Reference News website reported on April 15 that according to a report from the Wall Street Journal website on April 12, what changes will three months bring? Since Donald Trump became the President of the United States, economists have significantly reduced their expectations for U.S. economic growth and simultaneously raised their inflation rate and unemployment rate forecasts.

The quarterly survey conducted by the Wall Street Journal shows that respondents believe the main reason is tariffs.

During the period from January 10 to 14, when the Wall Street Journal last surveyed economists, they were uncertain about many of Trump's policies, including tariffs, immigration restrictions, and tax cuts. However, they had to weigh this uncertainty, as the U.S. economy has consistently performed better than expected.

The shift in economists' views reflects the fact that Trump is pushing his trade policy with a force that was almost unimaginable three months ago.

This survey, conducted from April 4 to 8, received responses from 64 academic and business economists.

The survey shows that economists on average expect the seasonally adjusted U.S. GDP to grow only 0.8% year-over-year in the fourth quarter. This is lower than the 2% GDP growth forecast in January. If this prediction proves accurate, it would be the worst performance of the U.S. economy since 2020.

The economists also increased their estimated probability of a recession over the next year from 22% in January to 45%.

Joseph Davis, chief economist at Vanguard, said, "We are on the brink of a recession."

Since the outbreak of the trade war on April 2, the U.S. stock market has been under pressure, and bond yields have risen. A survey released by the University of Michigan on April 11 showed that consumer confidence in the U.S. plummeted to one of its lowest levels in 10 years, and household inflation expectations reached their highest level since the early 1980s.

Predicting the economy always involves a significant amount of guesswork. The last time the Wall Street Journal's survey showed economists estimating the likelihood of an economic recession at such a high level was throughout most of 2022 and 2023, and their guesses turned out to be completely wrong.

But the uncertainty is particularly high now because Trump's tariff policies are unpredictable, and his goal is to quickly reshape the complex global supply chain system that has been formed over decades.

The survey reflects this unpredictability, with economists' estimates for GDP growth in 2025 having an unusually wide range.

Economist Amy Cruz Katz expects a 2% contraction in the U.S. economy due to falling consumer and business confidence, and evidence provided by her clients indicates that the latest tariff policies have caused supply chain problems. However, James Smith of EconForecaster expects a 3.1% growth in the U.S. economy because he believes Trump will soon cancel all newly imposed tariffs, as these tariffs are really "outrageous."

Economists Matthew Finap and Dan Hamilton from California Lutheran University expect the U.S. economy to grow by 0.8%, consistent with the economists' average expectation. They stated that their prediction for economic growth is based on the assumption that the tariff rates will be significantly reduced on "Liberation Day."

In general, economists expect the average U.S. tariff rate in 2025 to rise by approximately 19 percentage points. In January, they expected an increase of 10 percentage points.

Economists predict that Trump's latest tariff measures will reduce the 2025 GDP growth by 1.2 percentage points and raise the inflation rate by 1.1 percentage points.

Given this, economists currently expect the year-over-year increase in the U.S. Consumer Price Index (CPI) in December 2025 to reach 3.6%, higher than the 2.7% forecast in January. (Translated by Xu Yanhong)

On March 28, customers shop at a supermarket in New York City, USA. (Photo by Guo Ke)

Original article: https://www.toutiao.com/article/7493511205068210700/

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