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How much will economic activity rebound this year, amid vaccinations and pent-up demand now released?
The National Association for Business Economics is out with its quarterly survey of professional economists, many of whom are raising their forecasts. The mid-range prediction is for GDP to grow 6.7% this year. While GDP is not a proxy for well-being, it does have implications for people getting back to work.
The forecast by NABE economists is for employment to recover to pre-pandemic levels by early next year. A recent rise in inflation — up 0.8% last month — has some consumers worried.
“Perception that individuals have about inflation is often driven by something expensive that they’re looking at at the moment, ” said University of Arkansas economist Mervin Jebaraj. He said prices have shot up for a few items — gasoline, lumber, used cars — because of supply chain disruptions caused by the pandemic.
“But these are all temporary issues that we fully expect to get resolved,” Jebaraj said.
The most serious economic risk is the pandemic itself: “The different strains of COVID, whether the vaccination still works as we expect it to do, but also the vaccination rate,” said Holly Wade of the National Federation of Independent Business.
She said major setbacks in overcoming the virus could slow the economic recovery.
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