The Trump administration's plans to overhaul the tax system and spend big on infrastructure would give the U.S. economy a boost — but the measures aren't likely to happen this year, according to a national survey of business economists.
Roughly 4 in 5 members polled by the National Association for Business Economics said they don't expect to see an infrastructure spending package enacted until next year or later. Nearly 3 in 5 said they don't expect to see a tax reform package before next year.
Overall, the group expects the pace of growth in gross domestic product to pick up later this year, peaking at 3.1 percent in the third quarter, before easing back a bit. But their forecast calls for 2.2 percent growth for all of 2017 and 2.4 percent for all of next year.
That's roughly in line with the latest estimates from the Federal Reserve, but lower than the Trump administration's long-term annual growth target of 3 percent or better.
In its latest budget proposal, the White House has hedged that goal a bit, projecting economic growth of 2.3 percent this year, gradually rising over the next few years before hitting 3 percent in 2020.
Overall, the group doesn't see a recession on the near-term horizon. More than 90 percent pegged the odds of a recession this year at less than 25 percent, and nearly 80 percent giving the same recession odds for next year.
The June NABE Outlook surveyed 52 professional economic forecasters between May 2 and May 16.
The NABE economists also expect the Federal Reserve to continue raising short term interest rates, boosting the mid-point of the federal funds rate to 1.375 percent by the end of this year, and to 2.125 percent by the end of 2018. Their outlook for long-term rates by the end of the year, as pegged by the 10-year Treasury bond, ticked down to 2.75 percent from their 2.82 percent forecast in March.
The group also sees the pace of hiring slowing a bit, falling to an average of 178,000 job monthly gains, down from its 183,000-a-month forecast in March. The NABE economists see the unemployment rate falling to an average of 4.5 percent this year, down a bit from their March forecast of 4.6 percent. The May rate was 4.3 percent, the Labor Department reported on Friday.
They also expect inflation to perk up a bit this year, with the consumer price index gaining 2.4 percent, up from 1.3 percent last year.
And they expect hourly wages to grow by 3.1 percent for all of this year, up from last year's 2.9 percent gain.
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