Economists expect US recession, above-target inflation this year

AFP: The United States will likely enter a recession in 2023 and face high inflation well into 2024, a majority of economists predicted in their response to a semi-annual survey. 

More than two-thirds of respondents to the National Association for Business Economics (Nabe) Policy Survey also see inflation remaining above 4 percent at the end of 2023.

The survey summarised the responses of 217 Nabe members and was conducted between March 2 and March 10, the organisation said in a statement. 

The US Federal Reserve has raised rates 4.75 percentage points in a bid to tackle rising inflation, which reached its highest level in decades in 2022.

Price rises slowed slightly to an annual level of 6 percent in February, which is well above the Fed’s long-term target of 2 percent.

Amid the gloomy economic forecast, there was also some good news, with just 5 percent of respondents believing the US is currently in the midst of a recession, “far fewer” than the 19 percent in its previous economic survey, Nabe President Julia Coronado said in a statement.

Economists also slightly raised the chances of the Fed achieving a so-called “soft landing” – bringing down inflation while avoiding a recession – from 27 percent in August to 30 percent in March 2023.