NABE Outlook Panel Predicts U.S. Economy Likely to Weather Serial Crises
The National Association for Business Economics (NABE) recently released its May 2023 Outlook Survey, presenting the consensus macroeconomic forecast of a panel of 45 professional forecasters. The survey provides valuable insights into the outlook for the U.S. economy in 2023 and 2024. Despite ongoing challenges and uncertainties, the panelists generally predict that the U.S. economy will weather the storm of serial crises. Let’s delve into the key findings of the report.
Divided Opinions on Recession:
According to NABE President Julia Coronado, the panelists hold differing views on the likelihood of a recession in the U.S. within the next year. While there is no clear consensus, the median forecast suggests that economic growth will be modest through 2024. This indicates a cautious approach to the economic outlook, with panelists expecting various factors to impact growth and stability.
Expectations for Interest Rates, Inflation, and Job Growth:
The panelists anticipate higher interest rates in 2023 compared to the previous forecast from the February 2023 Outlook Survey. However, they also predict a decline in interest rates and a slowdown in inflation for 2024. Job growth, on the other hand, is expected to moderate, and the unemployment rate is likely to rise. These projections indicate a balancing act in the coming years as the economy adjusts to evolving circumstances.
Banking Crisis and Debt Ceiling Concerns:
The survey reveals that most respondents believe the banking crisis is contained but ongoing. Only about one-fifth of the panelists expect the situation to worsen. Additionally, a majority of the forecasters do not believe that breaching the debt ceiling will lead to a global financial crisis, as long as the impasse does not persist for several weeks. These insights provide some reassurance amid concerns surrounding these critical economic issues.
De-Dollarization and Long-Term Threats:
While global economic dynamics are continually evolving, the majority of the panelists do not consider de-dollarization as a significant threat in the foreseeable future. This finding highlights the continued importance of the U.S. dollar as a global reserve currency and reflects confidence in its stability and value.
The NABE Outlook Panel’s May 2023 survey provides valuable insights into the future of the U.S. economy amidst serial crises. Although opinions differ on the possibility of a recession, the panel generally expects modest economic growth through 2024. The forecasters anticipate fluctuations in interest rates and inflation, while job growth is expected to moderate. Furthermore, the banking crisis is deemed contained but ongoing, and concerns over breaching the debt ceiling leading to a global financial crisis are relatively low. Overall, the outlook suggests that the U.S. economy has the potential to withstand these challenges and navigate through uncertain times.