U.S. Economists Say Recession Odds Fall Even Amid Iran War, While Inflation Edges Higher

[Financial News] Despite the war in Iran, U.S. economists believe the chance of the U.S. economy slipping into recession has fallen, but inflation is likely to remain stuck at a higher level.
On the 12th local time, The Wall Street Journal (WSJ) reported that in its own survey of 72 economists conducted from June 2 to 7, respondents forecast U.S. economic growth this year at 2.1%, up from an April estimate of 2%, based on changes in Gross Domestic Product (GDP) that reflect inflation from the fourth quarter of last year through this year.
The average probability of a recession within the next 12 months fell to 25% from 33% in April, the lowest level since early 2025.
Economists also expect employment to rise by about 65,000 jobs per month on average over the next year, higher than the previous forecast of 45,000.
As for oil prices, they were expected to move mostly sideways, with crude likely to end December at around $70 per barrel.
However, economists predicted that the Consumer Price Index (CPI) would rise 3.4% over the 12 months from January to December this year, slightly above the 3.2% forecast in April's survey.
The Personal Consumption Expenditures Price Index, excluding food and energy and closely watched by the Federal Reserve when setting monetary policy, was also projected to rise 3.2% this year. That is up from the 2.9% forecast in April.
On the possibility of interest rate hikes by the Federal Reserve, economists expected the central bank to keep rates unchanged through December, mostly within the current range of 3.5% to 3.75%.
whywani@fnnews.com Hong Chaewan Reporter