Recession at least a year away, economists now say

Economics is known as the dismal science, but forecasters aren’t so dismal now: Most think a recession is still at least a year away.

If there is one at all.

Some 71% of Wall Street
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economists believe the odds of a downturn in the next 12 months is 50% or less. So says the National Association of Business Economists in its latest quarterly survey.

“A majority of panelists is more confident about the economy over the next year, as they see the probability of a recession diminishing,” said Carlos Herrera, chief economist at Coca-Cola North America and chairman of the NABE survey.

Why the change of heart? Not that long ago, most economists thought a downturn was likely this year.

Read: Are we still going to have a recession? Maybe next year.

Economists say sales at most businesses continue to rise, supported by steady consumer spending. A series of increases in U.S. interest rates by the Federal Reserve have done little to put the brakes on growth.

The rate of inflation, meanwhile, continued to ease and businesses got some relief from rising wages, the survey found.

A big key is whether the Fed will be done raising interest rates soon. The central bank is widely expected to raise rates again this week, but financial markets believe it might be the final hike this year.

Higher borrowing costs typically slow the economy and often lead to recession, but rates aren’t especially high in either inflation-adjusted terms or historically.

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