Business economists continue to anticipate slow US growth, with significant downside risk. Recession odds remain low.

Today’s economic outlook from the National Association of Business Economists continues to reflect the prevailing view: slower growth, heightened downside risk, and a slim likelihood of a recession in the next six months.

From the survey:


• Panelists expect economic growth—as measured by inflation-adjusted gross domestic product (real GDP)—to continue. The median forecast for GDP growth in 2019 is 2.3%, unchanged from the October survey. Respondents anticipate GDP growth will register 1.8% in 2020, also unchanged from the October survey. Real GDP increased 2.9% in 2018.

• On a year-over-year basis, the median projection is for real GDP to rise 2.1% from the fourth quarter (Q4) of 2018 to Q4 2019 and by 1.9% through Q4 2020. In comparison, real GDP increased 2.5% year-overyear in Q4 2018. No panelists forecast a recession in 2020 (two quarters of negative GDP growth), although the median of the five most pessimistic forecasts indicates a decline of a 0.1% annual rate in Q4 2020.

• Overall, the view for the future improved compared to the October survey. In that survey, 81% of panelists indicated the balance of risk was tilted to the downside, compared to 71% in the December survey. Furthermore, 19% of the panelists currently believe the balance of risk is to the upside—an increase from the 8% of respondents who held this view in October. The share of panelists that believes risks are equally balanced remains at 10%.

• The odds of a recession occurring through the first half of 2020 remain generally low. Panelists put the odds of a recession starting in the second half of 2019 at 5%, rising to 21% by the first half of 2020 and 43% by the end of next year. Respondents put the odds of a recession starting by mid-2021 at 66%. The odds of a recession beginning after mid-2021are 34%.

The Associated Press reports,

The economists expect American consumers to continue driving the economy. Consumer spending, which accounted for almost all U.S. economic growth from July through September, is expected to grow a healthy 2.6% this year and 2.4% in 2020.

On top of last week’s strong jobs report, this about as good as we can expect this year. Plenty of caution flags still flying.