IHS Markit revises 2021 U.S. real GDP Forecast based on supply chain export surge

Analysts at IHS Markit have upwardly revised their 2021 U.S. real GDP forecast to 5.7% on unexpected surges in exports, inventory investment in October

“GDP growth will surge to 7.1% in Q4, driven by a rebound in vehicle production and unexpected strength in exports and inventory investment,” says Joel Prakken, chief U.S. economist and co-head US economics, IHS Markit. “The transition from COVID pandemic to endemic, gradual resolution of supply disruptions and labor shortages, and still accommodative financial conditions will support continued expansion into 2022 even as pandemic-era fiscal support wanes.”

Chris Varvares, co-head U.S. economics, IHS Markit notes that near-term price and cost pressures will push headline CPI inflation to 4.6% this year and 3.7% in 2022, after which he expects inflation to subside close to the Fed’s long-run 2% objective.

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