Stronger than expected momentum in the Biden economy just made Bank of America revise its recession forecast

Prediction   #economics #usgdp  

#usgdp #economics

pc[After two consecutive quarters of negative GDP growth, Bank of America said the third quarter will show a 1.1% quarter-over-quarter rise in GDP, owing in large part to a “substantial narrowing in the trade deficit.” They’re also expecting “solid gains in real consumer spending in August” as a result of the 12% drop in gas prices last month and “softer than expected” inflation data.

“Taking these and other signals into account, we have revised our outlook for the U.S. economy in favor of a prolonged expansion, more tightening from the Federal Reserve, and a later downturn in labor markets,” Gapen and his team wrote.

However, Bank of America still predicts a “mild recession” is on the way—they just believe it won’t come until the first half of next year, instead of “late 2022.” Their argument revolves around the idea that good news can often be bad news in our current imbalanced economy.

Gapen now forecasts 1.6% GDP growth in 2022, followed by a negative 0.2% retreat in 2023 as the result of a “mild” U.S. recession.]ce #checkbyEOM202203 Predicted By Michael Gapen, chief US economist at Bank of America.