NABE Outlook Survey

February 2022

NABE Panel Sees Inflation Playing Key Role in Risk to Economic Outlook;
Nearly Two-thirds of Panelists Say Risks to Growth are Tilted to the Downside



The February 2022 NABE Outlook presents the consensus macroeconomic forecast of a panel of 57 professional forecasters (see last page for listing). The survey, covering the outlook for 2022 and 2023, was conducted February 7-15, 2022. The NABE Outlook Survey originated in 1965, and is one of three surveys conducted by the National Association for Business Economics (NABE); the others are the NABE Business Conditions Survey and the NABE Economic Policy Survey. Founded in 1959, the National Association for Business Economics is the professional association for those who use economics in their work. NABE has over 3,000 members and 44 chapters nationwide. Yelena Shulyatyeva (Chair) Bloomberg; Jack Kleinhenz, CBE, National Retail Federation; Brent Meyer, Federal Reserve Bank of Atlanta; Kathleen Navin, CBE, IHS Markit; Dana Peterson, The Conference Board; Sara Rutledge, SRR Consulting; and Robert Rosener, Morgan Stanley, conducted the analysis of survey responses for this report. The views expressed in this report are those of the panelists, and do not necessarily represent the views of their affiliated companies or institutions. This report may be reproduced in whole or in part with appropriate citation to NABE.


SUMMARY: “NABE Outlook Survey panelists' projections for inflation in 2022 are significantly higher than those in the December 2021 survey,” said NABE President David Altig, executive vice president and director of research, Federal Reserve Bank of Atlanta. “They see a risk that inflation will remain higher than previously expected over the next three years, coming largely from the labor market. More than two-thirds of survey respondents cite rising wages as a risk factor.”

“Nearly two-thirds of the panelists indicate risks to U.S. economic growth are tilted to the downside this year,” added Survey Chair Yelena Shulyatyeva, senior U.S. economist, Bloomberg. “Thirty percent identify monetary policy missteps as the greatest downside risk. Seventy-seven percent of panelists suggest a wage price spiral is either already occurring or will be a major risk in 2022.”




- NABE panelists have downgraded their forecasts for economic growth in 2022. The median forecast for inflation-adjusted gross domestic product (real GDP) growth from the fourth quarter (Q4) 2021 to Q4 2022 is 2.9%—down from the 3.6% forecasted in the December 2021 Outlook Survey. In general, panelists anticipate further deceleration in GDP growth in 2023: the median forecast calls for GDP growth of 2.3%.

- Thirty percent of panelists identify monetary policy missteps as the greatest downside risk. One-quarter (25%) sees ongoing supply-chain issues and 19% cite geopolitical tensions/global growth slowdown as the most prominent downside risks to their growth projection (considering both probability of occurrence and potential impact).


- The median projection for monthly nonfarm payroll employment growth in 2022 is 317,000. That is approximately 6% lower than the 337,000 jobs forecasted in the December 2021 survey. The panel anticipates that net hiring in 2023 will soften; the median forecast calls for 170,000 net new jobs per month in 2023. The median projection for monthly nonfarm payrolls reflects a slowdown from a pace of 432,000 in Q1 2022 to 225,000 in Q4 2022. The pace of job growth is forecasted to again decline gradually over the course of 2023, averaging 150,000 monthly payrolls in Q4 2023.

- More than three-quarters of the panel indicate that a wage price spiral is either already occurring (30%) or that it is a major risk in 2022 (47%). Fifteen percent do not believe it is a concern, while six percent expect it to be mitigated by a significant increase in productivity growth.

Prices and Interest Rates

- The panel’s projections for the total and core personal consumption expenditures (PCE) price indexes have risen from those in the December survey. The core PCE price index is now expected to rise 3.2% y/y in Q4 2022, compared to an increase of 2.6% forecasted in December. The panel sees core PCE inflation moderating next year to a 2.2% y/y rate, falling to just slightly above the Federal Reserve’s 2% target. Almost half (46%) of respondents anticipates that the core PCE gauge will not decline to or below the Federal Reserve’s target until 2024 or later.

- Consistent with rising inflation expectations, projections for federal funds target rate hikes have also increased from those in the December survey. The median forecast for end-of-year 2022 is 1.125%, up from a median of 0.375% forecasted in the December survey. The median rate for end-of-year 2023 is 1.875%.