Recession in 2019? Here's what economists are predicting
Economic growth could slow later this year, yet there isn't likely to be a recession in the U.S. within the next 12 months, a majority of business economists said in a new study. The economists also said President Donald Trump's economic policies haven't done much to influence their plans.
Almost two-thirds of respondents in a survey by the National Association for Business Economics think the economy will keep growing this year in what would become the longest expansion on record in U.S. history at more than 10 years. A recession is marked by a decline in economic activity, pushing GDP growth into negative economic growth.
Still, the survey results being released Monday reflect a collective belief that some of the economy's momentum is fading. Compared with the NABE's previous survey in October, for example, a smaller proportion of economists said their companies' sales were rising. And fewer expect profit growth to increase. Corporate investments in new equipment has also cooled.
"A large majority of respondents—84%—indicate that one year after its passage, the 2017 Tax Cuts and Jobs Act has not caused their firms to change hiring or investment plans," NABE President Kevin Swift said in a statement.
Trump: Little influence
Most of the economists say President Donald Trump's economic policies have done little to affect their businesses' plans. An overwhelming majority — 84 percent — say Trump's 2017 tax cuts, which sharply reduced the burden on corporations, failed to influence their companies' hiring or investment outlooks. A nearly equal proportion of respondents (77 percent) indicated that Trump's trade policies haven't affected their companies' plans for hiring, pricing or investment.
The results fit a broader pattern. The economy appears to be slowing as a dose of stimulus from Trump's tax cuts has been fading. Job growth has been steady, but the stock market has stumbled and global growth has deteriorated.
Home sales have weakened, and 2019 began with a blast of nervous uncertainty as the federal government endured what became a 35-day partial shutdown.
Most analysts estimate that the 35-day partial shutdown shaved a few tenths of a percentage point from annual economic growth in the first three month of 2019. They say growth should pick up in the coming months, though some of the money federal workers and contractors didn't spend in the past five weeks — on such items as movie tickets, restaurants and travel — will never be made up.
Having gone without two paychecks, many federal workers were forced to visit food banks or to borrow money.
The NABE survey, which has been conducted quarterly since 1982, was based on responses from 106 economists who are employed by companies or industry trade associations.