The outlook for US GDP growth outlook is softening and we lower our forecast. The economy has passed its post-crisis growth peak and second-quarter real GDP growth of 6.5% was below our expectation. Supply disruptions are weighing on the recovery, particularly in the construction sector.
The key takeaways are as follows:
We lower our GDP growth forecast to 6% for 2021 as supply-side disruptions challenge the recovery.
The construction sector outlook is markedly weaker as high input costs and low housing demand bite.
We lift our CPI forecasts, but the July CPI release supports our view rising inflation is temporary.