The forecast for the United States is always a subject for doom and gloomers, and lately the headlines indeed do seem moribund: inflation, Russia, China, an 800% increase in the Federal Reserve’s benchmark lending rate since March 2022, and a banking system under stress. Amid a climate of political derision, fear about the dollar’s role as the world’s most trusted currency, and other fears making news, the 60 economists surveyed in early April see mild contraction ahead, but no recession.
Crisis, risk, and unexpected bad events are an unrelenting constant in a world that is slowly making progress. It’s important that 60 leading economists in early April surveyed by The Wall Street Journal (WSJ) are not predicting a recession. Knowing what that means to your investments requires perspective. To be clear, the growth of the economy drives returns on stocks, bonds, and other investments. For the record:
For the current quarter, which ends June 30, 2023, the consensus forecast of economists surveyed by WSJ is for +1.7% growth of the economy.
The average forecast of the economists surveyed is for a growth rate of +0.6% in the third quarter growth of 2023, followed by a -.25% contraction.
The consensus of economic experts polled quarterly by The Journal is for the nation’s gross domestic product to grow +.16% and +0.9% in, respectively, the final quarter of 2023 and first quarter of 2024.
The outlook is not for strong growth, but it is also not bleak. The past does not always indicate what the future may hold. But current economic problems are not unprecedented, and the U.S. system of capitalism grew through it all. For investors, sorting through the torrent of financial news bombarding us all the time is not easy.
In the roaring social media age of the 2020s, financial news is programmed to grab your attention but otherwise usually of little value. Meanwhile, traditional financial news outlets seem inadequate -- not personalized, wizened, or trustworthy, and leaving you to figure out things.
An important service we provide is education. In the form of articles like this or other media, we continually reinforce facts from authoritative sources about investing.
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