Tag Archives: Economic Forecasts

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

Philadelphia Fed – 1st Quarter 2017 Survey Of Professional Forecasters

The Philadelphia Fed 1st Quarter 2017 Survey of Professional Forecasters was released on February 10, 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:  2.3%

full-year 2018:  2.4%

full-year 2019:  2.6%

full-year 2020:  2.1%

Unemployment Rate: (annual average level)

for 2017: 4.6%

for 2018: 4.5%

for 2019: 4.5%

for 2020: 4.6%

Regarding the risk of a negative quarter in real GDP in any of the next few quarters, mean estimates are 7.7%, 11.2%, 14.6%, 16.2% and 17.7% for each of the quarters from Q1 2017 through Q1 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 1.8% to 2.5% range.

_____

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 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 2317.66 as this post is written

The February 2017 Wall Street Journal Economic Forecast Survey

The February 2017 Wall Street Journal Economic Forecast Survey was published on February 9, 2017.  The headline is “Forecasters See Slow Progress in Labor-Market Measures Favored by Trump Administration.”

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:

Mr. Mnuchin also mentioned the U-6 rate, which includes the discouraged workers mentioned above and people who have part-time jobs but want full-time work.

This is the Labor Department’s broadest measure of unemployment, which stood at 9.4% in January. Over the next three years it is expected to decline to 8.7%, according to the average forecast. If correct, that, too, would be higher than the rate seen in previous booms.

also:

The survey respondents expect labor-force participation to rise to 63.3% by the end of 2019. The overall population will also grow over this period, according to Census Bureau projections (which already assume that immigration will slow), and so the number of people outside the labor force would likely remain around 95 million.

As stated in the article, the survey’s respondents were 62 academic, financial and business economists.  Not every economist answered every question.  The survey occurred on February 3, 2017 to February 7, 2017.

As seen in the “Recession Probability” section, the average response as to the odds of another recession starting within the next 12 months was 15.09%. The individual estimates, of those who responded, ranged from 0% to 33%.  For reference, the average response in January’s survey was 16.49%.

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: 2.86%

December 2018: 3.31%

CPI:

December 2017:  2.3%

December 2018:  2.4%

Crude Oil  ($ per bbl):

for 12/31/2017: $55.79

for 12/31/2018: $59.17

(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 2308.81 as post is written

The January 2017 Wall Street Journal Economic Forecast Survey

The January 2017 Wall Street Journal Economic Forecast Survey was published on January 12, 2017.  The headline is “Forecasters See Upside Risks to Their Economic Outlooks at Highest in More Than Two Years.”

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:

In the most recent survey, 64% of respondents said the risk was to the upside, the highest in over two years, and a reversal from the mood of recent years, which was focused on potential risks from a global economic slowdown.

also:

In anticipation of Mr. Trump’s presidency, economic forecasts have already risen. The average forecast is for GDP growth of 2.4% in 2017 and 2.5% in 2018. That is a 0.2 percentage point increase for 2017 and 0.5 percentage point for 2018.

As stated in the article, the survey’s respondents were 67 academic, financial and business economists.  Not every economist answered every question.  The survey occurred on January 6, 2017 to January 10, 2017.

As seen in the “Recession Probability” section, the average response as to the odds of another recession starting within the next 12 months was 16.49%. The individual estimates, of those who responded, ranged from 0% to 75%.  For reference, the average response in December’s survey was 16.79%.

The current average forecasts among economists polled include the following:

GDP:

full-year 2016:  2.0%

full-year 2017:  2.4%

full-year 2018:  2.5%

full-year 2019:  2.2%

Unemployment Rate:

December 2017: 4.5%

December 2018: 4.4%

December 2019: 4.5%

10-Year Treasury Yield:

December 2017: 2.89%

December 2018: 3.36%

CPI:

December 2017:  2.3%

December 2018:  2.4%

Crude Oil  ($ per bbl):

for 12/31/2017: $56.31

for 12/31/2018: $59.28

(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 2270.44 as post is written

CEO Confidence Surveys 4Q 2016 – Notable Excerpts

On January 5, 2017, The Conference Board released the 4th Quarter Measure Of CEO Confidence.   The overall measure of CEO Confidence was at 65, up from 50 in the third quarter. [note:  a reading of more than 50 points reflects more positive than negative responses]

Notable excerpts from this January 5 Press Release include:

CEOs’ assessment of current economic conditions was considerably more optimistic, with close to 60 percent saying conditions were better compared to six months ago, up from just 17 percent last quarter. Business leaders’ appraisal of current conditions in their own industries also improved significantly, with 46 percent stating conditions in their own industries have improved versus only 21 percent in the third quarter.

CEOs’ short-term outlook for the U.S. economy also improved markedly, with approximately 67 percent expecting better economic conditions over the next six months, up from 25 percent last quarter. The outlook for their own industries was also more favorable, with 58 percent of CEOs anticipating an improvement over the next six months, compared to about 23 percent in the third quarter.

The Business Roundtable last month also released its CEO Economic Outlook Survey for the 4th Quarter of 2016.   Notable excerpts from the December 6, 2016 release, titled “Business Leaders:  Plans for Hiring Rise, Expectations for Sales Increase“ (pdf):

In their first GDP estimate for 2017, CEOs projected 2 percent growth next year. While the outlook for hiring is positive, the overall results suggest continued economic growth, albeit at a slow pace.

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 — rose by 4.6 points, from 69.6 in the third quarter to 74.2 in the fourth quarter. The Index remains below its historical average of 79.6.

CEO expectations for sales over the next six months increased by 4.5 points, and expectations for hiring increased by a more robust 14.8 points over last quarter. However, CEO plans for capital expenditures fell by 5.4 points relative to last quarter.

_____

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 2268.06 as this post is written

December 2016 Duke/CFO Global Business Outlook Survey – Notable Excerpts

On December 7, 2016 the December 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:

For the last five quarters, the Duke University/CFO Global Business Outlook Optimism Index has hovered around the long-term average of 60 (on a 100-point scale). This quarter, post-election, the index jumped to 66, the highest level in nearly a decade. The proportion of CFOs becoming more optimistic outweighs those becoming more pessimistic by 4 to 1. Historically, a jump in the optimism index has predicted strong employment growth and rising GDP over the next year.

also:

U.S. firms plan to increase their payrolls by 2 percent in 2017 and expect a median increase in capital spending of 2 percent. While modest, spending is up from last quarter’s prediction of no growth.

The corporate sector faces increased financial risk due to a recent increase in borrowing. U.S. manufacturing firms increased their borrowing as a percentage of assets by one-third over the past five years; and energy firms levered up by two-thirds. More than 60 percent of the firms in these industries say that this high debt load will limit future corporate investment.

“Weak business spending has dampened economic growth during the past two years,” Graham said. “Finance chiefs tell us that any rebound in business spending will be muted because of debt loads at many firms that are already high.”

The CFO survey contains two Optimism Index charts, with the bottom chart showing U.S. Optimism (with regard to the economy) at 66, as seen below:

Duke CFO Survey optimism

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 2247.93 as this post is written

The December 2016 Wall Street Journal Economic Forecast Survey

The December 2016 Wall Street Journal Economic Forecast Survey was published on December 8, 2016.  The headline is “Economists Doubt the U.S. Can Regain Many of the Factory Jobs Lost in Recent Decades.”

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:

“Manufacturing employment is now back to 1941 levels and falling,” said James Smith, chief economist of Parsec Financial. “This is a global trend and not at all specific to the U.S. It is caused by labor productivity growth.”

also:

Yet many of the economists in the survey agree with Mr. Smith that the biggest reason so many fewer people work in today’s factories are advances in automation. Improvements in assembly-line technologies and the deployment of industrial robots allow U.S. manufacturers to produce more goods than ever before, but with much smaller workforces. Even if all outsourcing were ended immediately, the march of technology would put steady downward pressure on manufacturing employment.

Asked about the primary cause of the decline of manufacturing jobs, 47% of respondents pointed to automation while 18% said automation and offshoring had played roughly equal roles. About 28% said offshoring had been the primary culprit.

As stated in the article, the survey’s respondents were 62 academic, financial and business economists.

As seen in the “Recession Probability” section, the average response as to the odds of another recession starting within the next 12 months was 16.79%. The individual estimates, of those who responded, ranged from 0% to 65%.  For reference, the average response in November’s survey was 18.54%.

The current average forecasts among economists polled include the following:

GDP:

full-year 2016:  1.9%

full-year 2017:  2.4%

full-year 2018:  2.4%

full-year 2019:  2.2%

Unemployment Rate:

December 2016: 4.7%

December 2017: 4.5%

December 2018: 4.4%

December 2019: 4.6%

10-Year Treasury Yield:

December 2016: 2.34%

December 2017: 2.79%

December 2018: 3.23%

CPI:

December 2016:  1.9%

December 2017:  2.4%

December 2018:  2.5%

Crude Oil  ($ per bbl):

for 12/31/2016: $50.66

for 12/31/2017: $55.58

for 12/31/2018: $57.19

(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 2247.85 as post is written