Economist sees faster growth with new tax cuts, stimulus
Trump’s plans expected to boost corporate profits
With tax cuts and other stimulus measures on the way, the U.S. economy will continue its long-running expansion at a faster pace, the chief economist for JPMorgan Chase & Co. said Thursday.
Speaking at a Wisconsin Bankers Association event in Madison, Anthony Chan said he expects the economy to grow at a rate of 2.2% this year, followed by 2.5% or higher in 2018. He estimated 2016’s final growth rate will come in at 1.6%.
“The U.S. economy has come through a long struggle from the global financial crisis, but we have made it,” Chan told about 500 gathered for the organization’s annual Economic Forecast Luncheon. “We have basically had an economic expansion that has now lasted close to eight years — it’s now well into its eighth year — and with all this fiscal stimulus that’s coming I strongly believe we’re going to see another great year in 2017.”
Chan cited, for example, an expected lowering of the corporate tax rate to probably 20% from the current 30%, which he said would raise corporate profits 10% or 11% more than currently projected.
“So I think we all, whether we voted for (Presidentelect Donald Trump) or not, have to be excited about the fact that moving forward, corporate profits are going
U.S. services companies grew again in December during the holiday season. The Institute for Supply Management, a trade organization of purchasing managers, said Thursday that its services index came in at 57.2 in December, matching the November figure. It was the strongest reading since October 2015. Anything above 50 signals growth. The services industry has now grown for 83 straight months. The strength in December reflected in part a strong gain in new orders which rose to a 16-month high of 61.6. The survey said that 11 industries, led by entertainment and recreation and retail trade, reported increased business activity in December. Four industries, including educational services and public administration, reported decreased activity during the month.