The National Association for Business Economics’ NABE Outlook is among the most carefully watched forecasts for economic growth. Its December survey shows that those questioned say a recession next year is highly unlikely. And the group revised most of its predictions for GDP improvement upward.
The survey includes a group of 51 professional forecasters. It was taken between November 6 and 15, 2017, and includes opinions on this year and next.
The primary finding from the research was:
The median forecasts for average annual inflation-adjusted gross domestic product growth (real GDP growth) are 2.2% for 2017 and 2.5% for 2018—compared with 2.2% and 2.4% in the September survey. On a fourth-quarter-to-fourth-quarter basis, real GDP growth is expected to be 2.5% in 2017 and 2.4% in 2018. The median forecast for fourth-quarter 2017 real GDP growth is 2.7%, higher than the September forecast of 2.5%.
Among the main reasons are that tax cuts will stimulate the economy. The NABE is not the only group with such a forecast. Obviously, congressional supporters of a bill to cut taxes, as well as President Trump, view the results the same way. Ironically, the group surveyed said inflation would be low, not a normal set of circumstances during a recovery. The personal consumption expenditures (PCE) price index is expected to rise by 1.6% this quarter compared to the fourth quarter in 2016. The number for 2018 is expected to be 1.8%.
And a recession is not in the cards over the course of the next year. NABE Vice President Kevin Swift, CBE, chief economist, American Chemistry Council, said:
Panelists continue to believe that a recession is unlikely in 2018. Only 7% of respondents believe the peak of the current business cycle will occur by the end of next year. The survey panel is more optimistic about the risks to the economy than it was in September. Sixty percent of panelists believe the balance of risks to the economy through 2018 is weighted to the upside, while 33% believe the risks are weighted to the downside. In the September survey, the downside risks outweighed the upside risks by a margin of 48% to 43%.
It is hard to imagine things being much better, at least in terms of the economy.