NABE panelists downgrade forecasts for economic growth in US in 2021

10 Dec '21

2 min read

Pic: Sbhaumik | Dreamstime.com

The core US consumer price index, which excludes food and energy costs, is now expected to rise by 6 per cent from the fourth quarter (Q4) of 2020 to Q4 2021 compared to the September forecast of a 5.1 per cent increase over the same period, according to the National Association for Business Economics (NABE). For a second consecutive survey, NABE panelists have downgraded their forecasts for economic growth in 2021.

“NABE Outlook survey panelists have ramped up their expectations for inflation significantly since September,” said NABE vice president Julia Coronado, who is founder and president of MacroPolicy Perspectives LLC.

Nearly three-fourths of respondents—71 per cent—anticipate that the Federal Reserve's preferred gauge of inflation, the change in the core personal consumption expenditure (PCE) price index will not cool down to or below the Fed’s target of 2 per cent year over year (YoY) until the second half of 2023 or later, NABE said in a press release.

“Nearly six out of ten panelists anticipate the US economy will reach full employment within a year,” added survey chair Yelena Shulyatyeva, senior US economist, Bloomberg.

“Two-thirds of the panel expect wage increases will keep inflation elevated over the next three years.”

More than half of the panelists expect the US economy will reach full employment within a year. Slightly fewer than 6 in 10 respondents (58 per cent) anticipate the US economy will have already achieved or will reach full employment by the end of 2022. Twenty nine percent anticipate full employment in 2023, and 11 per cent expect full employment in 2024 or later.

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