(The Center Square) – Another major economic group has reduced its optimism for the U.S. economy this year, revising its estimates for 2021 to post slower-than-expected growth.
The National Association of Business Economics released its growth projections on Monday, lowering its forecast from 6.7% growth for 2021 to 5.6%, more than a percentage point since May.
âNABE Outlook survey panelists have moderated their expectations regarding the outlook for economic growth in 2021 since May,â said NABE President-elect David Altig, who is also executive vice president and chief research officer at the Federal Reserve Bank of Atlanta. âThe median forecast projects an annualized growth rate of 4.0% in the third quarter of 2021 for inflation-adjusted gross domestic product, or real GDP. The panel’s view has become more tempered about 2021 as a whole, as its median estimate of real GDP growth for 2021 is 5.6%, compared to the 6.7% forecast in the survey. May 2021.
The report is compiled by interviewing 47 economic experts. They have repeatedly highlighted concerns about inflation, although most expect the inflation picture to improve in 2022.
âInflation expectations have risen significantly from those of the May 2021 survey,â said Holly Wade, chair of the survey, who is also executive director of the NFIB Research Center. âMore than half – 58% – of survey respondents consider the balance of risks to economic growth in 2021 to be down, while 16% expect the balance to be up, a complete reversal from the May survey results. Panelists point to a variant of the coronavirus against which vaccines may be ineffective as the main downside risk. “
The majority of the expert panel also predicts that unemployment will return to pre-pandemic levels by 2022, although it has so far remained stubbornly above economists’ forecasts.
“A third of the panelists – 33% – anticipate a resumption of employment in 2023 or later, a result unchanged from that of the May survey,” NABE said in its report.
The report comes just days after the world economic group, the Organization for Economic Co-operation and Development (OECD), released its Economic Outlook, an analysis and projection of the months ahead for the economy.
The OECD said it had lowered its projections for the United States from 6.9% GDP growth for 2021 to 6%, a significant drop.
The OECD reported concerns similar to those of the NABE, namely the delta variant, inflation and unemployment.
âThe recovery remains very uneven, with very different results across countries, sectors and demographic groups in terms of production and employmentâ¦ leaving countries facing different policy challenges,â the OECD report says. âIn some countries where production has returned to pre-pandemic levels, such as the United States, employment remains below pre-pandemic levels. In others, notably in Europe, employment has been largely preserved, but output and the total number of hours worked have not yet fully recovered. Rapid rebounds in activity have taken place in a few emerging market economies, but in some cases this has been accompanied by strong inflationary pressures. “