NABE Outlook

September 2021


NABE Panelists Temper Forecast for GDP Growth in 2021; Two-Thirds Expect Full Job Market Recovery by Late 2022


The September 2021 NABE Outlook presents the consensus macroeconomic forecast of a panel of 47 professional forecasters (see last page for listing). The survey, covering the outlook for 2021 and 2022, was conducted September 10-16, 2021. The NABE Outlook Survey originated in 1965, and is one of three surveys conducted by the National Association for Business Economics (NABE); the others are the NABE Business Conditions Survey and the NABE Economic Policy Survey. Founded in 1959, the National Association for Business Economics is the professional association for those who use economics in their work. NABE has over 3,000 members and 45 chapters nationwide. Holly Wade (Chair), NFIB; Gregory Daco, Oxford Economics; Jan Hogrefe, Boeing; Mervin Jebaraj, University of Arkansas; Jack Kleinhenz, CBE; National Retail Federation; and Kathleen Navin, CBE, IHS Markit, conducted the analysis of survey responses for this report. The views expressed in this report are those of the panelists, and do not necessarily represent the views of their affiliated companies or institutions. This report may be reproduced in whole or in part with appropriate citation to NABE.


SUMMARY: “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.”



• NABE panelists have moderated their expectations about the prospects for economic growth in 2021 since the May outlook survey. The median forecast for the third quarter (Q3) of 2021 calls for an increase of 4.0% in inflation adjusted gross domestic product (real GDP), quarter-over-quarter (q/q) annualized. This growth rate would be a significant deceleration from the Q2 2021 actual growth rate of 6.6%, and lower than the May survey median forecast for Q3 2021 of 6.2%. In contrast, the median forecast for the Q4 2021 growth rate is higher compared to that in the May survey: 5.1% (up from 4.8% in the previous survey), while the median forecast for Q1 2022 is 4.2% (up from 3.8%).



• Panelists’ views regarding risks to growth in 2021 changed significantly from those in the May 2021 survey. More than half of respondents (58%) indicate that the balance of risks to economic growth is skewed to the downside, a significant increase from the 15% of respondents who held this view in the May survey. Sixteen percent of respondents indicate the balance of risks to economic growth is skewed to the upside, down strikingly from 56% in May. About one-quarter (26%) views risks to the outlook as weighted neither to the upside or downside.



• 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.



• Survey respondents have revised their inflation expectations for 2021 up sharply, and up moderately for 2022. Inflation, as measured by the Consumer Price Index, is forecasted to reach 5.1% year-over-year (y/y) in Q4 2021, up from 2.8% y/y in the May survey. Inflation is expected to moderate to 2.4% y/y in Q4 2022, up from 2.3% y/y forecasted in the May survey. Panelists expect the personal consumption expenditures (PCE) price index, less food and energy, to rise 3.8% y/y in Q4 2021, and 2.2% y/y in Q4 2022—slightly above the Federal Reserve’s 2% inflation target.