By Patrick Burnson, Executive Editor ·
December 6, 2021
Analysts at IHS Markit have upwardly revised their 2021 U.S. real GDP forecast to 5.7% on unexpected surges in exports, inventory investment in October
“GDP growth will surge to 7.1% in Q4, driven by a rebound in vehicle production and unexpected strength in exports and inventory investment,” says Joel Prakken, chief U.S. economist and co-head US economics, IHS Markit. “The transition from COVID pandemic to endemic, gradual resolution of supply disruptions and labor shortages, and still accommodative financial conditions will support continued expansion into 2022 even as pandemic-era fiscal support wanes.”
Chris Varvares, co-head U.S. economics, IHS Markit notes that near-term price and cost pressures will push headline CPI inflation to 4.6% this year and 3.7% in 2022, after which he expects inflation to subside close to the Fed’s long-run 2% objective.
“The House passed the Build Back Better Act and sent it to the Senate for likely modification. The legislative outcome is too uncertain to include the Act in our base forecast. However, initial estimates suggest the potential macroeconomic impact is modest,” he adds.
Both analysts contend that too little is known yet about the Omicron strain of the coronavirus to directly adjust their projections of growth and inflation. However, the forecast does incorporate asset values and oil prices that reflect the “new uncertainties.”
December 7, 2021
About the Author
Patrick Burnson, Executive Editor
Mr. Burnson is a widely-published writer and editor specializing in international trade, global logistics, and supply chain management. He is based in San Francisco, where he provides a Pacific Rim perspective on industry trends and forecasts. He may be reached at his downtown office: [email protected]
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