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Economists have grown more upbeat about the US economy, citing stronger job growth, easing inflation, and a reduced risk of recession, The Wall Street Journal reported July 12.
The findings come from the WSJ’s latest quarterly survey, conducted July 3-8, which polled 69 economists from across Wall Street banks, universities, and small consulting firms.
Compared with WSJ’s April survey, the July 12 results reflect a notable rebound in economic sentiment, which is partly due to President Donald Trump’s decision to pause some threatened tariffs. The previous survey, the WSJ noted, took place “at the height of the president’s threats to impose eye-watering tariffs on America’s biggest trading partners.”
“Despite numerous headwinds, the U.S. economy is proving stubbornly resilient,” Chad Moutray, chief economist at the National Restaurant Association, said, according to the WSJ report. “Consumers are continuing to spend, but the mood has clearly shifted from bold to careful.”
Economists now expect the gross domestic product adjusted for inflation to grow 1% in the fourth quarter — up from April’s 0.8% projection, though still below January’s expectations. They placed the chance of recession at 33% within the next 12 months. The average projection is down from 45% in April but higher than the 22% at the start of the year.
The report highlighted that job growth has outpaced expectations, averaging at 150,000 jobs per month in the past three months. The unemployment rate dropped slightly to 4.1% in June from 4.2% in May.
“Perhaps most important,” the WSJ reported, “the tariff-driven inflation spike that economists widely predicted hasn’t materialized.”
Core consumer prices rose just 2.8% in May from a year earlier. While still above the Federal Reserve’s 2% target, the WSJ pointed out that this increase is “the lowest in four years.”
The WSJ also noted that several of Trump’s policies — including new tariff threats issued last week, intensified immigration enforcement, and the recently signed “Big Beautiful Bill” — may take time to ripple through the economy.
Economists expect the “Big Beautiful Bill” legislation to boost economic growth by 0.2 and 0.3 percentage points in 2025 and 2026, respectively. However, according to WSJ, they see “steeped-up deportations and decreased immigration fully offsetting that.”
