• Economists place the odds of a recession this year at around 40% — the lowest since January 2022, a new Bloomberg survey found.
  • Respondents lifted their forecasts for GDP, consumer spending, private investment, and government expenditures compared to a survey last month.
  • They expect unemployment to peak at 4.1% later this year, down from the 4.2% seen last survey.

Economists are feeling more optimistic about the US economy.

In a new Bloomberg survey, economists place the odds of a recession this year at around 40% — the lowest since January 2022.

Those hopes of dodging a downturn largely rest on the strength of the job market and robust spending. The respondents lifted their forecasts for GDP, consumer spending, private investment, and government expenditures compared to a survey last month.

This story is available exclusively to Business Insider subscribers. Become an Insider and start reading now.

The 72 surveyed conomists expect year-over-year consumer spending to grow about 1.9% as opposed to the 1.5% forecasted last month. GDP outlook rose to 2.1% compared to 1.5% in the last survey.

As for the labor market, economists now see unemployment peaking at 4.1% later this year instead of the 4.2% predicted last month. They also expect employers to add more jobs to the economy through 2026.

Recent data has already been promising. Consumer spending last month came in hot, rising 0.7% year-over-year. GDP growth also beat expectations in the fourth-quarter last year, notching an annualized growth rate of 3.3%, above the expected 2%. Further, the unemployment rate sits near historically low levels, at 3.7%.

Surveyed economists had placed a 65% chance the economy tipped into a downturn back in early 2023, but the picture has dramatically changed since then.