I have raised the outlook for 2018 by 0.3 percentage points to 3.0% after the tax reform was finalized. The adjustment is mainly a reflection of increased consumption growth, while the net export contribution is turning negative and the trade deficit is set to increase further.


I expect increased labor participation and strong growth in productivity to keep the unemployment rate around 4%. That should also limit the effect on wages and inflation. I expect Federal Reserve to hike interest rates four times in 2018. Tax reform and the added stimulus has lowered the risk of recession in the short run, but increased the risk of a major financial correction.



US economic update after tax reform


Related documents

US 2018 outlook (October 2017)

Tax reform is here