The June Wall Street Journal Economic Forecast Survey was published on June 11, 2015. The headline is “Economists See Bright Consumer Outlook.”
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.
But the forecasters think a high level of spending will be sustained this year because labor markets are strengthening. According to the average forecast, payrolls should increase at a monthly pace of 221,000 for the rest of the year, a notch above the 217,000 averaged in the first five months. The jobless rate is projected to fall to 5.1% by December from 5.5% in May.
A return of the consumer would power overall economic output. On average, the forecasters think inflation-adjusted gross domestic product is expanding at a 2.6% annual rate in the second quarter and then will grow just over 3% in the second half. The economy contracted 0.7% in the first quarter according to the most recent estimate, a drop that reflected shipping problems related to the West coast port slowdown and harsh weather.
As seen in the “Recession Probability” section, the average response as to the odds of another recession starting within the next 12 months was 10.33%; the average response in May was 11.62%.
The current average forecasts among economists polled include the following:
full-year 2015: 2.1%
full-year 2016: 2.7%
full-year 2017: 2.6%
December 2015: 5.1%
December 2016: 4.8%
December 2017: 4.8%
10-Year Treasury Yield:
December 2015: 2.63%
December 2016: 3.34%
December 2017: 3.76%
December 2015: 1.2%
December 2016: 2.3%
December 2017: 2.4%
Crude Oil ($ per bbl):
for 12/31/2015: $61.77
for 12/31/2016: $69.07
(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 2092.14 as post is written