Provided by Nicholas Wealth Management

March 2, 2021

Here’s what the financial forecast may have in store.

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It can be easy to overlook the nation’s solid economic fundamentals when the financial media splashes stories every day about an army of amateur traders, short-selling mania, and initial public offerings (IPOs) that double in price on the first day of trading.

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But a recent survey by The Wall Street Journal showed just how upbeat economists are about 2021.¹

Here’s a quick summary of the highlights.

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Increased projected economic expansion. Economists now expect the economy to expand by 4.9% this year, an increase from their estimate of 4.3% last month. The forecast has brightened due to the distribution of COVID-19 vaccinations and the prospect of additional fiscal relief.

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They are less optimistic about employment. The group sees 4.8 million jobs to be added this year, versus a January 2021 forecast of 5 million. There is an ongoing worry that jobs may take longer to return to certain industries, such as leisure, airlines, and restaurants.²

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Brace for higher inflation. They project a 2.8% increase in consumer prices in June 2021 compared with a year earlier.

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Decreased chance of an economic downturn. The economists believe there is a 17.5% chance of an economic downturn in the next 12 months, an improvement from the 21.2% risk estimate in January. Vaccines and the prospect for new federal spending are driving the optimism.

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While the consensus is upbeat about 2021, it’s important to remain vigilant as economic trends unfold this year. An outside force can cause a sudden shift in sentiment, which is why we monitor surveys like the one conducted by The Wall Street Journal.

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Keep us in mind as you read information about the economy. We’d welcome the opportunity to hear your thoughts.

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Investment advisory services offered through Bluepath Capital and Triumph Wealth Advisors. Nicholas Wealth, Bluepath Capital and Triumph Wealth Advisors are separate entities, and are not owned or controlled by WEG.

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Citations.

1. The Wall Street Journal, February 11, 2021

2. S&P Global Market Intelligence, September 21, 2020