Q4/Q4 2023 growth is relatively unchanged.Modal speculation on recession start date shifts to Q1-Q2 2024 (survey results here; Financial Times article).
figure 1: GDP (bold black), Professional Forecaster Survey May median (blue), FT-Booth School June median (red squares), FT-Booth School high/low (gray +), GDPNow 6/ 8 (sky blue squares), potential GDP (bold grey) all in billions Ch.2012$ SAAR. Source: BEA 2023Q1 Second Edition, FT-IGM (June 2023), Federal Reserve Bank of Philadelphia, Federal Reserve Bank of AtlantaCBO (February 2023), and authors’ calculations.
The survey median is slightly higher than my response (+0.9% in Q4/Q4 2023), while my view on downside and upside risks is much more pessimistic (my low/high range is -1.0% and +2.0%, while surveys +0.5 to +2.2%).
My estimate is for a recession in Q3-Q4 2023 (same as my March guess). The current modal response is 2024Q1-Q2, reverting from the previous 2023Q3-Q4 modal response.
source: FT-Booth School Survey, June 2023.
The delay in the start of the recession is not surprising given the incoming data, which Nowcasting beats forecast for early Mayand the resolution of debt ceiling uncertainty.
Note that the end of 2023 is consistent with the term propagation model (using a 50% threshold), such as this post.
Given this speculation about the onset of a recession, survey respondents believe the timing of peaking in federal funds and starting to decline (Q3 2023 for the former and Q1 2024 to Q2 2024 for the latter) is not enough. Strange. It’s interesting to think we’re less than three weeks into the third quarter.
Respondents believe that the peak fed funds will be between 5.5%-6%, which is in line with my view (and in line with the market implied forecast [Atlanta Fed probability tracker, accessed 6/12/2023]).
