November 23, 2017
    Economists: Fiscal policy uncertainty receding but still a concern

    Approval by business economists of the nation’s fiscal policy grew markedly since 2013, but a majority still see uncertainty as a a block to economic recovery. This is the finding of the National Association of Business Economists’ 2014 Economic Policy Survey.

    Meanwhile, associations executives are more optimistic than ever before about the national economy, according to the TRENDS 2014 Spring Association PULSE Survey.

    According to the NABE survey, “While there is no clear consensus on current fiscal policy, the share expressing approval has increased markedly to 42 percent compared to just 31 percent one year ago. Over this same period, the panel’s approval of Federal Reserve policy has edged downward,” said NABE president Jack Kleinhenz, chief economist at the National Retail Federation.

    Respondents to the latest NABE Policy Survey express less concern than in earlier polls about fiscal policy uncertainty, but a majority still consider it an impediment to the economic recovery. Most panelists do not see inflation being a major concern in the coming years. The majority of NABE panelists believe that inflation will be at or near 2% in 5 years, ”said NABE Policy Survey Committee Chair Peter Evans,.

    Perspectives on inflation and monetary policy

    • Most panelists do not see inflation being a major concern in the coming years. The majority of NABE panelists believe that inflation will be at or near 2 percent in five years.

    • A majority of respondents (53 percent) indicated they believe monetary policy is on the right track, but 39 percent say that monetary policy was too stimulative.

    • 30 percent of panelists believe the Federal Reserve should stop reinvesting Treasury debt and agency-backed securities by the end of 2014, but only 7 percent expect the Fed to do so by then.

    Association executives are enthusiastic about the economy. This spring, association executives expressed more optimism in the U.S. economy than ever before in PULSE’s seven-year history, which began in fall 2008. Since the survey is conducted semiannually, that means hope in U.S. economic prospects has reached its highest point in 12 consecutive survey rounds. The Confidence Index, a metric that scores executive optimism from 0 to 100 (100 being unfettered optimism) puts this latest sample at 67. That’s 17 points above neutral (50%), and 27 points above last fall’s sample. But such high hopes for the economy isn’t the only new record.

    This was such a sharp turnaround from last fall’s survey, when optimism in the U.S. economy reached a two-year low. This is because the launch date for the fall 2013 edition of PULSE fell in the midst of a 17-day government shutdown. Pessimism stemmed largely from frustration towards what many association executives considered political recklessness by Congress and the administration.

    This spring’s PULSE saw the gap shrink to its smallest size between confidence in the U.S. economy and confidence in respondents’ members’ professions. This is the fifth spring in a row (of six total springs) that confidence in both the economy and respondents’ members’ professions are higher than the previous fall. To obtain the TRENDS PULSE Report, contact Linnae O’Flahavan at

    Association TRENDS