Economists Raise U.S. Growth Forecasts, Lower Recession Odds in Near Term

New York, NY, July 18, 2025-Economists have become more optimistic about the U.S. economy’s near-term performance, according to the latest Wall Street Journal quarterly survey. 

While concerns about trade policy and inflation previously fueled recession fears, the July 3-8 survey of 69 economists showed a brighter outlook for the second quarter, with reduced expectations of a downturn and a stronger forecast for gross domestic product (GDP) growth. The probability of a recession in the next 12 months dropped to 33%, down from 45% in April, though still higher than January’s 22%.

The revised GDP projection for the second quarter now stands at an annualized 2.2%, a significant improvement from the 0.8% forecast in April. Economists attributed the change to stronger-than-expected data on employment, inflation, and consumer resilience. However, experts like Gregory Daco of EY-Parthenon cautioned that downside risks remain, with many forecasters warning of continued economic challenges and possible weakness over the longer term.

Despite the upgraded short-term outlook, economists remain cautious about the rest of 2025. Their forecasts for GDP growth in the final two quarters of the year only slightly exceed 1%, suggesting that while a recession may not be imminent, momentum is expected to slow.