74% of economists see US recession by end of 2021
ASTRONG majority, 74 per cent, of United States business economists appear sufficiently concerned about the risks of some of President Donald Trump’s economic policies that they expect a recession in the United States by the end of 2021.
The economists surveyed by the National Association for Business Economics (NABE), in a report released on Monday mostly did not share Trump’s optimistic outlook for the economy, though they generally saw recession coming later than they did in a survey taken in February. Thirty-four per cent of the economists surveyed said they believed that a slowing economy would tip into recession in 2021. That is up from 25 per cent in the February survey.
An additional 38 per cent of those polled predicted that recession would occur next year, down slightly from 42 per cent in February. Another 2 per cent of those polled expect a recession to begin this year.
In February, 77 per cent of the economists expected a recession either this year, next year, or in 2021.
Trump has dismissed concerns about a recession, offering an optimistic outlook for the economy after last week’s steep drop in the financial markets. He said on Sunday: “I don’t think we’re having a recession. We’re doing tremendously well. Our consumers are rich. I gave a tremendous tax cut, and they’re loaded up with money.”
Still, Trump on Monday called on the US Federal Reserve to cut interest rates by at least a full percentage point “over a fairly short period of time”, saying that would make the US economy even better and would quickly boost the flagging global economy.
In two tweets, Trump kept up his pressure on the politically independent Fed and its chairman, Jerome Powell, whom he chose to lead the Fed, asserting that the US economy was strong “despite the horrendous lack of vision by Jay Powell and the Fed.
While the economists in the NABE survey generally saw
recession coming later than they had in February, the latest survey was taken between July 14 and August 1 – before the financial markets last week signalled the possibility of a US recession, sending the Dow Jones Industrial Average into its biggest one-day drop of the year. Stock markets around the world shuddered as the White House announced 10 per cent tariffs on an additional US$300 billion of Chinese imports, the Chinese currency dipped below the seven-yuan-to-US$1 level for the first time in 11 years, and the Trump administration formally labelled China a currency manipulator.
The 226 economists responding work mainly for corporations and trade associations.
The economists have previously expressed concern that Trump’s tariffs and higher budget deficits could eventually dampen the economy.
The economists surveyed by the NABE were sceptical about prospects for success of the latest round of US-China trade negotiations. Only 5 per cent predicted that a comprehensive trade deal would result.