Economists surveyed by the National Association for Business Economists slightly upgraded their fourth-quarter growth estimates for the US gross domestic product, but they pulled back on forecasts for 2024. They also lowered growth estimates for nonfarm employment growth next year.
The median forecast for GDP growth in the fourth quarter was 1.0% on an annualized basis, according to the NABE Outlook survey released today. That’s up from 0.5% growth forecast in a similar survey released last May.
However, the median forecast for GDP growth in the first quarter of 2024 was ratcheted downward to 0.5% in the current survey from 1.3% in the May survey. The economists also lowered growth forecasts for subsequent quarters through the fourth quarter of 2024, which is forecast at 1.7% growth, down from the May estimate of 2.0%.
“US economic growth projections are stronger for 2023, but panelists expect moderation in 2024,” said NABE President Julia Coronado, founder and president of MacroPolicy Perspectives LLC. “Participants anticipate further slowing in inflation, excluding food and energy costs, but doubt it will reach the Fed’s 2% target before year-end 2024.”
Coronado also noted while most respondents expect an uptick in unemployment, few believe it will exceed 5%.
In terms of growth in nonfarm employment, the median forecast among NABE respondents predicted the fourth quarter of this year would see an average of 83,000 jobs added per month. That’s up significantly from the 5,000 per month forecast in the May survey. However, the median forecast for the first quarter of next year is for the US to add only 25,000 jobs per month; they had previously forecast 47,000. Forecasts were downgraded for each month through the fourth quarter of 2024 when the median projection calls for the US to add 115,000 jobs per month, down from the May forecast of 117,000.
Separately, The Conference Board Employment Trends Index released today also points to continued growth in jobs.
Another finding: Fewer respondents foresee a recession in the next 12 months in the current survey compared to the May survey, with most in the current survey assigning it a probability of 50% or less.
The survey included responses from 40 professional forecasters and took place between Sept. 15 and Sept. 25.