A commercial space is for rent, Thursday, March 25, 2021, in the SoHo district of New York. Business economists nationwide now expect slower economic growth this year due to the widespread delta variant of the coronavirus, while also saying the economy could improve faster next year as vaccinations will be better accepted.
AP Photo / Mark Lennihan
NEW YORK (AP) – Business economists nationwide now expect slower economic growth this year due to the widespread delta variant of the coronavirus, while also saying the economy could improve faster l next year as vaccinations become more widely accepted.
In a survey released Monday, the National Association for Business Economics found that its panel now expects full-year economic growth of 5.6%, down from a forecast for 6.7% growth in the NABE’s previous survey in May. However, economists raised their economic growth forecast for 2022 to 3.5% from a previous forecast of 2.8%.
The NABE’s findings are based on responses from 47 forecasters earlier this month.
Inflation is expected to remain at high levels through the fourth quarter before moderating next year, panelists predict. Consumers have faced significantly higher prices for goods and services this year as businesses face an unprecedented rise in wholesale prices.
While the NABE survey now sees inflation soaring this year to a high 5.1% year-on-year, economists seem to believe that the price hike will prove mostly temporary. Inflation is expected to moderate next year to a level of 2.4%.
The coronavirus remains the dominant variable in the evolution of the US economy for the rest of the year and until 2022, according to NABE. About two-thirds of those polled consider a potential vaccine-resistant version of the coronavirus to be the greatest risk to the economy. Faster vaccine roll-out, however, would provide the biggest benefit to the economy this year and next, about half of the panelists said.
NABE panelists were divided on the issue of a potential labor shortage. About 44% of the panelists said their companies were not experiencing a labor shortage or problem, while 35% said they were experiencing a labor shortage. One in five panellists either did not know or were not sure.