According to consensus, the slowdown continues to be delayed into the fourth quarter. The average forecast is negative for only a quarter, but the median is two (Q3, Q4).
figure 1: GDP (black), WSJ July survey average forecast GDP (green), April survey (blue), January survey (red), 7/18 GDPNow forecast (light blue squares), all in billions. 2012 quarterly seasonally adjusted rates. Sources: BEA, WSJ surveys (various), and authors’ calculations.
While the average forecast trajectory continues to rise as real GDP outcomes continue to surprise upward, forecasts are fairly spread out, as shown in Figure 2.
figure 2: GDP (black), average forecast GDP from WSJ July poll (green), median for Price/Ameriprise Financial (pink), 20% trim high for Feinup, Hamilton/Calu. (grey), Fratantoni/Mortgage Bankers Association low value (grey), GDPNow forecast 7/18 (light blue squares), all units are 1 billion Ch.SAAR for 2012. Sources: BEA, WSJ surveys (various), and authors’ calculations.
A 20% high-side revision implies an average annualized growth rate of 1.5% over the next five quarters (average/median forecasts of 0.68%/0.66%). The adjusted minimum is 0.46%. Note that the sample top forecast (the irrepressible James F. Smith, now EconForecaster) is 3%(!).
Recession Probabilities in Surveys, Contrasted with Estimates Based on Term Spreads – This Article Discusses postal.
