(ABM FN-Dow Jones) The U.S. could enter recession over the next 12 months as the Federal Reserve attempts aggressive rate hikes to keep inflation down. A new survey of economists by the Wall Street Journal revealed this weekend.

The probability of a recession in the next 12 months is now rated at 63 percent by respondents. It was 49 percent in July. It was the first time since July 2020 that economists who completed the survey estimated the probability of a recession above 50 percent.

Expectations for a recession have risen as respondents believe the central bank’s rate hikes will not be without economic consequences. Nearly 59 percent now believe the Fed will raise interest rates too much and cause unnecessary economic weakness. It was 46 percent in July.

The outlook for 2023 is also bleak, according to the Wall Street Journal. Economists expect U.S. gross domestic product to contract in the first two quarters of next year, from where growth was forecast in July.

Economists forecast the U.S. economy to contract by 0.2 percent in the first quarter of 2023 and by 0.1 percent in the second quarter. Three months ago, growth was expected to be 0.8 percent in the first three months of next year and 1.0 percent in the next quarter.

Workers are expected to shed jobs in the second and third quarters of next year due to economic slowdowns and weak corporate earnings, with economists forecasting 34,000 and 38,000 job losses in those two quarters, respectively. Earlier, job growth of 65,000 per month was expected during the period.

Source: ABM Financial News