ACC survey of economic forecasters: mixed, but generally positive for 2023

Via the American Chemistry Council's Weekly Chemistry and Economic Trends report, this survey of economic forecasters: 

• The outlook for 2022 continued to weaken with ongoing inflationary pressures, disruptions related to the  war in Ukraine, and aggressive tightening of monetary policy by the Federal Reserve.
• Expectations into 2023 were also lower for many indicators compared to a month ago.
• U.S. GDP is expected to grow by 2.6% in 2022 as the highest inflation in decades erodes spending and higher interest rates raise borrowing costs. In 2023, forecasters continue to expect the U.S. economy to grow by 1.8%, a pace below its long-term trend.
• Consumer spending is expected to increase by 3.1% in 2022 before slowing further to a 1.7% gain in 2023.
• Business fixed investment will be a larger contributor to GDP growth in 2022 with an expected 5.4% gain. In 2023, growth in business investment is expected to slow to a 3.1% Y/Y pace.
• Industrial production is expected to rise 5.1% in 2022 (as manufacturing continues its momentum and oil & gas activity expands) and 1.9% in 2023.
• With continued supply chain challenges for vehicle manufacturers, expectations for light vehicle sales were lowered again to 14.8 million in 2022 and rising to 16.1 million in 2023. 
• Expectations for housing starts were the same compared to last month at 1.65 million in 2022 but lowered to 1.55 million in 2023. 
• The unemployment rate is expected to average 3.6% in 2022 and 3.8% in 2023.
• Inflation continues to accelerate through mid-year. Expectations for gains in consumer prices continued to grow compared to our mid-year outlook with forecasters looking for inflation of 7.6% in 2022, before easing to a 3.6% pace in 2023, as constraints ease. 
• Compared to last month, expectations for interest rates (10-year Treasury) continued to move higher for 2022, as the Fed implements aggressive tightening. 
• Following the Russian invasion of Ukraine and Covid lockdowns in China, forecasters have downgraded their expectations for the global economy. Global GDP is expected to rise by 3.2% in 2022 and 2023. Global industrial production, hampered by ongoing supply chain challenges in addition to the disruptions from Chinese lockdowns and the war in Ukraine, will rise 3.9% in 2022 and 3.6% in 2023.
• In addition to ongoing supply chain challenges, slower growth in global GDP and industrial production will be reflected in softer projections for global trade. Following a 10.4% rebound in 2021, global trade volumes are expected to rise by 3.6% in 2022 and 3.2% in 2023, both lower than previously expected. 

According to this, there is no prediction for a "technical" recession for 2022 or 2023 (i.e. two consecutive quarters of negative GDP growth), this is broadly good news. Either way, I would continue to expect a slowing of hiring (i.e. less torrid than 2021), but still generally a good environment for job seekers. This will be important to watch, especially as the Fed continues to respond to inflation with additional (?) rate increases... 

ACC: Weekly Chemistry and Economic Trends

Via the American Chemistry Council, their weekly report of economic trends: 

Employment

Nonfarm payrolls grew by 390,000 in May, the smallest monthly gain since April 2021. Notable job gains were in leisure and hospitality, professional and business services and transportation and warehousing. Employment in retail trade declined. Employment remains below pre-Covid levels by 822,000. Manufacturing payrolls grew by 18,000, the 13th month of consecutive monthly gains. Average hourly wages for non-supervisory and production workers grew by 6.5% Y/Y to $27.33, the slowest annual pace since December. The labor force grew and most new entrants moved into the ranks of the employed. The participation rate ticked up to 60.1%, tying March for the highest rate since the pandemic began. The unemployment rate remained steady for a third month at 3.6%. 

Chemical industry employment 

Chemical industry employment (including pharmaceuticals) rose by 3,700 (0.4%) in May as gains in production workers offset a decline in supervisory and non-production workers. Compared to a year ago, chemical industry employment was up by 27,400 (3.2% Y/Y). Average hourly wages in chemical manufacturing rose 1.4% Y/Y to $27.12. The average workweek expanded by ½ hour to 41.2 hours. Combined with employment gains, the labor input into the chemical industry was up 2.2% which was consistent with the ISM Manufacturing PMI report that suggested the chemical industry experienced moderate-to-strong growth in May. 

Chemical shipments

Within the details of the ISM Manufacturing PMI report, chemical products was listed as one of the industries reporting moderate-to-strong growth in May. Chemical industry respondents reported growth in new orders, higher  inventories, increased employment growth, new export orders, and imports and paying higher prices for raw materials in May. They reported no change in order backlogs, that customer inventories were “too low” and slower supplier deliveries reflecting continued obstacles across the supply chain, with labor and through the transportation and distribution network. One plastics and rubber products respondent provided a comment: “Price increases haven’t let up. I thought 2022 was going to be better, but it hasn’t been. Shortages (among other issues) are disrupting the supply chain.” 

Mostly good news, it seems.