Tag Archives: Economic Forecasts

June 2018 Duke/CFO Global Business Outlook Survey – Notable Excerpts

On June 13, 2018 the June 2018 Duke/CFO Global Business Outlook was released.  It contains a variety of statistics regarding how CFOs view business and economic conditions.

In this CFO survey press release, I found the following to be the most notable excerpts – although I don’t necessarily agree with them:

The Optimism Index in the U.S. remained at an all-time high of 71 on a 100-point scale this quarter. Optimism fell in Africa, Asia, Europe, and Latin America. The survey’s CFO Optimism Index is an accurate predictor of future hiring and overall GDP growth.

“This increased U.S. optimism appears to have increased expectations for M&A activity,” Graham said. “More than 70 percent of CFOs expect more mergers and acquisitions to occur over the next year.”

also:

The proportion of firms indicating they are having difficulty hiring and retaining qualified employees remains near a two-decade high, with 41 percent of CFOs calling it a top concern. The typical U.S. firm says it plans to increase employment by a median 3 percent in 2018 and expects wages to increase 4 percent on average.

“The tight labor market continues to put upward pressure on wages,” said Chris Schmidt, senior editor at CFO Research. “Wage inflation is now a top five concern of U.S. CFOs.”

Wage growth should be strongest in the tech, transportation, and service/consulting industries. U.S. companies expect the prices of their products to increase by more than 3 percent over the next year.

The CFO survey contains two Optimism Index charts, with the bottom chart showing U.S. Optimism (with regard to the economy) at 71, as seen below:

Duke CFO Optimism chart

It should be interesting to see how well the CFOs predict business and economic conditions going forward.   I discussed past various aspects of this, and the importance of these predictions, in the July 9, 2010 post titled “The Business Environment”.

(past posts on CEO and CFO surveys can be found under the “CFO and CEO Confidence” tag)

_____

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 2775.63 as this post is written

The June 2018 Wall Street Journal Economic Forecast Survey

The June 2018 Wall Street Journal Economic Forecast Survey was published on June 7, 2018.  The headline is “Most Forecasters See Modest Growth Boost From Bank-Regulation Rollback.”

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.

An excerpt:

Among dozens of forecasters surveyed in recent days by The Wall Street Journal, 61% said they expected U.S. growth in the medium term would be modestly stronger thanks to the bill signed last month by President Donald Trump. Some 33% said they expected no effect on economic growth from the rules-rollback. Few expected a decline or significant increase.

As seen in the “Recession Probability” section, the average response as to the odds of another recession starting within the next 12 months was 15.83%. The individual estimates, of those who responded, ranged from 0% to 33%.  For reference, the average response in May’s survey was 14.59%.

As stated in the article, the survey’s respondents were 56 academic, financial and business economists.  Not every economist answered every question.  The survey was conducted June 1 – June 5, 2018.

The current average forecasts among economists polled include the following:

GDP:

full-year 2018:  2.9%

full-year 2019:  2.4%

full-year 2020:  1.9%

Unemployment Rate:

December 2018: 3.6%

December 2019: 3.6%

December 2020: 3.9%

10-Year Treasury Yield:

December 2018: 3.23%

December 2019: 3.59%

December 2020: 3.54%

CPI:

December 2018:  2.5%

December 2019:  2.3%

December 2020:  2.2%

Crude Oil  ($ per bbl):

for 12/31/2018: $67.16

for 12/31/2019: $66.62

for 12/31/2020: $63.05

(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 2769.09 as this post is written

Philadelphia Fed – 2nd Quarter 2018 Survey Of Professional Forecasters

The Philadelphia Fed 2nd Quarter 2018 Survey of Professional Forecasters was released on May 11, 2018.  This survey is somewhat unique in various regards, such as it incorporates a longer time frame for various measures.

The survey shows, among many measures, the following median expectations:

Real GDP: (annual average level)

full-year 2018:  2.8%

full-year 2019:  2.7%

full-year 2020:  1.9%

full-year 2021:  2.0%

Unemployment Rate: (annual average level)

for 2018: 3.9%

for 2019: 3.7%

for 2020: 3.9%

for 2021: 4.0%

Regarding the risk of a negative quarter in real GDP in any of the next few quarters, mean estimates are 5.3%, 8.6%, 11.1%, 14.4% and 15.6% for each of the quarters from Q2 2018 through Q2 2019, respectively.

As well, there are also a variety of time frames shown (present quarter through the year 2027) with the median expected inflation (annualized) of each.  Inflation is measured in Headline and Core CPI and Headline and Core PCE.  Over all time frames expectations are shown to be in the 1.9% to 2.5% range.

_____

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 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 2726.31 as this post is written

The May 2018 Wall Street Journal Economic Forecast Survey

The May 2018 Wall Street Journal Economic Forecast Survey was published on May 10, 2018.  The headline is “Economists Think the Next U.S. Recession Could Begin in 2020.”

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.

An excerpt:

The economic expansion that began in mid-2009 and already ranks as the second-longest in American history most likely will end in 2020 as the Federal Reserve raises interest rates to cool off an overheating economy, according to forecasters surveyed by The Wall Street Journal.

Some 59% of private-sector economists surveyed in recent days said the expansion was most likely to end in 2020. An additional 22% selected 2021, and smaller camps predicted the next recession would arrive next year, in 2022 or at some unspecified later date.

As seen in the “Recession Probability” section, the average response as to the odds of another recession starting within the next 12 months was 14.59%. The individual estimates, of those who responded, ranged from 0% to 32%.  For reference, the average response in April’s survey was 15.33%.

As stated in the article, the survey’s respondents were 60 academic, financial and business economists.  Not every economist answered every question.  The survey was conducted May 4 – May 8, 2018.

The current average forecasts among economists polled include the following:

GDP:

full-year 2018:  2.9%

full-year 2019:  2.4%

full-year 2020:  1.9%

Unemployment Rate:

December 2018: 3.7%

December 2019: 3.6%

December 2020: 3.9%

10-Year Treasury Yield:

December 2018: 3.24%

December 2019: 3.54%

December 2020: 3.59%

CPI:

December 2018:  2.4%

December 2019:  2.3%

December 2020:  2.3%

Crude Oil  ($ per bbl):

for 12/31/2018: $66.80

for 12/31/2019: $65.07

for 12/31/2020: $63.42

(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 2723.07 as this post is written

The April 2018 Wall Street Journal Economic Forecast Survey

The April 2018 Wall Street Journal Economic Forecast Survey was published on April 12, 2018.  The headline is “Powerful Forces Seen Restraining U.S. Pay Growth.”

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.

An excerpt:

A majority of the 60 economists surveyed this month by the Journal said three factors are meaningfully holding down readings on wage growth: low productivity growth, demographic changes, and foreign competition and globalization. Other possible explanations, such as hidden slack in the labor market or government regulation, were cited by fewer than half of forecasters.

As seen in the “Recession Probability” section, the average response as to the odds of another recession starting within the next 12 months was 15.33%. The individual estimates, of those who responded, ranged from 0% to 35%.  For reference, the average response in March’s survey was 13.66%.

As stated in the article, the survey’s respondents were 60 academic, financial and business economists.  Not every economist answered every question.  The survey was conducted April 6 – April 10, 2018.

The current average forecasts among economists polled include the following:

GDP:

full-year 2018:  2.8%

full-year 2019:  2.5%

full-year 2020:  2.0%

Unemployment Rate:

December 2018: 3.8%

December 2019: 3.6%

December 2020: 3.9%

10-Year Treasury Yield:

December 2018: 3.18%

December 2019: 3.49%

December 2020: 3.62%

CPI:

December 2018:  2.3%

December 2019:  2.3%

December 2020:  2.3%

Crude Oil  ($ per bbl):

for 12/31/2018: $62.06

for 12/31/2019: $61.20

for 12/31/2020: $61.54

(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 2663.99 as this post is written

CEO Confidence Surveys 1Q 2018 – Notable Excerpts

On April 5, 2018, The Conference Board released the 1st Quarter Measure Of CEO Confidence.   The overall measure of CEO Confidence was at 65, up from 63 in the fourth quarter. [note:  a reading of more than 50 points reflects more positive than negative responses]

Notable excerpts from this April 5 Press Release include:

CEOs’ assessment of current economic conditions was slightly more positive, with 75 percent saying conditions are better compared to six months ago, up from 71 percent in the fourth quarter of last year. CEOs were also moderately more optimistic in their appraisal of current conditions in their own industries. Now, 51 percent say conditions in their own industries have improved, up from 49 percent last quarter.

Looking ahead, CEOs’ expectations regarding the short-term outlook was significantly better. Now, 63 percent expect economic conditions to improve over the next six months, compared to just 47 percent last quarter. CEOs, however, were only slightly more upbeat about short-term prospects in their own industries over the next six months, with 43 percent anticipating conditions will improve, versus 41 percent last quarter.

The Business Roundtable last month also released its CEO Economic Outlook Survey for the 1st Quarter of 2018.   Notable excerpts from the March 13, 2018 release, titled “Business Roundtable CEO Economic Outlook Index Reaches Highest Level in Survey’s 15-Year History“:

The Business Roundtable Q1 2018 CEO Economic Outlook Index – a composite of CEO projections for sales and plans for capital spending and hiring over the next six months – increased to 118.6 in the first quarter of 2018, the highest level since the survey began in the fourth quarter of 2002. The survey was conducted between February 7 and February 26, 2018. Results reflect renewed CEO optimism and confidence following passage of the Tax Cuts and Jobs Act, but do not capture effects of President Trump’s March 8, 2018, announcement of steel and aluminum tariffs.

The Q1 2018 Index exceeded its previous high point of 113 in 2011. The Index has significantly surpassed its historical average level of 81.2.

All three components of the Index reached record highs, signaling a positive direction for the U.S economy.

  • CEO plans for hiring rose to 98.5, up 22.8 from the previous quarter.
  • Plans for capital investment rose to 115.4, up 22.7 from Q4 2017.
  • Expectations for sales reached 141.9, an increase of 19.9 from the last quarter.

In their second estimate for GDP in 2018, CEOs project 2.8 percent GDP growth for the year, compared to the previous quarter’s estimate of 2.5 percent for the year.

Additional details can be seen in the sources mentioned above.

_____

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 2662.84 as this post is written

The March 2018 Wall Street Journal Economic Forecast Survey

The March 2018 Wall Street Journal Economic Forecast Survey was published on March 15, 2018.  The headline is “WSJ Survey:  Economists See Steeper Fed Rate Path, Stronger Inflation.”

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.

An excerpt:

The economy grew 2.5% in the fourth quarter from a year earlier, well above the postrecession annual average of 1.9%.

Economists in the latest survey saw annual inflation rising to 2.1% in the fourth quarter of 2018 and remaining relatively stable thereafter.

As seen in the “Recession Probability” section, the average response as to the odds of another recession starting within the next 12 months was 13.66%. The individual estimates, of those who responded, ranged from 0% to 35%.  For reference, the average response in February’s survey was 13.97%.

As stated in the article, the survey’s respondents were 59 academic, financial and business economists.  Not every economist answered every question.  The survey was conducted March 9 – March 13, 2018.

The current average forecasts among economists polled include the following:

GDP:

full-year 2018:  2.9%

full-year 2019:  2.4%

full-year 2020:  1.9%

Unemployment Rate:

December 2018: 3.7%

December 2019: 3.7%

December 2020: 4.0%

10-Year Treasury Yield:

December 2018: 3.23%

December 2019: 3.47%

December 2020: 3.58%

CPI:

December 2018:  2.3%

December 2019:  2.3%

December 2020:  2.3%

Crude Oil  ($ per bbl):

for 12/31/2018: $60.98

for 12/31/2019: $59.56

for 12/31/2020: $59.25

(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 2746.74 as this post is written

March 2018 Duke/CFO Global Business Outlook Survey – Notable Excerpts

On March 7, 2018 the March 2018 Duke/CFO Global Business Outlook was released.  It contains a variety of statistics regarding how CFOs view business and economic conditions.

In this CFO survey, I found the following to be the most notable excerpts – although I don’t necessarily agree with them:

Forty-four percent of U.S. companies plan to increase wages more than they would have without tax reform. Thirty-eight percent plan to increase employment and 36 percent will increase domestic investment. Thirty-one percent will increase cash holdings. Among companies with defined benefit pensions, 28 percent will increase pension contributions.

also:

Due to tax reform, the effective (or average) tax rate for U.S. companies is expected to fall by about 5 percent, from 24 percent to 18.8 percent.

also:

The Optimism Index in the U.S. increased to 71 on a 100-point scale this quarter, an all-time high.

“The extremely high level of business optimism is tied to the recently passed corporate tax reform,” Graham said. “Our analysis of past results shows the CFO Optimism Index is an accurate predictor of future economic growth and hiring, therefore 2018 looks to be a very promising year.”

Optimism is up around the world, anticipating strong global economic conditions.

also:

The proportion of firms indicating they are having difficulty hiring and retaining qualified employees remains at a two-decade high, with 45 percent of CFOs calling it a top concern, up from 43 percent last quarter. The median U.S. firm says it plans to increase employment by a median 3 percent in 2018.

“The tight labor market continues to put upward pressure on wages,” said Chris Schmidt, senior editor at CFO Research. “Wage inflation is now listed near the top half dozen concerns of U.S. CFOs.”

The CFO survey contains two Optimism Index charts, with the bottom chart showing U.S. Optimism (with regard to the economy) at 71, as seen below:

Duke CFO Survey Optimism chart

It should be interesting to see how well the CFOs predict business and economic conditions going forward.   I discussed past various aspects of this, and the importance of these predictions, in the July 9, 2010 post titled “The Business Environment”.

(past posts on CEO and CFO surveys can be found under the “CFO and CEO Confidence” tag)

_____

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 2735.50 as this post is written

Philadelphia Fed – 1st Quarter 2018 Survey Of Professional Forecasters

The Philadelphia Fed 1st Quarter 2018 Survey of Professional Forecasters was released on February 9, 2018.  This survey is somewhat unique in various regards, such as it incorporates a longer time frame for various measures.

The survey shows, among many measures, the following median expectations:

Real GDP: (annual average level)

full-year 2018:  2.8%

full-year 2019:  2.5%

full-year 2020:  2.0%

full-year 2021:  1.7%

Unemployment Rate: (annual average level)

for 2018: 4.0%

for 2019: 3.8%

for 2020: 3.9%

for 2021: 4.0%

Regarding the risk of a negative quarter in real GDP in any of the next few quarters, mean estimates are 5.8%, 9.1%, 11.4%, 13.6% and 16.8% for each of the quarters from Q1 2018 through Q1 2019, respectively.

As well, there are also a variety of time frames shown (present quarter through the year 2027) with the median expected inflation (annualized) of each.  Inflation is measured in Headline and Core CPI and Headline and Core PCE.  Over all time frames expectations are shown to be in the 1.7% to 2.7% range.

_____

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 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 2552.37 as this post is written

The February 2018 Wall Street Journal Economic Forecast Survey

The February 2018 Wall Street Journal Economic Forecast Survey was published on February 8, 2018.  The headline is “Economists Stick With Optimistic U.S. Outlook Despite Market Turmoil.”

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.

An excerpt:

Forecasters see the U.S. economy gathering steam this year and the Federal Reserve raising short-term interest rates three or perhaps four times by the end of 2018.

Economists surveyed in recent days by The Wall Street Journal on average predicted U.S. gross domestic product would rise 2.8% in 2018, accelerating from 2.5% growth in the fourth quarter of 2017 versus a year earlier, supported by the recent package of tax-code changes.

As seen in the “Recession Probability” section, the average response as to the odds of another recession starting within the next 12 months was 13.97%. The individual estimates, of those who responded, ranged from 0% to 35%.  For reference, the average response in January’s survey was 13.11%.

As stated in the article, the survey’s respondents were 63 academic, financial and business economists.  Not every economist answered every question.  The survey was conducted February 2 – February 6, 2018.

The current average forecasts among economists polled include the following:

GDP:

full-year 2018:  2.8%

full-year 2019:  2.3%

full-year 2020:  2.0%

Unemployment Rate:

December 2018: 3.8%

December 2019: 3.8%

December 2020: 4.1%

10-Year Treasury Yield:

December 2018: 3.13%

December 2019: 3.46%

December 2020: 3.54%

CPI:

December 2018:  2.2%

December 2019:  2.3%

December 2020:  2.3%

Crude Oil  ($ per bbl):

for 12/31/2018: $61.00

for 12/31/2019: $60.19

for 12/31/2020: $59.39

(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 2626.82 as this post is written