Ronald Reagan was in the White House, ‘Return of the Jedi’ was in theaters, and economic growth reached an astonishing 7.9%.
The US has produced many more Star Wars movies since 1983, but growth has never reached that level – until this year, if economists are right. Those polled by The Wall Street Journal raised their average forecast for 2021 economic growth to 6.4%, measured as the change in inflation-adjusted gross domestic product in the fourth quarter of a year earlier. If realized, it would be one of the few times in 70 years that the economy has grown so rapidly.
“We had an incredible shock, but look how fast we are bouncing back,” said Allen Sinai, chief economist and strategist at Decision Economics Inc. said. “We are in the early stages of recovery, and we have three to five years left. I think we’re going to end up in a boom. ”
Economists expect growth to slow to 3.2% next year, which will still make 2021-22 the strongest two-year performance since 2005.
That surge could have a potentially worrying side effect. Inflation, measured by the consumer price index, is expected to jump sharply from 1.7% in February when March data are released on Tuesday. This is partly a feature of the data, as the declining consumer prices recorded at the start of the pandemic in March last year are declining from the 12-month calculation.