The U.S. economy will expand by 4.3 percent in 2021, according to a consensus of economists polled by the Wall Street Journal. Last month, the consensus had foreseen a 3.7-percent growth outlook for the new year.
What will drive it up?
The same lines that have been repeated for three months: a more aggressive vaccination program and the pending expansion of stimulus spending will brighten up the economic future respondents said… and have said.
Almost two-thirds of those surveyed expect vaccine distribution to boost growth “substantially” this year; more than a third thought the vaccine campaign will increase the economy’s production “modestly.”
The consensus showed an expectation of 2.2-percent growth in 2021’s first quarter, 4.9 percent in the second quarter, and 5.2 percent in the third.
TREND FORECAST: Again, there will be the “Biden Bounce,” but it will be both artificial and temporary.
While his fans are pleased he is replacing Donald Trump as President, an analysis of his “new” team is essentially a replica of the Obama administration. And, it should be noted that overall GDP growth during Obama’s term averaged 2.0 percent. Of course, Obama was hit by the Great Recession, however, despite the massive quantitative easing and zero-interest-rate policy, growth remained tepid.
Now, Biden is coming into office at the onset of the “Greatest Depression.” With much of the fiscal and monetary policy measures already overextended, artificial expansion measures will be greatly limited.
