U.S. economists more pessimistic, citing trade as major risk

Washington, United States (AFP) — Economists have become more concerned about US growth prospects, citing trade friction as the major worry, but recession risks have receded slightly, according to a survey released Monday.

Nearly half of the panel surveyed by the National Association for Business Economics (NABE) expect a recession before the end of next year, down from 60 percent in the prior survey.

The panel expects the world’s largest economy to slow, with growth falling below 2 percent for the first time since 2016, the survey showed.

Recent data have shown the US labor market remains strong, but manufacturing is in recession while the larger services sector is slowing, giving rise to fears about the health of the US economy, especially amid President Donald Trump’s grinding trade war with China and increasing tensions with Europe.

The NABE panel “turned decidedly more pessimistic about the outlook over the summer, with 80 percent of participants viewing risks to the outlook as tilted to the downside,” said Gregory Daco, the group’s survey chair and chief US economist at Oxford Economics.