Trump Teams Growth Forecasts Far Rosier Than Those of CBO, Private Economists
WASHINGTON—The Trump administration has drafted preliminary economic growth forecasts in its federal budget planning that rely on assumptions that are far rosier than projections made by independent agencies and most private forecasters, according to several people familiar with the discussions.
The forecasts are being revised, these people said, following an internal debate. One concern is that pressing staff economists to produce aggressive forecasts might undercut the credibility of top appointees forced to later defend those numbers.
The deliberations show the challenge the administration faces as it tries to reconcile the competing goals of cutting taxes, boosting military and infrastructure spending, preserving Medicare and Social Security programs and keeping budget deficits from soaring.
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The forecasts, which were initiated before President Donald Trump took office, project gross domestic product—a broad measure of national output of goods and services—growing between 3% and 3.5% a year over the coming decade, with inflation-adjusted annual growth ultimately settling at around 3.2% during the later years of the 10-year forecast.
The economy has grown around 2% on average over the past decade. Many economists believe sustained growth at more than 3% will be difficult to achieve without a sharp rebound in productivity growth and a reversal in the slowing expansion of the U.S. labor force, developments few are projecting. Worker productivity growth has slowed to 0.7% a year since 2010, a sharp slowdown from rates exceeding 3% in the late
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https://www.wsj.com/articles/trump-teams-growth-forecasts-far-rosier-than-those-of-cbo-private-economists-1487356278
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