The Flinchum File
Thoughtful Economic Analysis and Existential Opinions

NABE Survey Summary

12/07/2020

As a longtime member of the National Association of Business Economics, I always look forward to their member-survey of economic conditions.  In no particular order, here are some of their latest predictions:

  1.  After the whipsaw Q3 increase in GDP of 33.1%, we expect GDP will increase only 4.1% in this quarter and 2.9% in the next quarter – a definite slowdown!

  2.  GDP will grow 3.4% in all of 2021, mostly in the second half.

  3.  The greatest risk to the forecast is the vaccine — approval and distribution and acceptance.

  4.  Only 2% of economists suspect a successful test-and-trace will help the economy, as it will quickly be politicized.

  5.  Interest rates will remain low, especially short-term rates.

  6.  After losing 11% this year, they expect the dollar to stabilize around $1.18/euro.

  7.  Industrial production slowed 7.1% this year but is expected to expand 4.4% next year.

  8.  While unemployment in 2020 averaged 8.1%, it should drop to a still-high 6.3% next year.

  9.  Inflation was only 1.2% this year, compared to only 1.8% next year — no problem!

  10.  Sixty-nine percent of economists predict 5% of the jobs lost will be permanent — a permanent increase in unemployment!

  11.  Seventy-six percent believe the Fed alone cannot prevent a further slowdown without near-term fiscal aid — Fed out of dry powder(?).

  12.  Only seven percent believe the Biden Administration will cause a loss of private-sector confidence, while 41% believe it will increase confidence.

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