Last year, the economy surged to new heights as the stock market broke countless records, unemployment reached record lows, and the overall economy expanded. The growth has continued into 2018. But whose leadership led it there? President Donald Trump's or the leftover fruits of the Obama administration? According to the Wall Street Journal, the answer is clear.
What did the experts say?
The Wall Street Journal recently surveyed 68 academic, business and financial economists and found who they believe is most likely responsible for the booming economy. According to the Journal, “most” said Trump and his election are at least partially responsible for the growth.
Compared to what they said about Obama in 2017, here’s what the experts said:
- The majority of economists surveyed said Trump is "somewhat or strongly positive for job creation, gross domestic product growth and the stock market.” They gave Obama “mixed” marks on job creation and low marks on GDP growth.
- Regarding long-term growth potential, the economists gave Trump "neutral or positive” marks while they gave Obama overwhelmingly “negative” marks. They said Obama’s regulations "came at a cost to economic growth.” Obama’s lack of innovation also earned him very negative marks.
- The economists cited Trump's tax reform bill and his actions to cut regulations as very positive influences on the economy.
- The economists also cited Trump's actions on taxes and regulations as being very helpful for businesses, which in turn benefits the economy as a whole.
Chad Moutray, chief economist at the National Association of Manufacturers, told the Journal: "There is definitely a sense in the business community that the president’s actions on taxes and regulations have led to a more pro-growth environment for them to operate."
But other experts weren't as high on Trump's actions. Bernard Baumohl of the Economic Outlook Group expressed caution over giving Trump "too much credit for the economy’s strength."
"Job creation and business capital spending were on the rise prior to his presidency. The jury is still out how much more his actions moved the economy forward," he explained.
The experts told the Journal that they were most enthusiastic about the tax reform bill. More than 90 percent of the economists told the paper that the tax cuts would increase GDP growth over the next two years. According to the Washington Examiner, more than 160 companies have given their employees bonuses or wage increases directly citing the tax bill as the impetus.
What is the outlook for 2018?
That outlook leads economists to believe 2018 will be another great year. From the Journal:
On average, the forecasters predicted GDP would expand a healthy 2.7% this year. They saw the unemployment rate, which was 4.1% in December, falling to 3.9% by midyear and 3.8% in December. The pace of hiring was expected to slow further, with monthly nonfarm payroll gains set to average 165,000 in 2018. Monthly job gains averaged 171,000 in 2017 and 187,000 in 2016, according to the Labor Department.
The probability of a recession in the next 12 months ticked down in January to 13%, the lowest average since September 2015. More than two-thirds of forecasters said they saw the risks to the growth outlook as tilted to the upside.