It’s Been 20 Years Since the Economic Has Grown at This Rate

“We might never see this again in our lifetimes,” said Ryan Severino, chief economist at JLL, in his keynote speech at the GlobeSt.com Net Lease conference in Los Angeles. Severino was not only referring to the pandemic—the definition of a black swan event—but also to the pace of growth out of the downturn. With GDP growing roughly 5.5% this year, he called the rate of growth both “super normal” and “ahead of potential.”

This year, the US will reach its highest growth rate since 2000, when GDP increased 4.1%. In fact, very rarely in the US history has growth exceeded 5%. In 1984, the economy grew at 7.2%, and in 1954, GDP increased 8%. Severino said that the 5.5% growth rate will put 2021 on the map as a historically notable year for growth.

The rebound in demand following the pandemic was the chief reason that the economy has rebounded back so rapidly, but Severino said that there isn’t a single major force driving demand but rather a confluence of events.

Among those events, he listed what he called expected drivers like a dovish monetary policy, strong fiscal stimulus and a pro-cyclical force. There are also unique drivers that are distinctive to this event, which include the reopening of the supply side of the economy and excess dry powder because consumers have not been living normal lives. This has led to both pent up demand—people want to do things and spend money—as well as a reserve of discretionary savings that allows people to spend.

Severino isn’t alone in noting the scale of the economic growth. Earlier this year, John Chang, SVP and director of research services from Marcus & Millichap, predicted that this year could deliver the strongest growth since 1984. While the prediction didn’t hold—economic growth fell short of most optimistic forecasts—it is still historically strong growth. Like Severino, Chang listed the stimulus and the renewed economic confidence that are chiefly responsible for the economic growth this year.