Economists Expect Growth to Moderate in Coming Months
July 20, 2021
The U.S. economy’s post-pandemic rebound likely peaked in the spring but strong expansion is expected to remain, according to economists surveyed by the Wall Street Journal. Climbing vaccination rates, government stimulus spending, and pent-up consumer demand led to a burst of economic activity in the spring, but things are starting to slow, economists say.
Economists surveyed by the WSJ estimate, on average, that the economy grew by a seasonally adjusted annual rate of 9.1% between April and June. If accurate, that would mark the second-fastest pace since 1983, topped only last summer’s economic reopening. The surveyed economists expect growth to slow to 7% in the third quarter and continue slowing to a 3.3% rate in the second quarter of 2022.
They expect 2021 to see full-year GDP growth of 6.9%, then declining to 3.2% next year, then slowing further to 2.3% in 2023.
With the more moderate growth, inflationary pressures are likely to ease as well, the economists say. On average, the survey found inflation expectations of 4.1% in December as compared to a year earlier. By the end of 2022, they expect annual inflation to fall to 2.5%.