The US economy to enter recession next year

Most business economists believe the US economy will continue to slow down and enter a recession next year. However, the impact of the recession on the labor market may be limited.

According to a survey by the National Association for Business Economics (NABE), 57% of economists believe that the likelihood of a recession in 2023 is greater than 50%. The survey shows that 52% of respondents expect a recession to start in the first quarter of 2023.

The survey was conducted November 7-18. Its results point to the ongoing tightening of the Fed's monetary policy in an attempt to contain inflation. Tight monetary policy, according to 67% of respondents, is the biggest risk to the economy. Also, 77% of those surveyed rated the chance of a soft landing as 50% or lower. Inflation, according to economists, is the biggest problem facing the economy.

The majority of respondents, namely 56%, believe the unemployment rate will peak at 5% or lower. At the same time, 17% of respondents believe it will reach 5.5% or more. This level would be similar to the unemployment rate during past recessions.