Economic Growth Likely Peaked in Spring, Says WSJ
New York, NY, July 19, 2021-The U.S. economy’s 2021 growth surge likely peaked in the spring, but a strong expansion is expected to continue into next year, say economists surveyed by The Wall Street Journal.
“The U.S. economy’s 2021 growth surge likely peaked in the April-June quarter at a seasonally adjusted annual pace of 9.1%, economists surveyed by The Wall Street Journal said, though they expect a strong 7% in the current quarter, drifting down to 3.3% in the second quarter of 2022. For 2021 as a whole, they forecast 6.9% growth, then 3.2% next year and 2.3% in 2023. As growth eases, they said, so should job gains and inflation.
“Widespread business reopenings, rising vaccination rates and a big infusion of government pandemic aid this spring helped propel rapid gains in consumer spending-the economy’s main driver. But that burst of economic growth is starting to slow, economists say.
“‘We’ve moved into the more moderate phase of expansion,’ said Ellen Zentner, chief U.S. economist at Morgan Stanley. ‘We’re past the peak for growth, but that doesn’t mean something more sinister is going on here and that we’re poised to then drop off sharply.’
“Rather, economists expect the economy to continue growing solidly over the coming year, fueled by job gains, pent-up savings and continued fiscal support. In the longer term, they foresee the expansion gradually cooling down to a more stable post-pandemic pace.
“Economists surveyed this month by the Journal, on average, estimated that the economy expanded at a 9.1% seasonally adjusted annual rate in the April-to-June period. That would mark the second-fastest pace since 1983, exceeded only by last summer’s rapid rebound, when businesses started to reopen after lockdowns and governments began easing pandemic-related restrictions.
“Many economists also estimate U.S. gross domestic product surpassed its pre-pandemic levels in the second quarter.”