Question

How would the current government shutdown impact the forecast for US gross domestic product growth for the years 2019 and 2020?

Answer 1

As economists crunch the numbers for their 2019 forecasts, on the other hand, they are supposing a slowdown. According to Goldman U.S. GDP growth will slow to 1.8% in the third quarter of 2019 and to 1.6% during the fourth quarter. A survey of economists by Reuters shows that most of them expect the chance of a recession in the U.S. Although, it is still low at 35%, the survey also showed that the median probability of a recession has inched up from 30% in the past month. Bernard Baumohl, chief global economist at the Economic Outlook Group LLC doesn’t forecast a recession in 2019 and estimates a one-in-three chance of a slump in 2020. Likewise, a separate Bloomberg survey earlier this month showed economists raised the probability of a recession in the next 12 months to 25 percent. Economists at Macroeconomic Advisors have lowered their forecast for economic growth by a scant 0.1 percentage point for the first quarter of 2019—to a solid 2.7 percent annual rate for the January-March period. Bank of America Merrill Lynch economists said they may have to trim their first-quarter (2019) estimate of 2.2. S&P Global economists predict a government shutdown if it began early in the quarter, would shave about 0.2 percentage points.