U.S. Outlook to 2025

U.S. on the Mend but Uncertainty Remains High

Updated: November 03, 2021  

Prow of shipping container ship; woman looking out over water Prow of shipping container ship; woman looking out over water Woman looking out over water

Prospects for the U.S. economy are generally bright. Still, there will be some hurdles to overcome over the next few months. The solid growth should enable the economy to return to full employment by the end of next year or early in 2023. The main risks to the outlook revolve around the rapid spread of the delta variant of the coronavirus, which is taking a particularly heavy toll on several states where vaccination rates are low. Also concerning is the surge in inflation that began in the spring and the degree to which it is transitory, as the Federal Reserve contends it is, or more permanent.

  • Aggregate demand
  • Fed starts to gradually reduce massive stimulus

Key findings


The U.S. economy will expand by 5.9 per cent this year and 4.1 per cent in 2022.


Inflation has surged since the spring and has proven to be more persistent than Fed officials had assumed. We believe the surge in consumer prices is transitory, a view supported by the gradual decline in the rate of monthly price increases since April. However, the threat of higher inflation remains a downside risk to the outlook.


Labour shortages have become a major problem for some industries, including those in the accommodation and food sector. The shortages are linked to several factors, including ongoing fears about the pandemic, government financial assistance, ramped-up retirement rates among the baby boomers, and the desire of many Americans to find new careers. Some restaurants and bars have responded by offering higher wages and improved working conditions.


The Fed has begun to gradually unwind the massive monetary stimulus it launched in the spring of 2020. The tapering of bond purchases will begin in November and the first interest rate hike will take place in the second half of next year.

Previous releases

U.S. Outlook to 2025—August 2021

The current U.S. economic recovery is different from any other rebound in recent history. It has been powered by billions of dollars in excess household savings, by firms anxious to take on workers, and by huge fiscal and monetary policy support.

Impact paper  |  20-min read
August 5, 2021