But the range of their forecasts is wide, from a relatively small chance of a recession—usually defined as a contraction in the economy for two consecutive quarters—to more confident predictions that a downturn is imminent. In general, forecasters who say a recession will be avoided emphasize that they may be over-optimistic, while those who are confident that the economy will contract are quick to say that the recession won’t be that bad.
Here’s what some economists, analysts and strategists have been saying recently about the chances of a recession:
Daniel Bachman, who leads the US economic forecasting team at the consultancy, estimates the probability of a recession at about 15 percent, “less likely than some analysts would have you believe.”
Pantheon Macroeconomics
Ian Shepherdson, the research firm’s chief economist, says the “baseline scenario remains that a recession is unlikely”, and that if there is, it will be “short and mild”.
Morgan Stanley
Ellen Zentner, the investment bank’s chief US economist, notes that “accelerated inflation is a common precursor to recessions.” But despite high and rising inflation, the probability of a recession in the next 12 months is about 30 percent, according to the bank’s models.
Goldman Sachs
Analysts at the Wall Street giant have upped their forecasted chances of a recession, but believe it can still be avoided (via “an achievable but difficult road”). David Mericle and Ronnie Walker estimate the probability of a recession in the coming year at 30 percent, up from 15 percent earlier, and just under 50 percent in the next two years, a 35 percent increase.
JPMorgan Chase
Economists at the United States’ largest bank, led by chief economist Bruce Kasman, have raised their projected chance of a recession in the next 12 months to an “uncomfortably high” 35 percent. “The risks are firmly skewed towards the top of inflation and towards the bottom of growth,” they write.
bank of America
Ethan Harris, a global economist at the bank, expects growth to slow to near zero in the second half of next year, with a 40 percent chance of an outright recession and “only a modest recovery” in 2024.
Citigroep
Economists at Citigroup, led by Nathan Sheets, the global chief economist, estimate the probability of a global recession at 50 percent and expect the U.S. economy to slow but not contract, although “we view the likelihood of a recession as significant and increasing.” .
TD Bank
The Canadian bank’s economic team, led by chief economist Beata Caranci, does not expect a recession in the US, although “with growth close to stalling, there is a very small margin of error if another shock hits economies.”
Credit Suisse
Jeremy Schwartz, the U.S. economics director at the Swiss bank, thinks inflation “will eventually slow down,” but not enough to plunge the U.S. economy into recession. Instead, “a prolonged growth slowdown is becoming increasingly likely.”
Oxford Economics
The Federal Reserve has a “fighting chance” of curbing inflation without triggering a recession, writes Kathy Bostjancic, the group’s chief US economist. She has lowered her forecasts for growth, which will be “dangerously close to a recession by mid-2023,” she says.
Fitch Reviews
The Fitch Ratings team, led by chief economist Brian Coulton, expects economic growth to slow to just 0.1 percent per quarter in the second through fourth quarters next year, a pace the economy is “dangerously closing.” at the risk of technical recession.”
Berenberg
Analysts at the German bank, led by chief economist Holger Schmieding, expect the US economy to stagnate in late 2022 and contract in the first three quarters of 2023, but only by a “relatively modest” 0.4 percent for the year. . “With luck, the recession will be shallow,” they write.
German Bank
Months ago, economists at the German bank predicted that the US economy would enter a recession by the end of 2023, but now they expect “an earlier and slightly more severe recession,” according to the team led by Matthew Luzzetti, the bank’s chief executive. American economist. They expect the economy to shrink by 0.5 percent in 2023.
Wells Fargo
A 2023 recession “seems more likely than not,” according to a report by Jay Bryson, the bank’s chief economist. His prediction is that the economy will contract by 1 percent in two quarters next year, “one of the milder downturns in the post-World War II era,” similar to the recession of the early 1990s. For something that looks like silver lining, he writes, “Since we don’t think the downturn won’t be particularly deep, we don’t expect the job market to fall apart completely.”
