Los Angeles Times

Recession forecast is pushed to later in ’23

More than half of experts still expect a downturn, but fewer see it coming by end of March, survey says.


A majority of the nation’s business economists expect a U.S. recession to begin later this year than they had previously forecast, after a series of reports have pointed to a surprising­ly resilient economy despite steadily higher interest rates.

Fifty-eight percent of 48 economists who responded to a survey by the National Assn. for Business Economics envision a recession this year, the same proportion who said so in the group’s survey in December. But only a quarter think a recession will have begun by the end of March, only half the proportion who had thought so in December.

The findings, reflecting a survey of economists from businesses, trade associatio­ns and academia, were released Monday.

A third of the economists who responded to the survey now expect a recession to begin in the April-June quarter. One-fifth think it will start in the July-September quarter.

The delay in the economists’ expectatio­ns of when a downturn will begin comes after a series of government reports that have pointed to a still-robust economy even after the Federal Reserve has raised interest rates eight times in a strenuous effort to slow growth and curb high inflation.

In January, employers added more than half a million jobs, and the unemployme­nt rate reached 3.4%, the lowest level since 1969.

And sales at retail stores and restaurant­s jumped 3% in January, the sharpest monthly gain in nearly two years. That suggested that consumers, who drive most of the economy’s growth, still feel financiall­y healthy and willing to spend.

At the same time, several government reports also showed that inflation rose in January after weakening for several months, fanning fears that the Fed will raise its benchmark rate even higher than was expected. When the Fed lifts its key rate, it typically leads to more expensive mortgages, auto loans and credit card borrowing. Interest rates on business loans also rise.

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