US | Past peak growth, but still robust heading into 2022

The US economy is past its peak, but that doesn’t mean the recovery is headed into reverse. While a deteriorated health situation and lingering supply-chain issues weighed on economic momentum at summer’s end, the 2022 outlook for final demand remains robust. We foresee the economy growing 5.5% in 2021 and 4.4% in 2022 – double the 2010-2019 pace of growth.

What you will learn:

• On the consumer front, a gradual employment recovery, with labor supply issues gradually easing and wage growth remaining solid, should support income growth as fiscal transfers fade. 
• After staging its strongest post-recession recovery, business investment growth will moderate through 2022, in line with cooler demand. Still, the need to expand productive capacity and replenish inventories will buoy robust activity.
• We believe inflation has peaked. With demand cooling and supply gradually rebounding, we expect inflation to cool in the coming quarters. Fears of runaway inflation or stagflation are misguided.