U.S. Economic Outlook, September 2021

The obstacles to a full recovery have been identifiable for some time: Viral resurgence, long-term unemployment, supply chain dislocation. We still expect these are temporary challenges, but all are proving more durable than we had hoped.

The Delta strain of COVID-19 caused a surge that again stretched hospital capacity and challenged the outlook for recovery. The virus was evident in the data as hiring slowed and inflation in the travel sector ended its rapid ascent, a sign of impaired consumer sentiment. The uneven recovery continues to teach us lessons about the fragility of the old economy; rebuilding will continue, but with a greater eye toward resilience.

Vaccines, rapid testing and quarantine protocols have made it possible to live productively with the virus, but an economy without a pandemic would be preferable. While the most rapid portion of the reopening may be behind us, this slower interval does not change our expectation of a continued recovery.

Key Economic Indicators