Declining inflation and a robust job market are two guiding stars indicating a healthy economy that is expected to extend through the rest of the year, according to a new National Association for Business Economics survey.
The survey additionally predicts that the country’s gross domestic product will likely increase by 2.2% in the months to come, which is a greater growth rate than the group had forecast in late 2023.
The Washington-based group, comprising the largest association of economists, strategists, and policymakers in the world, is also forecasting a 3.9% national unemployment rate for 2024, below an earlier forecast of 4.2%.
The NABE findings reveal a “sharply revised” upward forecast, said Ellen Zentner, president of the group, reflecting “upward revisions to key sectors of the economy.”
Another promising sign: the group is predicting a decline in the Consumer Price Index to 2.4%, compared to last year’s 4.1%. That number looks particularly good considering that in 2022 the CPI came in at 8%.
In its survey report, the NABE remarked: “Based on comments from Fed officials this week, we now expect the Fed to wait until June to begin cutting interest rates. “
The report continued: “Moreover, when it does begin to loosen policy, we expect that the Fed will initially adopt a gradual approach, with the intention of cutting at every other meeting.”
When and if a recession is likely to occur appears to be an elusive thing to the NABE thinkers, with 24% of the survey’s respondents saying that downturn is going on right now, and another 22% forecasting a recession for 2025.
But the largest response, at 36%, said they expected to see a recession in “2026 or later.”
Overall, the NABE experts are “more optimistic about the outlook for the domestic economy,” said Sam Khater, the group’s policy survey chairman.
But Khater, in a statement, added that those same experts “have increasing concerns on the balance of risks around monetary policy that is ‘too restrictive’ versus a fiscal policy that is ‘too stimulative.'”
By Garry Boulard
