Economists’ Recession Smoke & Mirrors

Wonder what economists are smoking as they debate when a recession might happen when economy already contracted in first 2 quarters? Is a revised 63% “chance” of the “R” by next year half a toke, better than none?

Reality in economic forecasting counts, no? Maybe not so much when political narratives can affect either their reputations or employment prospects. As they might say, “Stoke the party line or stake out the unemployment line.” And yet, there’s the WSJ’s latest survey of economists saying “on average” there’s now a 63% chance of a recession in the next 12 months, up from 49% in a July survey. They now predict GDP will contract at a 0.2% annual rate in the first quarter of 2023 and shrink another 0.1% in the second quarter, while earlier in the year they thought 2023 was going to rebound in the black territory.

Needless to say, MSM interviews with individual economists often mirror their party affiliation more than they’d like to admit. And, even the increasingly pessimistic “average” or consensus still does not paint a dire scenario for the struggling economy. But, it would be nice if the economic experts could predict the future for us better than a stock broker.

Davd Soul