Odds now favor that the U.S. economy slipping into a recession within the next year, with economists expecting the labor market and demand will become casualties in the Federal Reserve’s inflation battle.
The probability of a downturn over the next 12 months stands at 60%, up from 50% odds in September and double what it was six months ago, according to the latest Bloomberg monthly survey of economists. The latest poll was conducted Oct. 7-12, with 42 economists responding about the chance of a recession.
A “significant tightening of financial conditions is a clear headwind to growth and comes at a time when consumer and business confidence is already under immense pressure from the rising cost of living and falling equity, bond and real estate prices,” said James Knightley, chief international economist at ING.
