(Different from the general population.) in prreferring to the Wisconsin Manufacturers and Business Association Report:
The percentage of employers who believe a recession is imminent next year fell from 60% in January to 54% in the newly released survey from winter to summer, the survey showed.
Schulz/WPR continued:
Research by investment banking firm Goldman Sachs The chances of a U.S. recession in the next year fell to 25% last month from 35% in March, it said. Federal government avoids debt default.
But Mengzi Chin, a professor of public affairs and economics at the University of Wisconsin-Madison, said Goldman’s forecast may be a bit more optimistic than most economists’ forecasts. Economists expect a slowdown in the second half of 2023 or early 2024, he said.
“While people think the probability of a recession is fading, I think the average forecaster still thinks a recession is coming,” Chin said. “Having said that, I think most of them also think it’s going to be a mild recession.”
Chin said the economy is still growing, but at a slower pace over the past six months or so. The purpose of the Fed raising interest rates is to slow economic growth in order to curb inflation.
The disconnect between Goldman (which I think is down to 20% now) and the consensus is shown in the chart below.
source: Jan Hatzius, “Global Vision: The Narrative Turn,” Goldman Sachs (July 17, 2023).
The WSJ consensus differs from that implied by the 10-March spread, as this post About 90%.
Note that Wisconsin may feel the recession differently than the nation. Relative to the nation, Wisconsin is a manufacturing-intensive state and thus may be more sensitive to cycles than other service-intensive states.
Here are the month-over-month changes in the national nonfarm payrolls and GDP versus Wisconsin:
figure 2: Quarter-over-quarter nonfarm payrolls growth for the U.S. (blue) and Wisconsin (brown), both annualized. Recession peak-to-trough dates as defined by NBER are grayed out. Sources: BLS, NBER, and authors’ calculations.
image 3: Real GDP quarter-over-quarter growth rates for the US (blue) and Wisconsin (brown), both annualized. Recession peak-to-trough dates as defined by NBER are grayed out. Sources: BEA, NBER and authors’ calculations.
After accounting for measurement error (2SLS GDO of national GDP), it appears that a 1 percentage point acceleration in US GDP growth is associated with a 1.1 to 1.15 percentage point acceleration in WI GDP growth (although the difference is not statistically significant at the 5 percent level).
Evers government discusses outlook for macroeconomic aggregates compared with latest data postal.
