The Survey puts the odds that economy will be shrinking in a year’s time at 23 percent. That’s the highest level since 2008 -- but it still implies a recession probability of less than 20 percent, according to a Goldman Sachs analysis based on the Survey’s track record. Forecasts are pretty inaccurate that far out, and respondents put a low probability on a recession within the next couple of quarters.
That “supports our view that a 2019 recession is unlikely,” economists Daan Struyven and David Mericle conclude. The wisdom of crowds can work, they say, “but primarily at relatively short horizons.”
In the end, markets and hard data are sending different signals right now. And most economists are sticking with the latter -- along with survey numbers -- until a more decisive shift becomes obvious.
“The incoming data continues to be good,” Deutsche Bank’s Torsten Slok wrote in a Dec. 6 note. “Where is this recession the market is so worried about?”
This article provided by Bloomberg News.