About six months after the US slowdown began, a majority of economists have finally turned cautious. From the WSJ:
The U.S. has finally slid into recession, according to the majority of economists in the latest Wall Street Journal economic-forecasting survey, a view that was reinforced by new data showing a sharp drop in retail sales last month…
The survey, conducted March 7 through March 11, marked a precipitous shift to the negative from the previous survey conducted five weeks earlier. For example, the economists now expect nonfarm payrolls to grow by an average of only 9,000 jobs a month for the next 12 months — down from an expected 48,500 in the previous survey. 20 economists now expect payrolls to shrink outright. And the average forecast for the unemployment rate was raised to 5.5% by December from 4.8% in the previous survey.
Much of the gloom stemmed from last Friday’s employment report, which showed a loss of 63,000 jobs in February, the second consecutive monthly decline. “My recession call comes from the employment data,” said Stephen Stanley of RBS Greenwich Capital. “It struck me as a recessionary number.”
20-nine of 55 respondents said they expect the economy to contract in the current quarter and 25 expect it to do so in the second. The average of all the forecasts is for meager growth — just 0.1% at an annual rate in the current quarter and 0.4% in the second.
What’s different, and notable, is that a growing percentage of surveyed economists are beginning to suggest that this recession will be worst than the last two. This group is still in the minority–48%–but we are glad to see others are finally starting to notice what we think has been obvious for months: we’re screwed.
(And the good news is, once we finally have a strong consensus that we’re screwed, we’ll have paved the way for recovery).