market. The study performed by the NABE between May 2 and May 10 reveals the consensus macroeconomic prediction of 53 expert forecasters.
NABE panelists have increased their estimates for both the consumer price index (CPI) and the personal consumption expenditures (PCE) price index, which is the Fed’s favored inflation gauge.
According to the study, the CPI is expected to increase by 5.6% year-over-year in the fourth quarter of this year, which is two percentage points more than the median projection of 3.6% from the February survey. In the meanwhile, over 90 percent of panelists expect the core PCE inflation rate to peak by the end of this year.
53 percent of respondents give a likelihood of more than 25 percent that a recession would occur in the United States during the next 12 months, and an additional 40 percent of the panel indicate the probability is between 11 percent and 25 percent, according to the study.
A little more than a quarter of panelists predict a recession will occur in the second half of the following year, while 25 percent say it will come either before the end of this year or in the first half of the following year. According to the study, one-third of panelists believe a recession will not emerge until 2024 or later.