More than three-quarters (75%) of economists surveyed say they expect the U.S. economy to fall into recession by the end of 2021.
Furthermore, of the economists surveyed, 10% said they expect a recession in the U.S. to start this year, while 42% project one next year (2020), and 25% forecast an economic contraction starting in 2021.
The results come from the semi-annual National Association for Business Economics survey, which was carried out between January 30 and February 8 and polled nearly 300 member economists. Yet, despite the dire predictions of a recession for the world’s largest economy, a majority of economists still expect the U.S. Federal Reserve to continue raising interest rates this year.
The projections come ahead of the Commerce Department’s release this week of the advance reading for fourth-quarter Gross Domestic Product (GDP), which was delayed by the government shutdown in Washington, D.C. Economists surveyed by Bloomberg projected that growth cooled to a 2.5% annualized rate in the final months of 2018 from 3.4% in the third quarter of last year.
U.S. President Donald Trump’s trade policies remained a concern for most of the economists surveyed. In all, 36% said the existing tariffs, if they remain in place, will reduce 2019 GDP growth by 25 basis points, while 26% saw a drag of 50 basis points and 15% of panelists expect the reduction to exceed 50 basis points. Economists also said they expected the tariffs to boost inflation this year.
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