Almost two-thirds of economists believe the economy is in or near a recession

CNN business

According to the most recent survey by the National Association for Business Economics, nearly two-thirds of business economists believe the United States is already in or will be in a recession in the next 12 months.

More than half of NABE respondents said America was more than equally likely to experience a recession within the next year, with 11% saying they believe the nation is already in one, so the state survey for the third quarter released Monday.

The poll, which included responses from 55 members polled in early October, showed the economy is slowing and negative risks are mounting – particularly from rising interest rates, which were cited as the top downside risk for businesses.

The survey also showed that sales growth is slowing, wages are rising and capital spending is falling.

“About a third of respondents report their companies’ revenues increasing in the third quarter of 2022, compared with nearly two-thirds at the end of last year,” said NABE survey business conditions chairman Jan Hogrefe, who also serves as chief economist for Boeing commercial aircraft, said in a statement. “Profit margins have fallen on balance, with more respondents reporting falling rather than rising profit margins for the first time since mid-2020.”

Despite a robust recovery from the Covid-19 pandemic, the US economy has been weighed down by a month-long bout of historically high inflation. The Federal Reserve has stepped up efforts to contain high prices with a series of blockbuster rate hikes.

The high inflation environment has prompted price increases at the firm level – 52% of respondents said the prices their firms charge increased in the third quarter – but the latest survey shows some prices are beginning to fall again. A total of 9% of respondents said prices are falling, the largest proportion since January 2021.

One driver of these cost pressures appears to be rising wages: 62% of respondents said wages at their companies rose in the third quarter, up from 55% in the July survey in the second quarter, but below the record high of 70% that was recorded in April.

The survey also found that third-quarter materials costs were at their lowest since April 2021.

According to the survey, shortages of raw materials and labor continue to hamper enterprise operations. The proportion of respondents reporting bottlenecks remained near record levels.


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