Real GDP growth in the United States will slow to 2.4% in 2019, down from 2.9% in 2018, according to the latest quarterly outlook survey from the National Association for Business Economics (NABE).
Since NABE’s last quarterly outlook was published in December, almost three quarters (72%) of the economists surveyed in the March 2019 NABE Outlook lowered their growth forecasts for 2019, citing U.S. trade policy and slower global growth as the primary causes for concern.
Further, 74% of respondents said the risks to the economy in the year ahead are weighted to the downside, only 6% said the risks are weighted to the upside and the remaining 20% said the risks are balanced.
The report predicts GDP growth will slow to 2.1% in the fourth quarter of 2019, and hit 1.9% in the fourth quarter of 2020. In spite of these projections, respondents did not expect to see the U.S. in recession in the near future.
“Panellists put the odds of a recession starting in 2019 at around 20%, and the odds of a recession by the end of 2020 at 35%,” survey chair Gregory Daco, chief U.S. economist, Oxford Economics, said in a statement. “In part, this reflects the Federal Reserve’s dovish policy U-turn in January. A near-majority of panellists anticipates only one more interest rate hike in this cycle compared to the three hikes forecasted in the December survey.”
The survey also found that 60% of respondents had lowered their forecasts for business investment in 2019 due to U.S. trade policy, while only 40% had lowered their forecasts for personal consumption expenditures. More than half (58%) said U.S. trade policy would have no impact on their forecasts for personal consumption expenditures.