The January 2012 Wall Street Journal Economic Forecast Survey

The January Wall Street Journal Economic Forecast Survey was published on January 13, 2012.  The headline is “Economists Split Over Additional Fed Action.”

The commentary largely focuses on when, and if, the Federal Reserve will do another round of “bond purchases.”

An excerpt from the article:

Of the 22 economists who expect more bond buying from the central bank, 19 forecast that it would take place before June. On average, they expect a new program would total less than $500 billion, making it the smallest one yet. The first round of bond buying, initiated by the Fed in 2008 and ended in 2010, totaled $1.25 trillion in mortgage-backed securities, $300 billion in Treasury bonds and $175 billion in federal agency debt. The second round ended in June 2011 and consisted of $600 billion in purchases of U.S. Treasurys.

Also, as seen in the Q&A section (in the spreadsheet), the economists put the probability of a U.S. recession in the next 12 months at 19%.

The current average forecasts among economists polled include the following:


full-year 2011 : 1.7%

full-year 2012:  2.4%

full-year 2013:  2.8%

full-year 2014:  3.1%

Unemployment Rate:

December 2012: 8.2%

December 2013: 7.7%

December 2014: 7.0%

10-Year Treasury Yield:

December 2012: 2.56%

December 2013: 3.21%

December 2014:  3.82%


December 2012:  2.2%

December 2013:  2.4%

December 2014:  2.6%

Crude Oil  ($ per bbl):

for 12/31/2012: $99.41

(note: I comment upon 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 1293.67 as this post is written