Getty Images News Now many experts are backing off those predictions.
In the latest about-face, 69% of economists surveyed by the National Association for Business Economics, or NABE, said they see a “soft landing” on the horizon.
That’s a “significant shift” from March’s survey, according to NABE, when a similar share of respondents leaned toward a recession.
A soft landing is considered a slowdown in economic growth that avoids a recession.
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A recession consists of at least two consecutive quarters of decline in gross domestic product, or GDP.
Still, some experts are holding tight to their recession predictions. Many young couples don’t split costs equally
According to NABE, 20% of respondents believe that the U.S. is currently in a slump or will be in one by 2023. Bank of America says that a soft landing scenario is most likely. JPMorgan has said a soft landing is possible, though elevated recession risks remain.
Meanwhile, average Americans are not as optimistic, with 71% describing the U.S. economy as either “not so good” or “poor,” according to a recent Quinnipiac University poll. Just 28% of respondents said that the economy was “excellent” or a “good”. Here are three areas that experts will be watching closely to see how they affect Americans’ finances. The job market is mostly strong
The U.S. would have already fallen into a recession if not for the strong job market, according to 77% of NABE survey respondents.
However, the latest jobs report showed less job growth than expected for July. Mervin Jebaraj is the chair of the NABE economic survey. He said that the job market was less robust than it had been in the beginning of the year but still quite robust, given the economic cycle. According to NABE survey participants, it may take longer than 12 months to see a decline in inflation. The NABE economic policy survey chair, Mervin Jebaraj, said that the rate of inflation has decreased significantly over the past year. Meanwhile, the consumer price index was up 3.2% over the past 12 months as of July.
People are generally in agreement the inflation rate has come down significantly and is likely to continue to go down.
NABE economic policy survey chair
Both rates are higher than the Fed’s 2% target for inflation.
While the rate of inflation has come down, that does not necessarily provide relief to consumers.“That doesn’t mean prices have come down; that just means that they’re going up slower,” said Ted Jenkin, a certified financial planner and the CEO and founder of oXYGen Financial, a financial advisory and wealth management firm based in Atlanta.
Unfortunately, once inflation does come down, prices will likely stay higher, noted Jenkin, who is also a member of the CNBC FA Council.
3. Interest rates may stay elevated
The Federal Reserve’s July rate hike took benchmark borrowing costs to the highest levels in more than 22 years.
Experts predict those rates will likely stay high — and could go higher — to curb inflation.
For consumers with outstanding debts, that may pose challenges as those balances become more expensive.
The Fed said in a recent senior loan officer survey that a lot of banks and firms that extend credit are dialing back and reducing credit, noted Peter C. Earle, an economist at the American Institute for Economic Research.
“Any consumers whose consumption is predicated on the availability of credit, even to a small amount, are likely to see that change,” Earle said.