The chart above shows that 84% of CEOs are forecasting a recession over the next 12 months, 69% of Consumers saying the same thing, with the yield curve predicting a 61% chance of a contraction.
The problem is those sets of forecasts is already 2 months old, dated October 3, 2023. It was before the very encouraging CPI, Unemployment, and GDP data releases.
I’ve spent a lot of time discussing why forecasts are a waste of time. This came up yesterday on Portfolio Rescue with Ben Carlson. We talked about how you should think about Wall Street forecasts about the economy. The TL:dr is the short term is too random, and so only serves as marketing for institutional trading firms.
Where the exception comes from are people like ISI’s Ed Hyman, who always laid out multiple possibilities — consensus and the outliers in each direction — and what the market reactions might be to that.
The entire discussion is worth watching, but the video below is teed up for the economic forecasting discussion.
Previously:
Slowing U.S. Economy, State by State (November 22, 2023)
Can Economists Predict Recessions? (September 29, 2023)
Why Recessions Matter to Investors (July 11, 2022)
Forecasting & Prediction Discussions
Source:
U.S. Economic Forecasts: What’s the Probability of a Recession in 2024?
By Dorothy Neufeld
Visual Capitalist, October 3, 2023
