The U.S. economy is on track for 1.8% growth in 2020, according to the economists at Securities Industry and Financial Markets Association, a trade group representing Wall Street securities firms, banks and asset management companies.
For 2019, the final GDP number probably will come in at 2.2%, according to the median forecast in a SIFMA survey of member economists. The 2019 estimate is up 5 basis points from SIFMA’s June survey, and the 2020 forecast is down 10 basis points.
“Despite the markdown in 2020 GDP growth, the economy is still expected to expand at a moderate pace,” said Ellen Zentner, a managing director and chief U.S. economist for Morgan Stanley, and chair of SIFMA’s Economic Advisory Roundtable. “When gauging risks to the outlook, it is of no surprise that trade, global growth and U.S. political uncertainty appeared among the top risks – both to the up and downside.”
Washington and Beijing announced earlier this month a “phase one” trade agreement. On Tuesday, President Donald Trump said he expects a deal to be signed next month in a formal ceremony.
“We will be having a signing ceremony,” Trump said to reporters in Florida, where he is spending a two-week vacation at Mar-a-Lago. “We will ultimately, yes, when we get together. And we’ll be having a quicker signing because we want to get it done.”
SIFMA economists put the chance of a 2020 recession at 25%, unchanged from the June survey.
Workers will see a 3.2% increase in average hourly earnings in 2020, on the heels of a 3.1% gain in 2019, according to the median estimate in the survey.
Inflation should remain muted in 2020, according to the survey, with a gain of 2.2% in the Federal Reserve’s preferred gauge known as “core PCE.” That’s the government’s measure of Personal Consumption Expenditures minus volatile food and energy prices.