Economy expected to accelerate, survey shows
But growth not likely to be as fast as Trump hopes, economists say.
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