The August 2020 Wall Street Journal Economic Forecast Survey was published on August 13, 2020. The headline is “WSJ Survey: Benefits of Extra Unemployment Aid Outweigh Work Disincentive.”
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.
Economists surveyed this month saw the economy rebounding 18.3% on an annualized basis in the third quarter, following the 32.9% drop in the second quarter. That was higher than their July forecast of a 15.2% third-quarter bounceback. But economists trimmed their forecasts for the following four quarters, suggesting they see a long recovery ahead.
Roughly 70% percent of economists surveyed said the recovery would look like a “Nike swoosh,” characterized by a sharp drop, followed by a gradual recovery.
As seen in the “Recession Probability” section, the average response as to whether the economy will be in a recession within the next 12 months was 37.04%. The individual estimates, of those who responded, ranged from 0% to 100%. For reference, the average response in July’s survey was 54.41%.
As stated in the article, the survey’s 62 respondents were academic, financial and business economists. Not every economist answered every question.
The current average forecasts among economists polled include the following:
full-year 2020: -5.33%
full-year 2021: 4.39%
full-year 2022: 3.37%
December 2020: 8.96%
December 2021: 6.63%
December 2022: 5.47%
December 2023: 4.88%
10-Year Treasury Yield:
December 2020: .76%
December 2021: 1.17%
December 2022: 1.58%
December 2020: .72%
December 2021: 2.03%
December 2022: 2.08%
Crude Oil ($ per bbl):
for 12/31/2020: $42.96
for 12/31/2021: $47.80
for 12/31/2022: $51.32
(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 site 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 3373.43 as this post is written