74% of econ­o­mists in sur­vey see U.S. re­ces­sion by end of 2021

The Saline Courier - - NEWS -

WASH­ING­TON — A strong ma­jor­ity, 74%, of U.S. busi­ness econ­o­mists ap­pear suf­fi­ciently con­cerned about the risks of some of Pres­i­dent Don­ald Trump’s eco­nomic poli­cies that they ex­pect a re­ces­sion in the U.S. by the end of 2021.

The econ­o­mists sur­veyed by the Na­tional As­so­ci­a­tion for Busi­ness Eco­nom­ics, in a re­port re­leased Mon­day, mostly didn’t 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 per­cent of the econ­o­mists sur­veyed said they be­lieve a slow­ing econ­omy will tip into re­ces­sion in 2021. That’s up from 25% in the Fe­bru­ary sur­vey.

An­other 38% of those polled pre­dicted that re­ces­sion will oc­cur next year, down slightly from 42% in Fe­bru­ary. Only 2% of those polled ex­pect a re­ces­sion to be­gin this year.

In Fe­bru­ary, 77% of the econ­o­mists ex­pected a re­ces­sion ei­ther this year, next year or in 2021.

A strong econ­omy is key to the Repub­li­can pres­i­dent’s 2020 re-elec­tion prospects. Con­sumer con­fi­dence has dropped 6.4% since July.

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 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.”

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 Aug. 1 — be­fore the fi­nan­cial mar­kets last week sig­naled the pos­si­bil­ity of a U.S. re­ces­sion. Stock mar­kets around the world shud­dered as the White House an­nounced

10% tar­iffs on an ad­di­tional $300 bil­lion of Chi­nese im­ports, the Chi­nese cur­rency dipped be­low the seven-yuan-to-$1 level for the first time in 11 years and the Trump ad­min­is­tra­tion for­mally la­beled 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 Trump ad­min­is­tra­tion has im­posed tar­iffs on goods from many key U.S. trad­ing part­ners, from China and Europe to Mex­ico and Canada.

Of­fi­cials main­tain that the tar­iffs, which are taxes on im­ports, will help the ad­min­is­tra­tion gain more fa­vor­able terms of trade. But U.S. trad­ing part­ners have sim­ply re­tal­i­ated with tar­iffs of their own.

Trade be­tween the U.S. and China, the two big­gest global economies, has plunged. Trump de­cided last Wed­nes­day to post­pone un­til Dec. 15 tar­iffs on about 60% of an ad­di­tional $300 bil­lion of Chi­nese im­ports, grant­ing a re­prieve from a planned move that would have ex­tended du­ties to nearly ev­ery­thing the U.S. buys from China.

The econ­o­mists sur­veyed by the NABE were skep­ti­cal about prospects for suc­cess of the lat­est round of U.s.china trade ne­go­ti­a­tions. Only 5% pre­dicted that a com­pre­hen­sive trade deal would re­sult, 64% sug­gested a su­per­fi­cial agree­ment was pos­si­ble and nearly

25% ex­pected noth­ing to be agreed upon by the two coun­tries.

As a whole, the busi­ness econ­o­mists’ re­cent re­sponses have rep­re­sented a re­buke of the Trump ad­min­is­tra­tion’s over­all ap­proach to the econ­omy.

Still, for now, most eco­nomic signs ap­pear solid. Em­ploy­ers are adding jobs at a steady pace, the un­em­ploy­ment rate re­mains near a 50-year low and con­sumers are op­ti­mistic.

U.S. re­tail sales fig­ures out last Thurs­day showed that they jumped in July by the most in four months.

The sur­vey showed a steep de­cline in the per­cent­age of econ­o­mists who found the $1.5 tril­lion in tax cuts over the next decade “too stim­u­la­tive” and likely to pro­duce higher bud­get deficits that should be reduced, to 51% cur­rently from 71% in Au­gust 2018.

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