By Nathalie Voit

About one in two economists surveyed by the National Association of Business Economics (NABE) expect a recession to begin by year’s end or by the first quarter of 2023.

Nearly one in five (19%) believe the U.S. is already in a recession. Another 20% expect the next recession to occur in the latter half of next year or later.

The gloomy findings suggest most economists are skeptical of the economy experiencing a ‘soft landing.’

The survey results show nearly three in four forecasters (73%) are not at all confident or not very confident that the Federal Reserve will be able to tame sky-high inflation to its 2% target rate without triggering a recession within the next two years. Just 13% of economists in the NABE Economic Policy Survey are confident or very confident the central bank can curb inflation without inducing an economic slowdown.

Overall, the economists are unconvinced that the Fed will be able to bring inflation down to its 2% goal, NABE Policy Survey Chair Juhi Dhawan said in the report. 

According to Dhawan, the overarching concern among economists remains the high cost of living and the possibility of an economic downturn. 

However, the panelists did express optimism about certain domestic policies, most notably the recently passed Inflation Reduction Act (IRA).

The findings show that over three-fourths of economists (76%) back the $300 billion deficit reduction goal, while more than two-thirds support the 15% minimum corporate tax (69%) component of the IRA and provisions to expand healthcare subsidies and drug-pricing reform (68%). Sixty-three percent of panelists support subsidies, rebates, and investments to combat climate change. 

Economists remain divided on general fiscal policy. Just over half of respondents believe current policy is too stimulative, while 44% think it is “about right.”  

The semiannual survey was conducted between Aug. 1 and Aug. 9 and summarized the views of 198 NABE members.