While the omnibus spending bill is still making political waves in Washington, business economists like what they are seeing in current fiscal policy. The latest survey from the National Association for Business Economics found a substantial boost in growth projections, thanks in large part to the tax cuts and increased spending passed by Congress.
Here's the summary from NABE vice president, Kevin Swift: “NABE Outlook panelists are more optimistic about the U.S. economy in 2018 than they were three months ago, especially regarding prospects for the industrial sector of the economy. The panel’s median forecast for average annual real gross domestic product (GDP) growth in 2018 is 2.9%, up from 2.5% in the December survey. In addition, 76% of panelists believe that risks are weighted to the upside.”
The survey's chair, David Altig of the Federal Reserve Bank of Atlanta, added, “In large part, the increase in growth prospects appears related to federal fiscal policies. The median estimate of the impact on real GDP growth resulting from fiscal policy changes is an increase of 0.45 percentage points in 2018, and 0.3 percentage points in 2019."
The NABE panelists see a reduced probability of recession, and said the outlook for inflation remains "modest."