WASHINGTON — A strong majority, 74 percent, of US business economists appear sufficiently concerned about the risks of some of President Donald Trump’s economic policies that they expect a recession in the US 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 percent in the February survey.
Another 38 percent of those polled predicted that recession will occur next year, down slightly from 42 percent in February. Only 2 percent of those polled expect a recession to begin this year.
In February, 77 percent 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 percent 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.”
Still, Trump on Monday called on the Federal Reserve to cut interest rates by at least a full percentage point “over a fairly short period of time,” saying that would make the US economy even better and would quickly boost the flagging global economy.
In two tweets, Trump kept up his pressure on the politically independent Fed and its chairman Jerome Powell, whom he chose to lead the Fed, asserting the US economy was strong “despite the horrendous lack of vision by Jay Powell and the Fed.”
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 US recession, sending the Dow Jones Industrial Average into its biggest one-day drop of the year.
The 226 economists responding work mainly for corporations and trade associations.
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. US 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 percent currently from 71 percent in August 2018.