Econ­omy ex­pected to ac­cel­er­ate, sur­vey shows

But growth not likely to be as fast as Trump hopes, econ­o­mists say.

Austin American-Statesman - - BUSINESS - Econ­o­mists Stocks

U.S. eco­nomic growth is ex­pected to ac­cel­er­ate this year and next, yet re­main mod­est, even if Pres­i­dent Trump’s promised tax cuts and in­fra­struc­ture spend­ing are im­ple­mented, a sur­vey found.

The econ­omy will grow a solid 2.3 per­cent this year and 2.5 per­cent in 2018, ac­cord­ing to 50 econ­o­mists sur­veyed by the Na­tional As­so­ci­a­tion for Busi­ness Eco­nom­ics. Those rates would be up from 2016’s ane­mic pace of 1.6 per­cent.

Still, those rates are be­low the 3 per­cent to 4 per­cent growth that Trump has promised to bring about through steep cor­po­rate and in­di­vid­ual tax cuts and more spend­ing on roads, air­ports and tun­nels.

Most of the econ­o­mists sur­veyed as­sume that a tax re­form pack­age will be ap­proved by Congress this year. About two-fifths ex­pect an in­fra­struc­ture spend­ing pro­posal to pass this year, while rest fore­cast it will hap­pen in 2018 or be­yond.

The sur­vey also found that 70 per­cent of econ­o­mists think fi­nan­cial mar­kets are too op­ti­mistic about the im­pact of Trump’s pro­pos­als, should they be en­acted.

The S&P 500 stock in­dex has risen about 6.5 per­cent since the pres­i­den­tial elec­tion on an­tic­i­pa­tion of faster growth stem­ming from Trump’s poli­cies. Shares slipped last week as Congress and the Trump ad­min­is­tra­tion failed to agree on a health care pro­posal to re­place the Obama ad­min­is­tra­tion’s Af­ford­able Care Act.

The econ­o­mists sur­veyed work for com­pa­nies, trade as­so­ci­a­tions and in academia. The re­sults were com­piled by Ti­mothy Gill, an econ­o­mist at the Amer­i­can Iron and Steel In­sti­tute; Steve Cochrane, an econ­o­mist at Moody’s An­a­lyt­ics; and David Te­o­lis at Gen­eral Mo­tors, among oth­ers.

The sur­vey found econ­o­mists more op­ti­mistic about hir­ing than they were in a pre­vi­ous sur­vey, con­ducted in De­cem­ber. They now fore­cast em­ploy­ers will add an av­er­age of 183,000 jobs a month this year, up from their ear­lier fore­cast of 168,000.

The new fig­ure is roughly in line with last year’s av­er­age of 187,000.

Wor­ries that Wash­ing­ton might not be able to help busi­nesses as much as once thought knocked stock in­dexes down early Mon­day, but they bounced back in the af­ter­noon and ended the day mixed.

The Stan­dard & Poor’s 500 in­dex fell 2.39 points, or 0.1 per­cent, to 2,341.59 for its sev­enth drop in the past eight days. The Dow Jones in­dus­trial av­er­age closed down 45.74, or 0.2 per­cent, to 20,550.98, while the Nas­daq com­pos­ite in­dex rose 11.63, or 0.2 per­cent, to 5,840.37.

When trad­ing opened for the day, it looked as if losses would be worse. The S&P 500 sank from the start and was down as much as 0.9 per­cent.

The weak­ness fol­lowed last week’s fail­ure by Repub­li­cans to re­peal the Af­ford­able Care Act, some­thing they’ve been pledg­ing to do for years, which raised doubts that Wash­ing­ton can push through prom­ises to

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