The January Wall Street Journal Economic Forecast Survey was published on January 15, 2015. The headline is “WSJ Survey: Economists See 2015 GDP Growth at 3%.”
I found numerous items to be notable – although I don’t necessarily agree with them – both within the article and in the “Economist Q&A” section.
The roster of 66 economists—not all of whom answered every question—is on average slightly more upbeat about the 2015 economy. Inflation-adjusted gross domestic product is forecast to grow 3% across the four quarters of 2015, better than the 2.6% rate estimated for 2014. Wages are expected to pick up as the labor market tightens.
Cheaper oil also means that inflation—as measured by the consumer-price index—will turn into deflation temporarily, many economists say. The average of the forecasts sees the CPI up only 0.5% in the 12 months ended in June, and one-quarter of respondents expects the percentage change to be negative, with the headline CPI declining as much as 1%.
Deflation will be short-lived, however, as oil prices head north and other prices in the core index—which excludes food and energy—continue to increase, said Tom Porcelli of RBC Capital Markets.
As seen in the “Recession Probability” section, the average response as to the odds of another recession starting within the next 12 months was 11.54%; December’s average response was 11.45%.
The current average forecasts among economists polled include the following:
full-year 2014: 2.6%
full-year 2015: 3.0%
full-year 2016: 2.8%
full-year 2017: 2.7%
December 2015: 5.2%
December 2016: 4.9%
December 2017: 4.8%
10-Year Treasury Yield:
December 2015: 2.87%
December 2016: 3.55%
December 2017: 4.00%
December 2015: 1.6%
December 2016: 2.3%
December 2017: 2.3%
Crude Oil ($ per bbl):
for 12/31/2015: $63.03
(note: I highlight this WSJ Economic Forecast survey each month; commentary on past surveys can be found under the “Economic Forecasts” category)
I post various economic forecasts because I believe they should be carefully monitored. However, as those familiar with this blog are aware, I do not necessarily agree with many of the consensus estimates and much of the commentary in these forecast surveys.
The Special Note summarizes my overall thoughts about our economic situation
SPX at 1992.67 as this post is written