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34% of Economists See 2021 Recession   08/19 06:07

   A number of U.S. business economists appear sufficiently concerned about the 
risks of some of President Donald Trump's economic policies that they expect a 
recession in the U.S. by the end of 2021.

   WASHINGTON (AP) -- A number of U.S. business economists appear sufficiently 
concerned about the risks of some of President Donald Trump's economic policies 
that they expect a recession in the U.S. by the end of 2021.

   Thirty-four percent of economists surveyed by the National Association for 
Business Economics, in a report being released Monday, said they believe a 
slowing economy will tip into recession in 2021. That's up from 25% in a survey 
taken in February. Only 2% of those polled expect a recession to begin this 
year, while 38% predict that it will occur in 2020.

   Trump, however, has dismissed concerns about a recession, offering an 
optimistic outlook for the economy after last week's steep drop in the 
financial markets and saying on Sunday, "I don't think we're having a 
recession." A strong economy is key to the Republican president's 2020 
reelection prospects.

   The economists have previously expressed concern that Trump's tariffs and 
higher budget deficits could eventually dampen the economy.

   The Trump administration has imposed tariffs on goods from many key U.S. 
trading partners, from China and Europe to Mexico and Canada. Officials 
maintain that the tariffs, which are taxes on imports, will help the 
administration gain more favorable terms of trade. But U.S. trading partners 
have simply retaliated with tariffs of their own.

   Trade between the U.S. and China, the two biggest global economies, has 
plunged. Trump decided last Wednesday to postpone until Dec. 15 tariffs on 
about 60% of an additional $300 billion of Chinese imports, granting a reprieve 
from a planned move that would have extended duties to nearly everything the 
U.S. buys from China.

   The financial markets last week signaled the possibility of a U.S. 
recession, adding to concerns over the ongoing trade tensions and word from 
Britain and Germany that their economies are shrinking.

   The economists surveyed by the NABE were skeptical about prospects for 
success of the latest round of U.S.-China trade negotiations. Only 5% predicted 
that a comprehensive trade deal would result, 64% suggested a superficial 
agreement was possible and nearly 25% expected nothing to be agreed upon by the 
two countries.

   The 226 respondents, who work mainly for corporations and trade 
associations, were surveyed between July 14 and Aug. 1. That was before the 
White House announced 10% tariffs on the additional $300 billion of Chinese 
imports, the Chinese currency dipped below the seven-yuan-to-$1 level for the 
first time in 11 years and the Trump administration formally labeled China a 
currency manipulator.

   As a whole, the business economists' recent responses have represented a 
rebuke of the Trump administration's overall approach to the economy.

   Still, for now, most economic signs appear solid. Employers are adding jobs 
at a steady pace, the unemployment rate remains near a 50-year low and 
consumers are optimistic. U.S. retail sales figures out last Thursday showed 
that they jumped in July by the most in four months.

   The survey showed a steep decline in the percentage of economists who found 
the $1.5 trillion in tax cuts over the next decade "too stimulative" and likely 
to produce higher budget deficits that should be reduced, to 51% currently from 
71% in August 2018.


(KR)

 
 
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