The Wall Street Journal's December Survey of economists is now available. Let's see what they have to say about GDP (download Excel File).

First, some context: The BEA's Second Estimate for Q3 GDP came in at 2.0 percent, a downward revision from the Preliminary Estimate of 2.5 percent.

With the 2.0 Q3 GDP Second Estimate in place and a -0.51% November slip in the S&P 500, have the economists become more less optimistic about Q4? No indeed! In November the forecast median and mean for Q4 GDP were both spot on 2.5 percent (see previous survey). In December the median and mean have risen to 2.9 and 2.8, respectively. The mode (the most frequent forecast) was 3.0 percent. That would put us fairly close to the 3.3 average since the inception of quarterly GDP reporting in the late 1940s.

 

 

What about Q1 2012 GDP? We see a contraction in optimism. The median and mean drop to 2.0 and 2.1, reflectively, and the mode was 1.5; that's half the mode for 2011 Q4.

 

 

Thus far we've looked at the forecasts for quarterly GDP. What about the WSJ survey forecast for 2012 annual GDP? Last month, the Federal Reserve published their latest annual GDP forecasts, which are available here (click on the PDF attachment). The Fed's range of estimates for 2012 was 2.3 to 3.5, with a "central tendency" of 2.5 to 2.9.

Now let's have a look at what the WSJ economists think about the 2012 annual number.

 

 

So, with a 2.3 percent average (and 2.2 percent median) the economists are a bit less optimistic than the Fed about next year's growth.

Odds of a Recession

The WSJ survey questionnaire again this month included a question about the probability, on a scale of 1 to 100, of a US recession in the next 12 months. None of the economists in December offered a negative GDP forecast; however the average response to the probability question was 22%, a small drop from last month's 25%.