Economists see recession coming, so maybe it’s not

ECONOMISTS tend to think in small incremental steps, missing big turns in the story, which helps explain why their consensus view had not forecast a single US recession since records began in 1970 — until now.

For the first time, economists as a group not only expect a recession in America in the next year, but give it a very high probability, more than 60 per cent. Given their record, it’s worth asking whether the consensus is, in fact, unlikely.

With inflation at four-decade highs and central banks raising rates aggressively and in a way that has seldom been so well telegraphed, a recession does seem inevitable. Still, as John Maynard Keynes once warned, “the inevitable never happens and the unexpected constantly occurs”.