March 2021 Economic Forecast

We are maintaining our outlook for ongoing economic recovery through 2021 as well as extended rise in 2022 and 2023. Regarding the next three to four quarters, ascent is indicated by rise in the ITR Leading Indicator™, ITR Retail Sales Leading Indicator™, and ITR Financial Leading Indicator™. Additionally, the latest monthly and weekly retail sales data shows the consumer is spending their after-tax income. Personal savings went up in late 2020, suggesting that the consumer in general has the wherewithal to keep spending. Passage of the latest version of the stimulus bill would likely add to the retail sales trend and further increase personal savings.

We are not inclined to alter the slope of the rising trend even though passage of additional stimulus appears likely in the coming days/weeks. One reason is that the Federal Reserve Bank of New York’s Weekly Economic Index is showing some weakness, which suggests to us that we should maintain our projection of slower-than-average ascent in GDP through mid-2021.