Wolters Kluwer's Blue Chip Economic Indicators Panelists See Lower Probability of Recession

NEW YORK, Feb. 20, 2020 /PRNewswire/ -- Panelists for the latest Wolters Kluwer's Blue Chip Economic Indicators found that while worry over a U.S. recession has diminished somewhat, the economy is continuing to experience a slowdown in overall growth.

Current estimates of the probability of a U.S. recession remain elevated at 28.6 percent during the coming 12 months. Four months ago, the average probability was 39 percent for 2020 and 41 percent for 2021. While the probability of a recession has declined, the Blue Chip panelists indicated that they expect the U.S. economy's growth to slow down to 1.9 percent this year, followed by 2.0 percent in 2021. Growth in the first quarter of 2020 is forecast to be 1.6 percent, followed by a slight pick-up to a 1.9 to 2.0 percent pace in succeeding quarters.

The Wolters Kluwer Blue Chip panelists also indicated concerns around economic growth globally, most notably around issues concerning China.

"While the trade dispute with China remains the greatest risk to the economy, panelists also raised other risks, with the majority of panelists specifically noting the coronavirus now known as COVID-19," said Joseph Aguinaldo, executive editor of Wolters Kluwer's Blue Chip Economic Indicators. "It is hard to quantify the effect of the outbreak on a country's employment, GDP or other economic measures but it is clearly a concern for the panelists. In fact, the Blue Chip panel estimates that COVID-19 will cut by 0.7 percentage point China's economic growth and reduce global growth by 0.2 percentage point in 2020."

Other consensus forecasts from this issue of Wolters Kluwer's Blue Chip Economic Indicators include:

• Consumer spending was up just 1.8 percent in Q4 2019, but is expected to improve in view of strong labor market.
• The overall PCE will be up 1.8 percent this year and 2.0 percent in 2021 and the core PCE will be up 1.9 percent this year and 2.0 percent in 2021. Target inflation rate is 2.0 percent.
• There will be no move on the federal funds rate this year. The next move could be next year or even later, but the panelists indicated a split opinion on the direction of the next move, with 56 percent expecting an easing and 44 percent a tightening.
• China's economic growth forecast is 5.7 percent in 2020, and 6.1 percent in 2021; 5.7 percent would be the slowest full-year growth since 3.9 percent in 1990.
• Panelists forecast very weak German GDP growth, but no recession, with 0.7 percent in 2020 following 0.6 percent in 2019.

About Wolters Kluwer's Blue Chip Economic Indicators
Established in 1976, Wolters Kluwer's Blue Chip Economic Indicators is synonymous with the latest in expert opinion on the future performance of the U.S. economy, presenting the forecasts of 50 economists from the nation's largest and most respected manufacturers, banks, insurance companies, and brokerage firms. The newsletter compiles the experts' individual and combined forecasts for the current and following year for variables including, but not limited to, real GDP, consumer price index, industrial production, real disposable personal income, pre-tax corporate profits, unemployment rates and real net exports.

For more information on Wolters Kluwer's Blue Chip Economic Indicators please visit https://lrus.wolterskluwer.com/store/blue-chip-publications/.

About Wolters Kluwer Legal & Regulatory U.S.
Wolters Kluwer (WKL) is a global leader in professional information, software solutions, and services for the healthcare; tax and accounting; governance, risk and compliance; and legal and regulatory sectors. We help our customers make critical decisions every day by providing expert solutions that combine deep domain knowledge with advanced technology and services.

Wolters Kluwer reported 2018 annual revenues of ?4.3 billion. The group serves customers in over 180 countries, maintains operations in over 40 countries, and employs approximately 19,000 people worldwide. The company is headquartered in Alphen aan den Rijn, the Netherlands.

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Media
Linda Gharib
Director, Communications
Wolters Kluwer Legal & Regulatory U.S.
Tel: +1 (646) 887-7962
Email: [email protected] 

SOURCE Wolters Kluwer Legal & Regulatory U.S.