White House says Trump will drive a US economic boom lasting 10 years, a prediction virtually no serious economists agree with
- President Trump's closest economic advisors are predicting a long term boom in the US economy as a direct result of his policies, a forecast wildly out of sync with most economists.
- The Council of Economic Advisers predicts growth over the next decade of around 2.8% annually, compared to the Federal Reserve's forecast of just 1.9% long-run growth.
- In 2019, the CEA expects 3.2% growth, while economists from Goldman Sachs and other banks say it will be nearer 2%.
- Many in the US fear a recession in 2020 or 2021, but the CEA does not.
President Trump's closest economic advisors are predicting a US economic boom lasting at least a decade, as a direct result of his policies.
The forecast goes against the majority of mainstream economic forecasters, who instead expect slowing growth in the coming years.
According to an Associated Press report, which cites the annual Economic Report of the President, written by the White House Council of Economic Advisors (CEA), the US economy will grow at a rate of 3% or more in each of the coming five years.
GDP growth will hit 3.2% in 2019, the report said. By 2029, growth will remain at around 2.8%, it added.
Both the CEA's near-term and longer-term forecasts are significantly out of step with other major economic forecasters, including other parts of the US government.
For 2019, the Congressional Budget Office, a non-partisan body, forecasts US growth at 2.7%, while the Federal Reserve has growth expectations at just 2.3% this year. A discrepancy this large is remarkable.
Economists at major banks hold similar views, with Swiss giant UBS predicting 2.4% growth, and Goldman Sachs expecting just 2.0%.
In terms of long-run growth, the Federal Reserve expects a figure of around 1.9%, well below the CEA's forecasts for the next decade.
The Council of Economic Advisors' very optimistic economic forecasts come at a time when fears abound that the US economy could be headed into a recession in the next one or two years.
Earlier in March, the UCLA Anderson Forecast, a well-known bellweather economic report suggested that the US economy will slow to recessionary levels in the next year, while a survey from the National Association for Business Economics (NABE) showed that 77% of economists forecast a recession by 2021.
The CEA said it based its forecasts on the assumption that all legislation put forward by the Trump administration will be passed.
Kevin Hassett, the chairman of the council, defended the predictions, saying: "It's our job, it's our statutory responsibility, to assume that the president's policies become law and show people what happens and document it."
The report cited numerous perceived economic successes in 2018 as proof Trump's economic policies are working, noting in particular that 6 million workers got bonuses after the president imposed tax cuts.
"We demonstrate that these departures from the recent trend are not accidental but rather reflect the Trump Administration's deliberate measures to create and maintain conditions under which the U.S. economy can achieve maximum employment, production, and purchasing power," it said, according to a CNBC report.