Posted by: Josh Lehner | July 9, 2021

No Permanent Damage Expected

Happy Friday! Just a couple of charts from our latest forecast. The good news is our office is not expecting any long-run, permanent damage this cycle, unlike recent experiences. Despite the supply constraints, this expansion will be quicker, and more complete than recent cycles. In the aftermath of each of the past two recessions, there was a big downgrade to the economic outlook, relative to pre-recession expectations. We never regained the old trend line. The economy was on a lower, and slower path. But not this time. We expect employment to come close to regaining the old trajectory — the out years will ultimately depend on migration flows in the years ahead. And we know incomes are up today, but expect as the federal aid fades, growth will slow but remain a bit stronger than we forecasted pre-pandemic. These underlying dynamics — plus asset markets and corporate profits — are the key reason why our forecasts for state revenue are likewise higher than they were a year and a half ago.


  1. Kinda blows minds that we can shut down an economy for a year plus and just keep pumping money in and not make a dent in lifestyles.

    What’d the guy say about we’re all Keynesians now?

    Am just holding my breath on inflation – Temporary (Yellen et all) or extended (my swag). Looking at 10 year interest rates, I guess the market isn’t agreeing with me.

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