GDP forecast cools, but US jobs projections hold steady with return to pre-Covid levels by end of 2022

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September 27, 2021 — The forecast for growth in US gross domestic product cooled, but projections for jobs held steady, according to the “Outlook” survey report released today by the National Association for Business Economics. Pre-Covid job levels are forecast to return to pre-Covid levels by end of next year.

Of the 47 professional forecasters surveyed for today’s report, the median forecast for real GDP called for 4.0% annualized growth rate in this quarter, the third quarter. That’s down from the forecast 6.2% growth in the previous NABE survey released in May. It’s also down from the second quarter’s actual growth rate of 6.6%.

“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 VP and director of research, Federal Reserve Bank of Atlanta. “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.”

When it comes to jobs, 67% of survey respondents anticipate nonfarm payrolls will return to pre-Covid levels by the end of 2022. That is similar to the 66% who said the same in the previous survey in May.

Other jobs forecast findings:

  • No consensus on labor shortage: 44% of panelists indicated their companies were not experiencing a labor shortage while 35% said they were. Twenty-one percent were not sure.
  • Panelists now expect monthly nonfarm payrolls in 2021 to increase by an average of 558,000, down from the 566,000 anticipated in the May survey. Employment growth is not expected to be as strong in 2022 as in 2021; the median forecast calls for 321,000 net new jobs per month — approximately 14% higher than the 281,000 expected in the May survey.
  • Panelists expect the US unemployment rate to decline steadily through 2022, reaching 4.0% in the fourth quarter of 2022.
  • Nonfarm business compensation per hour is projected to increase by 4.0% this year, and is expected to slow to 3.5% in 2022.

NABE’s survey also looked at inflation.

“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.

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