NABE Outlook Survey - June 2016


NABE Panel Tempers GDP Outlook, Forecasts Healthy Job Prospects, and Expects Inflation to Remain Modest 

The June 2016 NABE Outlook presents the consensus of macroeconomic forecasts from a panel of 48 professional forecasters (see last page for listing). The survey, covering the outlook for 2016 and 2017, was conducted between May 2-17, 2016. The NABE Outlook Survey originated in 1965 and is one of three surveys conducted by NABE; the others are the NABE Business Conditions Survey and the NABE Economic Policy Survey. Founded in 1959, the National Association for Business Economics (NABE) is the professional association for those who use economics in their work. NABE has over 2,600 members and 42 chapters nationwide. Thomas Kevin Swift, CBE, American Chemistry Council (chair); Steve Cochrane, CBE, Moody's Analytics; Gregory Daco, Oxford Economics; Jack Kleinhenz, CBE, National Retail Federation; and John Silvia, CBE, Wells Fargo, 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.

“The June NABE Outlook Survey marks the third consecutive markdown of 2016 real GDP growth by respondents,” according to NABE President Lisa Emsbo-Mattingly, CBE, director of research, Global Asset Allocation at Fidelity Investments. “Panelists now foresee economic growth of only 1.8% in 2016, a decline from the 2.2% advance forecasted in the March 2016 survey. Nearly 60% of the panel views uncertainty surrounding the upcoming election as damaging to GDP growth in 2016.”

“More broadly, nearly four out of ten survey participants view the rise of nationalist views around the world as the most important factor likely to constrain economic growth over the next two years,” noted Gregory Daco, head of U.S. Macroeconomics, Oxford Economics USA. “NABE panelists expect the Federal Reserve to raise its federal funds target rate two more times this year but no longer expect one of those rate hikes to occur in June," added John Silvia, CBE, chief economist at Wells Fargo. “The end-of-year Fed funds targets for both 2016 and 2017 have been lowered slightly.”

“As in the March survey, the panel expects house prices to appreciate 5% in 2016,” noted Steve Cochrane, CBE, managing director at Moody's Analytics. “The current outlook for 2017 is for appreciation to slow to 4.3%, which is slightly higher than the 4% rate projected in March.” 


  • The panel's median forecast for growth in inflation-adjusted gross domestic product (real GDP) from the fourth quarter of 2015 to the fourth quarter of 2016 (Q4/Q4) decreased by 0.6 percentage point to 1.9% since the March survey. The forecasted annualized growth rate for 2016 has also inched downward to 1.8% in the current survey from 2.2% in March. The median 2017 outlook calls for 2.3% average annual growth.
  • A significant share of panelists believes that low oil prices had a positive effect on U.S. economic growth in 2015, but the difference between those holding that view and those feeling the opposite (low oil prices have a negative impact) is only two percentage points (39% positive vs. 37% negative). The margin between the two views widens to 49% positive and 18% negative for 2016, and 55% to 7% for 2017. Of those respondents providing an estimate of any additional contribution to real GDP growth, the median for each of the three years is 0.2 percentage point.
  • Lower oil prices have also affected the panel’s outlook for economic growth in Canada and Mexico. Survey responses reflect a median forecast of real GDP growth of 1.6% in 2016 for Canada, an increase from the 1.2% actual gain in 2015. Panelists expect a median gain of 2.1% in 2017. The median forecast for Mexico’s real GDP is 2.5% in 2016, identical to the actual gain in 2015. Panelists look for a median gain of 2.8% in 2017. 

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