Economist Recession Odds Tick Lower

May 12, 2008

Hickey and Walters (Bespoke) submit:

Bloomberg’s monthly survey of economists was released on
Friday, and the collective odds for a recession over the next 12 months
dropped to 55% from 70% in April. Below we provide a chart of
recession odds from the monthly Bloomberg economist survey versus the Intrade contract for a recession in 2008 going back to the start of the year.

The Intrade contract most recently traded at 27.3, which is down
from a reading of 72.9 last month. It’s noteworthy that the recession
has to occur in 2008 for the Intrade contract, while it’s over the next
12 months for the economist survey. But it still highlights that
economists and traders have both become more skeptical of an actual
recession, with traders more so than economists.

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