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NABE Panel Foresees Economic Growth Revving Up Through 2018

March 26, 2018, 07:05 AM
Filed Under: Economic Commentary

The NABE March 2018 Outlook Survey report projects economic growth to pick up this year. The survey, covering the outlook for 2018 and 2019, presents the consensus of macroeconomic forecasts from a panel of 51 professional forecasters, and was conducted between Feb. 28-March 7.

“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,” said NABE Vice President Kevin Swift, CBE, chief economist, American Chemistry Council. “The panel’s median forecast for average annual real gross domestic product (GDP) growth in 2018 is 2.9 percent, up from 2.5 percent in the December survey. In addition, 76 percent of panelists believe that risks are weighted to the upside.”

“In large part, the increase in growth prospects appears related to federal fiscal policies,” added survey chair David Altig, executive vice president and director of research, Federal Reserve Bank of Atlanta. “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 outlook for inflation remains modest,” Altig said. “Overall, panelists expect that inflation, as measured by the personal consumption expenditures (PCE) price index, will increase by 1.9 percent from the fourth quarter of 2017 to the fourth quarter of 2018 (Q4/Q4), up just a tick from the December forecast of 1.8 percent. The Q4/Q4 median inflation forecast for 2019 is also 1.9 percent.

“Relative to the December survey results, panelists have downgraded the probability of a recession occurring by the end of 2018,” noted Altig. “Slightly less than 7 percent of respondents put the probability of a recession this year at greater than 25 percent, compared to the 12 percent who held this view in December. The top three downside risks cited by panelists are a stronger dollar, weak wage growth, and inflation.”


  • The median forecasts for growth in inflation-adjusted GDP (real GDP) are 2.9 percent between the fourth quarter of 2017 and 2018 Q4, and 2.5 percent between Q4 2018 and Q4 2019. The forecast for 2017-2018 represents an upward revision from the 2.4 percent in the December 2017 Outlook Survey. On an annual basis, the median real GDP growth forecast for 2018 is also 2.9 percent, compared with 2.5 percent in the December survey. Overall, the panel expects economic growth in 2018 to be significantly stronger than the 2.3 percent annual GDP growth rate in 2017. The panel’s median forecast for average annual GDP growth in 2019 is 2.7 percent, 0.2 percentage points less than in 2018.
  • Seventy-six percent of panelists believe the balance of risks to the economy through 2018 is weighted to the upside, while 20 percent believe the balance of risks is weighted to the downside. The risk assessment has strengthened since the December survey, in which 60 percent of panelists believed the risks were on the upside, compared to 33 percent who believed risks were on the downside. The panel ranks the top three downside risks to the economy as a strong dollar, weak wage growth, and inflation. The top three upside risks are corporate tax reform, individual income tax cuts, and stronger global growth.

The full summary can be viewed here.

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