National

Washington (US), December 7: U.S. annual inflation will remain above the Federal Reserve's target of 2 percent over the next three years amid rising wages and strong demand for goods and services, according to a survey released Monday by the National Association for Business Economics (NABE).
"Eighty-seven percent of panelists cite supply chain bottlenecks, 76 percent identify strong demand for goods and reopening services, and 69 percent list rising wages as key drivers of higher prices," the survey said.
Business economists have ramped up their inflation expectations for both 2021 and 2022 compared with the last survey in September.
The overall consumer price index (CPI) is projected to rise 6 percent in the fourth quarter of 2021 from a year earlier, compared to the 5.1 percent forecasted in the September survey. The CPI inflation is expected to remain elevated by the end of 2022 at 2.8 percent year-over-year, compared to the September's forecast of 2.4 percent.
The core personal consumption expenditures (PCE) price index, the Fed's preferred inflation measure, is now expected to rise 4.1 percent in the fourth quarter of 2021 from a year earlier, and only slow to a 2.6 percent year-over-year rate in the fourth quarter of 2022.
About 71 percent of respondents anticipate that the core PCE gauge will not decline to or below the Fed's target of 2 percent until the second half of 2023 or later, the survey showed.
Meanwhile, 58 percent of respondents anticipate that the U.S. economy will have already achieved or will reach full employment by the end of 2022.
"Two-thirds of the panel expect wage increases will keep inflation elevated over the next three years," said survey chair Yelena Shulyatyeva, who is also senior U.S. economist at Bloomberg.
On an annual-average basis, the NABE panel expects U.S. real gross domestic product (GDP) to increase 5.5 percent in 2021 before slowing to a 3.9 percent growth rate in 2022.
The Fed began last month to reduce its monthly asset purchase program of 120 billion U.S. dollars by 15 billion dollars. At this pace, the Fed would end its asset purchases by June next year.
But some Fed officials and economists have urged the central bank to accelerate the pace of tapering to give more leeway to raise rates sooner amid inflation pressures.
Source: Xinhua