Business economists scale back GDP growth expectations for 2021, anticipate full employment recovery by end of 2022.

Today’s Outlook from the National Association for Business Economists is a little more modest than their previous release.

“NABE Outlook survey panelists have moderated their expectations about the prospects for economic growth in 2021 since May,” said NABE President-elect David Altig executive vice president and director of research, Federal Reserve Bank of Atlanta. “The median forecast calls for a 4.0% annualized growth rate 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 real GDP growth estimate for 2021 is 5.6%, compared to the 6.7% forecasted in the May 2021 survey.”

“Inflation expectations have moved up significantly from those in the May 2021 survey,” added Survey Chair Holly Wade, executive director, NFIB Research Center, “but panelists anticipate inflation will ease in 2022. “Over half—58%—of the survey respondents consider the balance of risks to economic growth in 2021 to be to the downside, while 16% expect the balance to be to the upside, a complete reversal from the May survey results,” continued Wade.

“Panelists point to a variant of the coronavirus against which the vaccines may be ineffective as the main downside risk.”

The jobs recovery will take a while, panelists still think.

The panel’s view on the timing of a job recovery is nearly identical to that reported in the May outlook survey. Two-thirds (67%) of survey respondents anticipate nonfarm payrolls will return to pre-COVID-19 levels by the end of 2022, similar to the 66% in the May survey. Twelve percent expect this to occur beginning in Q2 2022, 26% anticipate it to occur in Q3 2022, and 29% expect it in Q4 2022. One-third of panelists—33%—anticipates the job recovery to occur in 2023 or later, a result unchanged from that in the May survey.

More at the link.