Tag Archives: Economic Forecasts

The July 2017 Wall Street Journal Economic Forecast Survey

The July 2017 Wall Street Journal Economic Forecast Survey was published on July 13, 2017.  The headline is “Forecasters Lower Economic Outlook Amid Congressional Gridlock.”

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.

Two excerpts:

Forecasters in The Wall Street Journal’s monthly survey of economists marked down their outlooks for growth, inflation and interest rates this month, a partial reversal of a postelection bump.

also:

Forecasters assess whether they think the economy is more likely to outperform or underperform their forecasts. The number of economists seeing those risks to the downside climbed to 57% in this month’s survey, the highest since before the election. That’s up from 51% last month and 37% just two months ago.

As seen in the “Recession Probability” section, the average response as to the odds of another recession starting within the next 12 months was 14.78%. The individual estimates, of those who responded, ranged from 0% to 33%.  For reference, the average response in June’s survey was 15.80%.

As stated in the article, the survey’s respondents were 63 academic, financial and business economists.  Not every economist answered every question.  The survey occurred on July 7, 2017 to July 11, 2017.

The current average forecasts among economists polled include the following:

GDP:

full-year 2017:  2.3%

full-year 2018:  2.4%

full-year 2019:  1.9%

Unemployment Rate:

December 2017: 4.3%

December 2018: 4.1%

December 2019: 4.3%

10-Year Treasury Yield:

December 2017: 2.65%

December 2018: 3.12%

December 2019: 3.39%

CPI:

December 2017:  1.8%

December 2018:  2.3%

December 2019:  2.3%

Crude Oil  ($ per bbl):

for 12/31/2017: $47.45

for 12/31/2018: $51.16

for 12/31/2019: $51.99

(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 2448.24 as post is written

CEO Confidence Surveys 2Q 2017 – Notable Excerpts

On July 6, 2017, The Conference Board released the 2nd Quarter Measure Of CEO Confidence.   The overall measure of CEO Confidence was at 61, down from 68 in the first quarter. [note:  a reading of more than 50 points reflects more positive than negative responses]

Notable excerpts from this July 6 Press Release include:

CEOs’ appraisal of current economic conditions waned, with 60 percent saying conditions were better compared to six months ago, down from 71 percent in the first quarter. Business leaders were also less positive in their appraisal of current conditions in their own industries. Now, just 47 percent say conditions in their own industries have improved, down from 60 percent last quarter.

Looking ahead, CEOs’ optimism regarding the short-term outlook for the economy moderated due to a greater percentage expressing a “more of the same” sentiment as opposed to foreseeing conditions worsening. Currently, 41 percent expect economic conditions to improve over the next six months, compared to approximately 65 percent last quarter. The outlook for their own industries was also less favorable, with 48 percent of CEOs anticipating an improvement over the next six months, down from 67 percent in the first quarter of this year.

The Business Roundtable last month also released its CEO Economic Outlook Survey for the 2nd Quarter of 2017.   Notable excerpts from the June 6, 2017 release, titled “Survey:  America’s Business Leaders Maintaining Confidence in U.S. Economy“:

The Business Roundtable CEO Economic Outlook Index — a composite of CEO
plans for capital spending and hiring and projections for sales over the next six months —
reached its highest level in three years, since the second quarter of 2014 (95.4). The Index
stood at 93.9 in the second quarter of 2017, up from 93.3 in the first quarter. For the
second quarter in a row, the Index stands well above its historical average of 80.0.

CEO plans for capital investment rose by 4.6 points from the last quarter, while
expectations for sales stayed steady, increasing by 0.5 point. Plans for hiring for the next
six months dropped a modest 3.3 points.

CEOs project 2.0 percent GDP growth in 2017, down two-tenths from their projection for
2017 made in March.

_____

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 2427.43 as this post is written

June 2017 Duke/CFO Global Business Outlook Survey – Notable Excerpts

On June 13, 2017 the June 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:

Uncertainty about regulatory policy and health care costs is causing chief financial officers in the United States to hold back investment plans, a new survey finds.

also:

The survey has been conducted for 85 consecutive quarters and spans the globe, making it the world’s longest-running and most comprehensive research on senior finance executives. This quarter, nearly 750 CFOs responded to the survey, which ended June 9. Results are for the U.S. unless stated otherwise.

Almost 40 percent of CFOs indicated uncertainty is currently higher than normal. Among those companies, about 60 percent said that uncertainty has caused them to delay new projects and investments.

also:

The Optimism Index fell slightly this quarter to 67 on a 100-point scale. That’s two points lower than last quarter but still far above the long-run average of 60.

“CFOs remain optimistic not only about the overall economy but about their own firms too,” Graham said. “Our analysis of past results shows the CFO Optimism Index is an excellent predictor of the future, especially hiring plans and overall GDP growth.”

Hiring plans are stronger than one year ago and U.S. companies expect to pay higher wages, with median wage growth of about 3 percent over the next 12 months, even greater in the construction and tech industries.

The CFO survey contains two Optimism Index charts, with the bottom chart showing U.S. Optimism (with regard to the economy) at 67, 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 2428.11 as this post is written

The June 2017 Wall Street Journal Economic Forecast Survey

The June 2017 Wall Street Journal Economic Forecast Survey was published on June 8, 2017.  The headline is “Unresolved U.S. Debt Ceiling Casts a Shadow Over Many Forecasters’ Economic Outlooks.”

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 in The Wall Street Journal’s monthly survey have raised their assessments of the risk facing the U.S. economy. For the first time since the presidential election, a majority of economists in the survey are concerned the economy could do worse than forecast.

As seen in the “Recession Probability” section, the average response as to the odds of another recession starting within the next 12 months was 15.80%. The individual estimates, of those who responded, ranged from 0% to 33%.  For reference, the average response in May’s survey was 15.27%.

As stated in the article, the survey’s respondents were 60 academic, financial and business economists.  Not every economist answered every question.  The survey occurred on June 2, 2017 to June 6, 2017.

The current average forecasts among economists polled include the following:

GDP:

full-year 2017:  2.3%

full-year 2018:  2.4%

full-year 2019:  2.0%

Unemployment Rate:

December 2017: 4.3%

December 2018: 4.1%

December 2019: 4.3%

10-Year Treasury Yield:

December 2017: 2.66%

December 2018: 3.20%

December 2019: 3.57%

CPI:

December 2017:  2.1%

December 2018:  2.3%

December 2019:  2.3%

Crude Oil  ($ per bbl):

for 12/31/2017: $50.95

for 12/31/2018: $53.31

(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 2426.92 as post is written

Philadelphia Fed – 2nd Quarter 2017 Survey Of Professional Forecasters

The Philadelphia Fed 2nd Quarter 2017 Survey of Professional Forecasters was released on May 12, 2017.  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 2017:  2.1%

full-year 2018:  2.5%

full-year 2019:  2.1%

full-year 2020:  2.3%

Unemployment Rate: (annual average level)

for 2017: 4.5%

for 2018: 4.3%

for 2019: 4.4%

for 2020: 4.5%

Regarding the risk of a negative quarter in real GDP in any of the next few quarters, mean estimates are 8.4%, 10.9%, 14.0%, 17.1% and 17.2% for each of the quarters from Q2 2017 through Q2 2018, respectively.

As well, there are also a variety of time frames shown (present quarter through the year 2026) 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 1.2% to 2.4% 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 2390.19 as this post is written

The May 2017 Wall Street Journal Economic Forecast Survey

The May 2017 Wall Street Journal Economic Forecast Survey was published on May 11, 2017.  The headline is “Economists Say President Donald Trump’s Agenda Would Boost Growth – a Little.”

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:

Early on, White House officials have reportedly considered penciling in growth rates as high as 3.2% a year. But the respondents to the Journal’s survey—a mix of academic, financial and business economists who regularly produce professional forecasts—say numbers so high will be hard to attain, because the policies under consideration just might not pack that punch.

As seen in the “Recession Probability” section, the average response as to the odds of another recession starting within the next 12 months was 15.27%. The individual estimates, of those who responded, ranged from 0% to 33%.  For reference, the average response in April’s survey was 15.79%.

As stated in the article, the survey’s respondents were 59 academic, financial and business economists.  Not every economist answered every question.  The survey occurred on May 5, 2017 to May 9, 2017.

The current average forecasts among economists polled include the following:

GDP:

full-year 2017:  2.2%

full-year 2018:  2.5%

full-year 2019:  2.1%

Unemployment Rate:

December 2017: 4.4%

December 2018: 4.2%

December 2019: 4.4%

10-Year Treasury Yield:

December 2017: 2.79%

December 2018: 3.29%

December 2019: 3.59%

CPI:

December 2017:  2.2%

December 2018:  2.4%

December 2019:  2.3%

Crude Oil  ($ per bbl):

for 12/31/2017: $51.66

for 12/31/2018: $54.52

(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 2391.07 as post is written

The April 2017 Wall Street Journal Economic Forecast Survey

The April 2017 Wall Street Journal Economic Forecast Survey was published on April 13, 2017.  The headline is “Forecasters Lower Growth Outlook as Hopes for Quick Stimulus Fade.”

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.

Two excerpts:

A growing number of forecasters are beginning to reconsider their bullish outlook for the U.S. economy as doubts grow over the extent to which President Donald Trump will be able to implement his agenda.

also:

Growth forecasts for the first quarter have come down. In December, the average forecast called for 2.3% growth in the first quarter. That had fallen to 1.9% in March and dipped again to 1.4% in this month’s survey.

As seen in the “Recession Probability” section, the average response as to the odds of another recession starting within the next 12 months was 15.79%. The individual estimates, of those who responded, ranged from 0% to 38%.  For reference, the average response in March’s survey was 14.41%.

As stated in the article, the survey’s respondents were 61 academic, financial and business economists.  Not every economist answered every question.  The survey occurred on April 7, 2017 to April 11, 2017.

The current average forecasts among economists polled include the following:

GDP:

full-year 2017:  2.3%

full-year 2018:  2.5%

full-year 2019:  2.1%

Unemployment Rate:

December 2017: 4.4%

December 2018: 4.3%

December 2019: 4.5%

10-Year Treasury Yield:

December 2017: 2.84%

December 2018: 3.32%

December 2019: 3.65%

CPI:

December 2017:  2.4%

December 2018:  2.4%

December 2019:  2.3%

Crude Oil  ($ per bbl):

for 12/31/2017: $54.42

for 12/31/2018: $56.40

(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 2338.52 as post is written

CEO Confidence Surveys 1Q 2017 – Notable Excerpts

On April 6, 2017, The Conference Board released the 1st Quarter Measure Of CEO Confidence.   The overall measure of CEO Confidence was at 68, up from 65 in the fourth quarter. [note:  a reading of more than 50 points reflects more positive than negative responses]

Notable excerpts from this April 6 Press Release include:

CEOs’ assessment of current economic conditions improved further, with 71 percent saying conditions were better compared to six months ago, up from 59 percent in the final quarter of 2016. Business leaders were also considerably more positive in their assessment of current conditions in their own industries. Now, 60 percent state conditions in their own industries have improved versus 46 percent in the fourth quarter.

CEOs’ optimism regarding the short-term outlook for the economy eased slightly, but remains rather strong. Currently, 65 percent expect economic conditions to improve over the next six months, compared to approximately 67 percent last quarter. The outlook for their own industries, however, was more favorable, with 67 percent of CEOs anticipating an improvement over the next six months, up from 58 percent in the fourth quarter of 2016.

The Business Roundtable last month also released its CEO Economic Outlook Survey for the 1st Quarter of 2017.   Notable excerpts from the March 14, 2017 release, titled “Business Leaders Positive on Economy:  Expectations for Sales, Hiring & Investment Make Sharp Rise“:

The Business Roundtable CEO Economic Outlook Index — a composite of CEO projections for sales and plans for capital spending and hiring over the next six months — made its largest increase since the fourth quarter of 2009.

The Index jumped 19.1 points, from 74.2 in the fourth quarter of last year to 93.3 in the current quarter. For the first time in seven quarters, the Index has risen above its historical average of 79.8. Its highest level over the past 10 years was 113, reached in Q1 2011.

CEO plans for hiring increased by 18 points from the previous quarter, while expectations for sales and capital expenditures increased by 21 and 18.4 points, respectively, over the previous quarter.

CEOs project 2.2 percent GDP growth in 2017, a 0.2 percent increase over their projection for 2017 made last December.

_____

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 2359.47 as this post is written

March 2017 Duke/CFO Global Business Outlook Survey – Notable Excerpts

On March 15, 2017 the March 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:

Results also show that CFOs are feeling the most confident about economic growth than they’ve been in more than a dozen years, and they strongly support several of the president’s initiatives.

These findings and detailed analysis of tax and economic reforms are from the Duke University/CFO Global Business Outlook. The survey has been conducted for 84 consecutive quarters and spans the globe, making it the world’s longest-running and most comprehensive research on senior finance executives. This quarter, nearly 900 CFOs responded to the survey, which ended March 10. Results are for the U.S. unless stated otherwise.

also:

The Optimism Index jumped this quarter to 69 (on a 100-point scale), the highest level in 14 years and much higher than the long-run average of 60.

“The jump in business optimism is leading to strong hiring and spending plans for 2017,” Graham said. “Our analysis of past forecasts shows that the Optimism Index is an accurate predictor of GDP growth and employment over the next year.”

Sixty-one percent of U.S. firms plan to increase their payrolls in 2017, with an average increase of about 3 percent (median 1 percent). Wage hikes are expected to average nearly 4 percent. Capital spending is expected to increase 6 percent on average (median 3 percent), a notable improvement from flat or negative spending plans for most of 2016.

“There’s a disconnect here,” said Duke finance professor Campbell R. Harvey, founding director of the CFO Survey. “Despite the optimism, the high rate of employment growth and wages, and the substantial possibility of both corporate and individual tax cuts, CFOs have very pessimistic growth forecasts, where only 16.8 percent believe we can hit 3 percent growth in 2017. That is surprising.”

The CFO survey contains two Optimism Index charts, with the bottom chart showing U.S. Optimism (with regard to the economy) at 69, as seen below:

Duke CFO Optimism March 2017

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 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 2381.38 as this post is written

The March 2017 Wall Street Journal Economic Forecast Survey

The March 2017 Wall Street Journal Economic Forecast Survey was published on March 16, 2017.  The headline is “WSJ Survey Of Economists See Growth Climbing in 2017 and 2018, Then Dissipating.”

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.

Two excerpts:

On average, forecasters expect 2.4% growth in 2017, compared with 2.2% prior to the election. Their increase for 2018 was more significant. They now expect 2.5% growth that year, compared with 2% in pre-election forecasts.

also:

Most remain optimistic for now. The Wall Street Journal’s survey of 61 academic, financial and business economists was conducted from March 10 to March 13, and found that 62% believe it is more likely growth will outperform than underperform.

By contrast, just 23% see risks to the downside. The odds of a recession in the next 12 months are placed at just 14%, down from 20% during the same month last year.

As seen in the “Recession Probability” section, the average response as to the odds of another recession starting within the next 12 months was 14.41%. The individual estimates, of those who responded, ranged from 0% to 33%.  For reference, the average response in February’s survey was 15.09%.

The current average forecasts among economists polled include the following:

GDP:

full-year 2016:  1.9%

full-year 2017:  2.4%

full-year 2018:  2.5%

full-year 2019:  2.1%

Unemployment Rate:

December 2017: 4.5%

December 2018: 4.4%

December 2019: 4.5%

10-Year Treasury Yield:

December 2017: 2.94%

December 2018: 3.39%

December 2019: 3.65%

CPI:

December 2017:  2.4%

December 2018:  2.4%

December 2019:  2.4%

Crude Oil  ($ per bbl):

for 12/31/2017: $54.70

for 12/31/2018: $57.31

(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 2381.38 as post is written