‘Envy of the World’—US economy expected to keep powering higher

livemint.com:

It has been two years since forecasters felt this good about the economic outlook. In the latest quarterly survey by The Wall Street Journal, business and academic economists lowered the chances of a recession within the next year to 29% from 39% in the January survey. That was the lowest probability since April 2022, when the chances of a recession were set at 28%.

Economists, in fact, don’t think the economy will get even close to a recession. In January, they on average forecast sub-1% growth in each of the first three quarters of this year. Now, they expect growth to bottom out this year at an inflation-adjusted 1.4% in the third quarter.

Just 10% of survey respondents think the economy will experience at least one quarter of negative growth over the next 12 months, down from 33% in January. The Wall Street Journal survey was conducted from April 5 to 9, just before the release of March consumer-price index data showing inflation running hotter than economists had anticipated. The U.S.

economy has far outperformed expectations over the past year and a half. Instead of stumbling under the weight of the Federal Reserve’s most aggressive interest-rate-raising campaign in four decades, it has continued expanding at a robust clip. Few think that the economy can do quite as well as last year’s 3.1% growth, as measured by the seasonally adjusted fourth-quarter change from a year earlier.

That figure might have been boosted by one-time factors such as federal infrastructure and semiconductor legislation and an uptick in immigration, which also might not last. Still, economists have had to rethink forecasts for a major slowdown as more time has passed and one still doesn’t seem imminent. Economists on average think the