Despite turbulent stock markets earlier this year and signs of weakness in industrial output, business economists don’t see the U.S. economy slipping into recession until after 2018, well after President Obama has left office and nearly a decade after the financial crisis.
Sixty-three percent of business economists surveyed by the National Association for Business Economists predicted that a recession would not come until 2018, according to the poll results released Monday.
Although the 48 professional economic forecasters see economic growth slowing to 2.2 percent in 2016, down from 2.4 percent in 2015, very few of them think that it will decelerate fast enough to pitch the country into recession anytime soon.
Only 2 percent think the economy will suffer a downturn in 2016, while a mere 13 percent foresee a recession hitting in 2017. Another 2 percent believe the economy is already in a recession that the official statistics do not yet reflect.
The U.S. has been in an economic expansion since June 2009, according to the National Bureau of Economic Research. At nearly 82 months, the recovery is already much longer than the post-war average of 58.4 months.
Nevertheless, the economists do not see signs that would indicate a looming recession, said Kevin Swift, economist for the American Chemistry Council and the chairman of the survey.
Economists look primarily at four indicators, Swift said Monday: industrial production, job growth, business sales and income growth. Industrial production has been diminished by overseas headwinds, especially falling oil prices crimping oil drilling and the stronger dollar hurting U.S. manufacturers. But the other three have continued expanding and the economists “just don’t see four of those turning direction before 2018,” Swift said.
Roughly half of the economists thought that the most likely factor that could generate another recession would be a lack of credit. But more than one-third of the panelists suggested that when the economy does fall into recession, an error by the Federal Reserve in conducting monetary policy will be to blame. Another third thought that a stock market crash would yield the next recession.
Another top fear was the possibility of a collapse in China. About a quarter thought that trouble in China would create the next recession.
