The October 2017 Wall Street Journal Economic Forecast Survey was published on October 12, 2017. The headline is “Economists See GOP Tax Plan Producing Growth Spurt, But Split Over Long-Term Effect.”
I found numerous items to be notable – although I don’t necessarily agree with them – both within the article and in the “Economist Q&A” section.
An overwhelming majority of forecasters in The Wall Street Journal’s monthly survey of economists said the GOP tax plan unveiled last month would, if implemented, raise the growth rate for U.S. gross domestic product over the next two years. Some 60% saw a modest lift to output compared with its current trend, while 27% said the annual growth rate would jump by more than half a percentage point.
The announced framework, which lacks some details and could change as lawmakers flesh it out in the coming weeks, features lower tax rates on corporate profits, incentives for business investment and fewer individual income tax brackets, among other changes.
But roughly half of the economists said any growth spurt would fade over time. Asked about the tax plan’s likely effect on the economy’s long-run growth rate, 48% predicted a modest increase while 38% said the U.S. would remain on its current trajectory. Just 4% said the tax plan would boost the GDP growth rate by more than 0.5 percentage point a year, while 10% said growth would be slower than if there had been no tax changes.
As for the federal budget deficit, 85% of economists said the GOP tax plan would cause it to widen over the next decade.
As seen in the “Recession Probability” section, the average response as to the odds of another recession starting within the next 12 months was 15.85%. The individual estimates, of those who responded, ranged from 0% to 33%. For reference, the average response in September’s survey was 16.08%.
As stated in the article, the survey’s respondents were 59 academic, financial and business economists. Not every economist answered every question. The survey was conducted October 6-10.
The current average forecasts among economists polled include the following:
full-year 2017: 2.3%
full-year 2018: 2.4%
full-year 2019: 2.0%
December 2017: 4.2%
December 2018: 4.0%
December 2019: 4.1%
10-Year Treasury Yield:
December 2017: 2.46%
December 2018: 3.00%
December 2019: 3.30%
Please Note – The above is excerpted from the EconomicGreenfield.com (published by RevSD, LLC) post of October 12, 2017, titled “The October 2017 Wall Street Journal Economic Forecast Survey”
RevSD, LLC offers the above commentary for informational purposes only, and does not necessarily agree with the views expressed by these outside parties.
RevSD, LLC is a management consulting firm and strategic advisory that focuses on the analysis of current and future weak(ening) economic conditions, and offers businesses and other entities advice, strategies, and actionable methods on how to optimally adapt to such challenging, complex conditions.