Economists surveyed by the National Association for Business Economics raised slightly their growth projections for the US economy in 2018, the association announced today. The median forecast calls for real GDP growth of 2.9% on an annual basis this year, up from the June 2018 estimate of 2.8%. Panelists also increased their forecast for nonfarm employment growth.

“Despite concerns over trade policy, NABE Outlook panelists are slightly more optimistic about the US economy in 2018 than they were three months ago, especially regarding prospects for the industrial sector of the economy,” said Kevin Swift, VP at NABE and chief economist at American Chemistry Council. “Other indicators of real economic activity show light vehicle sales remaining elevated and housing continuing to improve.”

“Trade issues are clearly influencing panelists’ views,” added Survey Chair David Altig, executive VP and director of research at the Federal Reserve Bank of Atlanta. Half of survey respondents have moderately increased their inflation forecasts as a result of trade policy changes. More than half of the survey respondents indicated they had reduced their GDP growth forecasts for 2018 and nearly 80% did so for 2019. “Nonetheless, the percentage of panelists expecting a recession in 2019 fell relative to that in the June survey,” Altig said. “One-third of respondents expect that we will not see a recession until 2021 or later.”

Panelists also now forecast nonfarm payroll growth to average 210,000 jobs per month in 2018, up from 192,000 in the June survey. However, panelists forecast a decline to 162,000 jobs per month in 2019.

The average unemployment rate for 2018 as a whole is expected to be at its current 3.9% level, unchanged from two prior forecasts. On a quarterly basis, the median forecast reflects a slight decline to 3.8% in the third quarter of 2018 and 3.7% in the fourth quarter, before settling at 3.6% in the last three quarters of 2019.

The median forecast for hourly compensation growth in 2018 rose to 3.0% from 2.8% in the June survey, but remains lower than the 3.4% actual increase in 2017. Wage compensation is expected to firm further in 2019 to a 3.2% annual average growth rate in 2019, 0.2 percentage points higher than the projection in the June survey.

NABE is a professional association for business economists and others who use economics in the workplace. The survey included 51 professional forecasters and was conducted between Aug. 28 and Sept. 17, 2018.