Most market participants and policy-makers have been surprised by the speed of the recovery. On our estimates, the US economy will reach pre-COVID-19 output levels by the current quarter.
From 3Q21 onwards, we expect US GDP to overshoot the path it was projected to follow before the recession. The last time GDP rose above its pre-recession path was in the 1990s. Back then, it took 15 quarters compared to seven quarters this time around. Moreover, we expect the US economy to reach 103% of its pre-recession path in 12 quarters (i.e., by December 2022) versus 27 quarters in the 1990s.
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David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal.
He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.
