May 24, 2021 - Economy

Economists see higher growth and inflation for 2021

Data:; Chart: Axios Visuals
Data:; Chart: Axios Visuals

The latest forecast from the National Association for Business Economics (NABE) released today shows its members largely agree with Atlanta Fed President Raphael Bostic and the U.S. Fed that inflation will moderate even as growth picks up through the rest of the year.

The headline numbers: NABE raised its forecast for U.S. GDP this year to increase by 6.5% in 2021 including 8.5% growth in the second quarter.

  • In the survey, 56% of respondents say the risks for economic growth are to the upside, meaning that the economy outpaces expectations, while just 15% say risks are to the downside.
  • In the group's last survey in March, panelists had expected GDP to rise by 5.2%.

On jobs: NABE's survey respondents also expect employment gains in 2021 and 2022 to be greater than anticipated in the previous survey.

  • 56% of survey respondents anticipate nonfarm payrolls will return to pre-COVID-19 levels in 2022 and 10% expect the rebound will happen by Q4 2021.
  • In the March survey, 59% anticipated that to occur in 2023 or later.

On inflation: "Respondents expect inflation to accelerate strongly in 2021 before cooling in 2022," the survey found.

  • NABE economists expect the Consumer Price Index, to be 2.8%, year over year (y/y) in Q4 2021, and 2.3% y/y in Q4 2022, compared to 1.2% in 2020.
  • Panelists also anticipate that the Fed's favored measure for inflation, the core personal consumption expenditures (PCE) price index, will rise to 2.2% y/y in Q4 2021, and 2.1% y/y in Q4 2022.
  • In March, the survey showed expectations for 1.9% inflation at the end of 2021.
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