America’s economic growth won’t break out into the robust 3 percent level predicted by President Donald Trump anytime soon, according to the latest survey of nearly four dozen economists by the National Association for Business Economics.
U.S. economic growth will stay stuck in the low 2 percent range in 2017 and 2018, the NABE survey found, USA Today reported.
"Panelists continue to expect action by Congress and the Trump administration on both tax reform and infrastructure spending before the end of 2018, although the majorities holding these views are smaller than in the June survey," Kevin Swift, vice president-elect of the NABE, said in a statement accompanying the report.
The economy's estimated trajectory was unchanged from NABE's last survey in June, with economists still expecting the economy to grow 2.2% in 2017 and 2.4% next year. That's down from the latest reading of 3 percent growth in the second quarter of this year, CNBC explained.
Late last month in a speech on the economy in Missouri, Trump returned to an argument he has made many times before: The change in gross domestic product under his predecessor was abysmal, and he would fix it, The Washingont Post reported.
“In the last 10 years, our economy has grown at only around 2 percent a year,” Trump said. “We were hitting 1 percent just a number of months ago. So we’re going to change that around, folks, that I can tell you. And we’re going to change it around fast. And today, a very appropriate day that this should happen, we just announced that we hit 3 percent in GDP. Just came out. And on a yearly basis, as you know, the last administration, during an eight-year period, never hit 3 percent. So we’re really on our way.”
Trump pledged on the campaign trail that the economy would grow at 4 percent annually on his watch, the Post explained.
Although the economy has been picked up steam in recent quarters, "the weak start to the year is expected to hold the average annual GDP growth rate in 2017 to 2.2%," said Swift, who is chief economist and managing director for the American Chemistry Council.
"Panelists continue to believe that a recession is unlikely in the next two years," NABE said in a statement.
The economists placed a 25% or less probability of recession this year and nearly three out of four economists estimated the same low odds of recession an economic slowdown in 2018.
Meanwhile, the Federal Reserve is on track to gradually raise interest rates given the recent inflation weakness is fading and the U.S. economy’s fundamentals are sound, an influential Fed policymaker said on Monday, reinforcing the central bank’s confident tone.
New York Fed President William Dudley, among the first U.S. central bankers to speak publicly since a decision last week to hold rates steady for now, cited the soft dollar and strong overseas growth among the reasons he expects slightly above-average U.S. economic activity and a long-sought rise in wages, Reuters reported.
“With a firmer import price trend and the fading of effects from a number of temporary, idiosyncratic factors, I expect inflation will rise and stabilize around the (Fed‘s) 2 percent objective over the medium term,” he told students and professors at Onondaga Community College.
“In response, the Federal Reserve will likely continue to remove monetary policy accommodation gradually,” added Dudley, a close ally of Fed Chair Janet Yellen and a permanent voter on monetary policy.
Dudley’s comments were similar to his speech earlier this month, and reinforced the growing expectation that the Fed is set to raise rates for a third time this year in December. That notion was driven home by Fed forecasts published last week, when the central bank held rates but announced the beginning of a long process of shedding bonds it accumulated to boost the economy.
Still, others at the Fed are less anxious to tighten policy in the face of price readings that have sagged since February, despite strong jobs growth. Futures traders give a December rate hike about a 55-percent probability, according to Reuters data.
For its part, the Atlanta Fed's GDPNow model forecast for real GDP growth (seasonally adjusted annual rate) in the third quarter of 2017 was 2.2 percent on September 19, unchanged from September 15.
(Newsmax wires services contributed to this report).
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