By Casey Harper (Center Square)
Yet another major economic group has lowered its optimism for the U.S. economy this year, revising its forecast for 2021 to show lower-than-expected growth.
The National Association of Business Economics released its growth forecast on Monday, lowering its 6.7% growth forecast for 2021 to 5.6%, the highest percentage since May.
“NABE Outlook Survey panelists have moderated their expectations for economic growth from May 2021,” said NABE President-elect David Altig, who also serves as executive vice president and director of research at the Federal Reserve Bank of Atlanta. “The moderate forecast calls for a 4.0% annual growth rate in the third quarter of 2021 for gross domestic product, or real GDP, including inflation. , Compared to the 7.7% forecast in the May 2021 survey.
The report is based on a survey of 47 economists. They have repeatedly pointed to concerns about inflation, although most expect that the inflation situation will improve in 2022.
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“Inflation expectations have risen significantly in the May 2021 survey,” said Holly Wade, the survey chair who serves as executive director of the NFIB Research Center. “More than half of respondents to the survey – 58% – view the balance of economic growth risk in 2021 as negative, while 16% expect the balance to be reversed, in stark contrast to the results of the May survey. Panelists point to a form of coronavirus against which vaccines can be ineffective as a major negative risk.
The majority of the panel of experts also expects unemployment to return to pre-epidemic levels by 2022, although so far it remains more stubborn than economists predict.
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The NABE said in its report that “one-third of panelists expect job recovery in %% – 20223 or later, which was unchanged in the May survey.”
The Organization for Economic Co-operation and Development (OECD) has released its economic outlook, just days after the release of next month’s analysis and projection for the economy.
The OECD reports that it lowered its estimate for the United States from 6.9% GDP growth in 2021 to 6%, a significant decline.
The OECD points to similar concerns as the NABE, such as delta diversification, inflation and unemployment.
The OECD report states, “Recovery remains very uneven with significant differences between countries, sectors and demographic groups in terms of production and employment … countries are facing various policy challenges.” “In some countries where production has returned to pre-epidemic levels, such as the United States, employment is lower than before the epidemic. Among others, especially in Europe, employment has been largely saved, but output and total working hours have not yet fully recovered. In a few emerging market economies the rapid pace of activity has returned, but in some cases it is accompanied by high inflationary pressures.
Syndicated with permission from Center Square.