Wolters Kluwer's Blue Chip Economic Indicators Panelists Anticipate Comprehensive Tax Reform Legislation in 2017

NEW YORK, Feb. 15, 2017

This month's report suggests that, while the Trump Administration's pledges of tax cuts, infrastructure spending and regulatory relief have propelled consumer and business confidence to multi-year highs and lifted U.S. equity indices to record levels, panelists remain reluctant to significantly alter their forecasts of U.S. economic performance for 2017 and 2018. The report also notes that securing congressional passage of major tax reform and infrastructure-related legislation is expected to be fractious and time consuming, and that there is considerable opposition to inclusion of a border adjustment (effectively a 20 percent tax on all imports).

"The consensus anticipates comprehensive tax reform legislation, but fewer than one third of panelists believe that a border adjustment component will be included as part of any tax reform that is approved," said Randell E. Moore, executive editor of Wolters Kluwer's Blue Chip Economic Indicators.

The consensus indicates that U.S. economic growth in 2017 and 2018 will be somewhat stronger than last year. Real GDP growth is predicted to grow 2.3 percent this year and 2.4 percent in 2018, compared to 1.6 percent in 2016.

Other consensus findings from this issue of Wolters Kluwer's Blue Chip Economic Indicators exclusive survey include:

• About three-quarters of the panelists expect Congress to approve some sort of infrastructure investment plan in 2017, but more than 80 percent of the panelists believe that any increase in infrastructure investment over the next few years will prove to be "moderate" or "modest".
  
• The Federal Reserve is expected to enact two or three 25-basis-point hikes in interest rates this year. 65 percent of the panelists believe the Fed will hold off until its June meeting to raise rates for the first time in 2017.
  
• About 21 percent of the panelists say they are "very worried" that increased protectionism is a threat to the U.S. economy, while almost 40 percent say they are "moderately worried".

About Wolters Kluwer's Blue Chip Economic Indicators
Established in 1976, Wolters Kluwer's Blue Chip Economic Indicators has become synonymous with the latest in expert opinion on the future performance of the U.S. economy by presenting the forecasts of 50 economists from the nation's largest and most respected manufacturers, banks, insurance companies, and brokerage firms. The newsletter compiles the experts' individual and combined forecasts for the current and following year for variables including, but not limited to, real GDP, consumer price index, industrial production, real disposable personal income, pre-tax corporate profits, unemployment rates and real net exports.