Despite the Delta variant, inflation fears, supply chain disruptions, and uncertainty in Washington on spending and tax policies, the economic recovery from the pandemic meltdown remains intact.
After losing about 5% in September, the Standard & Poor’s 500 stock index has rebounded in the last three weeks and closed at a new record high on Thursday.
The 60 economists surveyed in early-October by The Wall Street Journal expect the expansion to extend over the five quarters ahead. The consensus forecast is that the growth rate for the third quarter of 2021 will land at 3.1%, followed by 4.8% growth in the current quarter, with 4..2%, 3.8%, and 3.2% growth rates expected in the first three quarters of 2022.
Based on the consensus forecast of economists surveyed by The Journal shown in the dotted red line, the economy is expected to be back on its long-term growth trajectory, shown in the gray line, a year from now -- as if the pandemic never happened.
The Standard & Poor’s 500 stock index closed Friday at 4,544.90, one-tenth of 1% lower that the all-time closing high it had hit on Thursday. The S&P 500 was up +1.63% from last week. The index is up +68.04% from the March 23, 2020, bear market low.