this February Survey of Professional Forecasters Posted on Friday. The median outlook has improved substantially since early January.
figure 1: Reported GDP (bold black), February 2023 Professional Forecaster Survey median (red), November 2022 (light green), WSJ January 2023 median (teal), FT-IGM median ( tan squares) and IMF January 2023 WEO forecasts (sky blue triangles), all in bn.Ch.2012$ SAAR. All forecast levels, except for SPF, are based on growth rates and GDP levels available at the time of forecast. source: Bank of East Asia (2022Q4 ahead of schedule), Philadelphia Fed SPF (Various)Wall Street Journal (January), Financial Times-IGM (December), International Monetary Fund Wow (Updated January 2023)and the authors’ calculations.
Note that the GDP trajectory in the February SPF forecast was lifted by the report of Q4 2022 GDP (stronger than earlier expected) and compared to in wall street journal January survey (in my experience, when the SPF and WSJ surveys are reported in the same month, they often look very similar; the WSJ survey is now published a month ahead of the SPF mid-season).
The probability (q/q) of negative GDP growth has decreased since the November 2022 survey, with the highest probability occurring in Q3 2023 (previously Q2 2023).
source: Philadelphia Fed (February 2023).
SPF provides a distribution of year-over-year growth in 2023 (note that in Figure 1, median SPF quarter-on-quarter growth implies a quarter of negative growth in Q3 2023).
source: Philadelphia Fed (February 2023).
Employment growth was also revised upwards, although forecasts do not appear to reflect a baseline revision that would push NFP employment above 800,000 in December 2022 (see Discussion here).
figure 2: Nonfarm payrolls for January 2023 (baseline revision) release (dark blue), December 2022 release (sky blue), February 2023 Professional Forecast Survey (dark red), and November 2022 survey (pink) , both denoted by 000, sa Source: BLS via FRED, and Federal Reserve Bank of Philadelphia (Different kinds).
The median forecast shows essentially zero NFP job growth in the second quarter of 2023, while the November survey showed job growth of -14,500/month in the fourth quarter of 2023.By this measure, there will be no recession in 2023 (recall that NBER prioritizes current transfers of employment and personal income, see here).
