But the range of their forecasts is wide, from a relatively remote chance of a recession — commonly defined as a shrinking of the economy for two consecutive quarters — to more confident predictions that a downturn is imminent. In general, forecasters who say a recession will be avoided emphasize that they might be too optimistic, while those who are confident that the economy will shrink are quick to say the recession won’t be that bad.
Here is what economists, analysts and strategists have said recently about the chances of a recession:
Deloitte: Daniel Bachman, who runs the U.S. economic forecasting team at the consulting firm, puts the chance of a recession at about 15 percent, “less likely than some analysts would have you believe.”
Pantheon Macroeconomics: Ian Shepherdson, the chief economist of the research house, says that its “base case remains that a recession is unlikely,” and that if there is one, it will be “brief and mild.”
Morgan Stanley: Ellen Zentner, the investment bank’s chief U.S. economist, notes that “accelerating inflation has been a common precursor to recessions.” But despite high and rising inflation, the probability of a recession in the next 12 months is about 30 percent, according to the bank’s models.
Citigroup: Economists at Citigroup, led by Nathan Sheets, the global chief economist, expect the U.S. economy to slow but not shrink, although “we see recession probabilities as appreciable and rising.”
HSBC: Janet Henry, the bank’s global chief economist, and her team are not forecasting a U.S. recession, “but our forecasts certainly paint a picture of a downswing that is just as uneven as the recovery that preceded it.”
A decent chance
JPMorgan Chase: Economists at the largest bank in the United States, led by the chief economist Bruce Kasman, have raised their expected probability of a recession in the next 12 months to an “uncomfortably high” 35 percent. “The risks are skewed decisively to the upside on inflation and to the downside on growth,” they write.
TD Bank: The Canadian bank’s economics team, led by Beata Caranci, the chief economist, is not expecting a U.S. recession, although “with growth close to stall speed, there is a very thin margin for error if another shock hits economies.”
Credit Suisse: After deep cuts to its forecasts, the U.S. economy is on “the edge of a recession,” according to the team led by Jeremy Schwartz, the Swiss bank’s director of U.S. economics, but there are “buffers” that should shield the economy from “spiraling into a broader downturn.”
Oxford Economics: The Federal Reserve has a “fighting chance” to tame inflation without causing a recession, writes Kathy Bostjancic, the group’s chief U.S. economist. She has cut her forecasts for growth, which come “precariously close to tipping into a recession by mid-2023,” she says.
Close to a tossup
Bank of America: Ethan Harris, a global economist at the bank, expects growth to slow to almost zero in the second half of next year, with a 40 percent chance of an outright recession, and “only a modest rebound” in 2024.
S&P Global Ratings: Beth Ann Bovino, the U.S. chief economist, writes that “economic momentum will likely protect the U.S. economy from recession in 2022.” She puts the probability of a recession at 40 percent, adding that “it’s hard to see the economy walking out of 2023 unscathed.”
Goldman Sachs: Analysts at the Wall Street giant have raised their predicted probability of a recession, but think that one can still be avoided (via “a feasible though difficult path”). David Mericle and Ronnie Walker put the odds of a recession at just under 50 percent over the next two years, up from 35 percent.
Fitch Ratings: The team at Fitch Ratings, led by Brian Coulton, the chief economist, expects that economic growth will slow to just 0.1 percent per quarter in the second through fourth quarters next year, a pace that will put the economy “perilously close to the risk of technical recession.”
Counting on it
Berenberg: Analysts at the German bank, led by Holger Schmieding, the chief economist, expect the U.S. economy to stagnate in late 2022 and shrink in the first three quarters of 2023, but only by a “relatively modest” 0.4 percent for the year. “With luck, the recession will be a shallow one,” they write.
Deutsche Bank: Months ago, economists at the German bank forecast that the U.S. economy would tip into a recession by the end of 2023, but now they expect “an earlier and somewhat more severe recession,” according to the team led by Matthew Luzzetti, the bank’s chief U.S. economist. They expect the economy to shrink 0.5 percent in 2023.
Wells Fargo: A recession in 2023 “seems more likely than not,” according to a report by Jay Bryson, the bank’s chief economist. His forecast is for the economy to shrink 1 percent over two quarters next year, “one of the milder downturns in the post-W.W. II era,” similar to the recession in the early 1990s. For something resembling a silver lining, he writes, “Because we think the downturn will not be especially deep, we do not expect the labor market to fall completely apart.”