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Business Economists Expect Persistent Inflation: NABE Survey A survey released on Dec. 6 by NABE shows that its panel of forecasters expects consumer prices to rise 6 percent in the final quarter of the year compared to the year-ago quarter.

By The Epoch Times Edited by Charles Muselli

Opinions expressed by Entrepreneur contributors are their own.

A 48-member panel of business economists has sharply raised its expectations for inflation compared to its September forecast, with two-thirds predicting that wage increases will keep inflation higher over the next three years.

A survey released on Dec. 6 by the National Association for Business Economics (NABE) shows that its panel of forecasters expects consumer prices to rise 6 percent in the final quarter of the year compared to the year-ago quarter, marking a sharp upward revision to the 5.1 percent rate of inflation the panel predicted in September for the same period.

Julie Coronado, vice president of NABE, said that 71 percent of the forecasters expect the Fed's preferred inflation gauge, the so-called core PCE price index, to remain above the central bank's 2 percent target until at least the second half of 2023.

"NABE Outlook survey panelists have ramped up their expectations for inflation significantly since September," Coronado said, with the survey showing forecasters expect the core PCE inflation rate to hit 4.9 percent for 2021.

Core PCE running at an annual pace of 4.9 percent would be significantly higher than the median projection from the Federal Reserve, which said in its most recent summary of economic projections (pdf), issued in September, that it expects a reading of 3.7 percent for all of 2021. The Fed's September prediction was itself sharply higher than its June forecast of 3.0 percent.

While the Fed expects core PCE to drop significantly next year to 2.3 percent and fall again in 2023 to 2.2 percent, Federal Reserve Chair Jerome Powell acknowledged in recent congressional testimony that factors pushing inflation higher would stick around "well into next year," adding that it's "time to retire" the word "transitory" from the central bank's messaging around inflation.

Surging inflation, which in the 12 months through October hit a 31-year high of 6.2 percent and more than doubled its monthly pace to 0.9 percent compared to September, has put pressure on the Fed to tighten its loose monetary policy settings. Policymakers are mulling an accelerated timeline for phasing out the central bank's massive bond-buying program, which has provided a tailwind to risk assets like stocks. A faster taper schedule would make room for an earlier rate hike by the Fed.

While Powell said the Fed's test for scaling back stimulus has been met on the inflation front, he said the labor market recovery has been lagging. The jobs recovery is a key touchstone for the Fed, with the central bank reluctant to pull back on stimulus too quickly to ensure a long economic expansion for the labor market recovery to firm up.

While the U.S. economy remains around 2.4 million jobs below pre-pandemic levels, the unemployment rate has fallen to 4.2 percent and the labor force participation rate has edged up.

While nearly 60 percent of the NABE panelists expect the job market to reach full employment by the end of next year, views were split over whether the labor force participation rate, which inched up to 61.8 percent in November, would ever return to its pre-pandemic level of 63.3 percent in February 2020.

Of the half that expects a full rebound in the labor force participation rate, just 5 percent predicted this would take place by the end of next year, with around 25 percent expecting a protracted recovery in the measure through 2024 or even later.

The NABE panel's views on the persistence of upward price pressures dovetail with remarks made by a number of economists who have raised the alarm on the stickiness of the current bout of inflation.

By Tom Ozimek

Tom Ozimek has a broad background in journalism, deposit insurance, marketing and communications, and adult education. The best writing advice he's ever heard is from Roy Peter Clark: 'Hit your target' and 'leave the best for last.'

The Epoch Times, founded in 2000, is headquartered in Manhattan, New York, with a mission to provide independent and accurate information free of political bias or corporate influence. The organization was established in response to censorship within China and a lack of global awareness regarding the Chinese regime's repression of the spiritual practice Falun Gong.

The Epoch Times is a widely read newspaper that is distributed in 33 countries and is available in 21 languages. The publication has been critical in providing balanced and detailed reporting on major global events such as the 2003 SARS pandemic and the 2008 financial crisis. Notably, the organization has played a key role in exposing corruption inside China.

Aside from its human rights coverage, The Epoch Times has made significant contributions in a variety of fields. It has received praise for its in-depth analysis and expert perspectives on business, the economy and U.S. politics. The newspaper has also received praise for its broad coverage of these topics.

A series of editorials titled "Nine Commentaries on the Communist Party" appeared in The Epoch Times in 2004. It asserts that freedom and prosperity in China can only be achieved by eliminating the Communist Party, which violated China's cultural and spiritual values. In addition, the organization led the Tuidang movement, which resulted in over 400 million Chinese citizens quitting the Communist Party. In spite of this, 90% of websites referring to the "Nine Commentaries" were blocked by the Chinese regime.

The Epoch Times has been at the forefront of investigating high-level corruption cases within the Chinese regime, with its reporters taking significant risks to uncover these stories. The organization has received several awards for its investigative journalism.

The organization has received several awards for its investigative journalism. For more, visit

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