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U.S. Tax Cuts Seen Giving Modest Growth Boost, Survey Shows

Posted December 04, 2017

Under Economic Issues, International Trade Issues

(Andrew Mayeda – Bloomberg)

Fiscal stimulus, including large Republican-backed tax cuts, will deliver a modest boost to the U.S. economy in the next two years, although many economists also expect a recession to start during that time, according to a new survey.

About half of economists say fiscal policy changes will augment U.S. growth by 0.2 to 0.39 percentage point in 2018, according to a survey of 51 forecasters by the National Association for Business Economics conducted Nov. 6-15. About one-fifth project a bigger gain and another fifth see no benefit to growth. [...]

Even with the bump, a slight majority anticipates a recession beginning sometime before the end of 2019, with most of that group seeing a business-cycle peak in the second half of that year. That compares with 48 percent who see the expansion running through at least 2020. Economists were most likely to cite trade protectionism as a top risk to expansion, followed by a substantial stock-market decline and higher interest rates. Click here to read more.

Related: NABE Outlook Survey – December 2017