Courtesy of Doug Short.
Earlier today I spent some time reviewing the Q3 GDP release for Japan, which I briefly discussed here. The exercise reminded me that I hadn’t downloaded the Wall Street Journal’s November spreadsheet with the results of their monthly survey of economists.
First, some context: The BEA’s Advance Estimate for Q3 GDP came in at 2.5 percent, better than last month’s WSJ consensus forecast of 2.1 percent. For more details, here is a link to my review of last month’s survey, which had a 2.1 consensus for Q3 and a 2.0 for Q4.
With the 2.5 Q3 GDP Advance Estimate in place and a 10.8% October gain in the S&P 500, have the economists become more optimistic? Yes, but not dramatically so. In fact, the Q4 consensus is 2.5 percent, identical to the BEA’s Q3 Advance Estimate.
What about Q1 2012 GDP? The economists likewise averaged 2.5 percent in their forecasts, although the standard deviation was a bit higher, and the median forecast (half above, half below) was lower at 2.0 percent.
Thus far we’ve looked at the forecasts for quarterly GDP. What about the WSJ survey forecast for 2012 annual GDP? Earlier this month, the Federal Reserve published their annual GDP forecasts, which are available here (click on the PDF attachment). The Fed’s range of estimates for 2012 was 2.3 to 3.5, with a “central tendency” of 2.5 to 2.9.
Now let’s have a look at what the WSJ economists think about the 2012 annual number.
So, with a 2.3 percent average (and 2.2 percent median) the economists are a bit less optimistic than the Fed about next year’s growth.
Odds of a Recession
The WSJ survey questionnaire again this month included a question about the probability, on a scale of 1 to 100, of a US recession in the next 12 months. None of the economists in November offered a negative GDP forecast; however the average response to the probability question was 25%.
