University of Michigan report: Effects of tax cuts on US growth to diminish

Sofia Ordonez/CNNMONEY

Economists at the University of Michigan say in an annual forecast that effects of federal spending and tax cuts on U.S. economic growth will start to diminish in 2019 before fading out in 2020.

Researchers at the school’s Department of Economics said Thursday they’re projecting overall economic output growth, as measured by gross domestic product, will register 2.7 percent growth in 2019. Growth is forecast at 1.9 percent in 2020.

Daniil Manaenkov, one of the economists, notes that the nation’s “budding trade war with China makes it hard to interpret the economy’s recent performance.”

The forecast, produced by the Research Seminar in Quantitative Economics , says the annual unemployment rate will drift down from an average of 3.9 percent this year to 3.5 percent in 2019 and 3.4 percent in 2020.

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