Washington: 74% of U.S. business economists are expecting a recession in America by the end of 2021. The economists are concerned about the risks of some of the economic policies of President Donald Trump.
The economists surveyed by the National Association for Business Economics, in a report released on 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 per cent 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. An additional 38% of those polled predicted that recession will occur next year, down slightly from 42% in February. Another 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.
Read more:Donald Trump acknowledges China policies may mean US economic pain
Trump has dismissed concerns about a recession, offering an optimistic outlook for the economy after last week's steep drop in the financial markets. 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 U.S. economy even better and would quickly boost the flagging global economy.
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 signalled the possibility of a U.S. recession, sending the Dow Jones Industrial Average into its biggest one-day drop of the year.
The economists have previously expressed concern that Trump's tariffs and higher budget deficits could eventually dampen the economy.
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.
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 USD 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.
