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The Conference Board is upgrading its forecast of 2021 US GDP growth from 3.6 percent y/y to 4.1 percent y/y. US macroeconomic indicators signal that the rebound in 4Q20 held up better than we’d originally forecast, yielding an expected quarterly growth rate of 3.5 percent q/q (quarter-over-quarter, seasonally adjusted and annualized). This improvement put the recovery on a stronger footing as the US economy entered 2021. Furthermore, the passage of an additional $900 bln of fiscal support and the approval of two COVID-19 vaccines in December pull strength that we had previously expected to boost growth in 2Q21 forward into 1Q21. This results in a forecast of 2.0 percent q/q for 1Q21. Finally, the outcome of the Senate races in Georgia now make the prospect of additional fiscal support much more likely. We expect it to be deployed in the spring and therefore maintain our strong 2Q21 forecast.
Looking further into the year, we continue to predict very strong growth over the summer as large-scale vaccine deployment unlocks pent-up consumer demand for services. This results in 3Q21 growth of 6.1 percent q/q. The pace of the recovery then slows to 4.6 percent q/q in 4Q21. We now expect US economic output to return to prepandemic levels in 3Q21, a quarter earlier than previously forecasted.
For more details on our new US forecast and two additional recovery scenarios please click here.
February 12, 2021 | PUBLICATION
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