The chart above exhibits that 84% of CEOs are forecasting a recession over the subsequent 12 months, 69% of Shoppers saying the identical factor, with the yield curve predicting a 61% probability of a contraction.
The issue is these units of forecasts is already 2 months previous, dated October 3, 2023. It was earlier than the very encouraging CPI, Unemployment, and GDP knowledge releases.
I’ve spent a variety of time discussing why forecasts are a waste of time. This got here up yesterday on Portfolio Rescue with Ben Carlson. We talked about how you must take into consideration Wall Avenue forecasts concerning the economic system. The TL:dr is the brief time period is simply too random, and so solely serves as advertising for institutional buying and selling companies.
The place the exception comes from are folks like ISI’s Ed Hyman, who all the time laid out a number of potentialities — consensus and the outliers in every route — and what the market reactions is likely to be to that.
Your entire dialogue is value watching, however the video beneath is teed up for the financial forecasting dialogue.
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Beforehand:
Slowing U.S. Financial system, State by State (November 22, 2023)
Can Economists Predict Recessions? (September 29, 2023)
Why Recessions Matter to Buyers (July 11, 2022)
Forecasting & Prediction Discussions
Supply:
U.S. Financial Forecasts: What’s the Likelihood of a Recession in 2024?
By Dorothy Neufeld
Visible Capitalist, October 3, 2023
