Arrows indicate trends.
- Inflation: yellow arrow pointing upward (expected to rise above the Fed’s target rate through 2022)
- GDP growth: green arrow pointing up (U.S. poised in 2021 for its strongest growth in decades)
- Wage growth: yellow arrow pointing up (propelled temporarily by labor-market dislocations)
- Unemployment: yellow arrow pointing down (improvement to accelerate with a strong recovery of labor-intensive services)
- Consumer confidence: yellow arrow pointing upward (pandemic worries replaced by economic optimism as growth rebounds)
- Volatility: yellow arrow pointing sideways (steady now, but may increase as Fed responds to inflation with tighter policy)
Source: Wells Fargo Investment Institute, as of September 30, 2021. Subject to change. GDP = gross domestic product. Fed = Federal Reserve
Key Takeaways
- The U.S. economy is being propelled to its strongest growth since the mid-1980s by successful vaccine deployment, ample household and corporate cash, and massive government support.
- Monetary and fiscal stimulus is set to continue while the economic recovery is strong. One risk to the policy outlook is supply chain disruptions boosting inflation and interest rates.
- The job market should continue improving due to strong growth and an easing of labor shortages.