The Blubber

Per WSJ

61% of businesses and academic economists expect the US economy to go into recession this year as GDP is expected to stagnate. Despite the Feds trying to bring down inflation, most respondents think this won't happen.

The report came with a graph that showed the likelihood of a recession within the last few years. In April 2020, 96% of economists believed there would be a recession.

Now, only 61% believe that there would be a recession, down from 63% in an October survey. The reports come despite the outlook on inflation becoming somewhat more positive.

Brett Ryan and Matthew Luzzetti, Deutsche Bank economists, noted that although there is progress seen in terms of inflation, other important categories are still struggling. They noted that the Fed still needs to do more if they want to fix the problem.

“The Fed would stay on its tightening trajectory to restore the rebalance of labor market and price stability, which in our view would engineer a sharp rise in unemployment and recession,”

The expectations come as even other US banks are making statements that Americans have to prepare for a recession. Even Morgan Stanley analysts said the bank will likely "incorporate a more severe economic outlook."

Aside from banks, even Twitter and Tesla CEO Elon Musk said there would be a serious recession in 2023. He also highlighted how the potential upcoming recession could be comparable to 2009.

The report highlighted that although economists think that a recession is coming and might not be avoidable, they still think its effects might not be that massive. It was noted that economists expect the potential recession to be "shallow and short-lived."

Economists expect Q4 2023 GDP growth to be at just 0.2% compared to a previous survey done by the WSJ with a 0.4% expectation at that time. The potential category that economists expect to be hit by inflation the most is housing.

See flow at unusualwhales.com/flow.

Other News:

• U.S. banks get ready for a recession
• Elon Musk has said: I think 2023 is going to be quite a serious recession, and it's going to be comparable to 2009

Resources:

The Wall Street Journal