MetLife’s Matus Says U.S. Economy Needs Supply Chain Fix to Boom

(Bloomberg) -- Two key parts of the economy, the supply chain and the school system, need to be fixed for the U.S. to reach its full post-pandemic potential, says MetLife’s Drew Matus.

“Part of the reason GDP is underperforming is because of the supply-chain issue,” Matus, chief market strategist at MetLife Investment Management, said Thursday in an interview on Bloomberg TV’s Surveillance show. “We need to see the supply chains begin to function well again.”

The pandemic continues to keep many people working from home, constraining production of everything from semiconductors to golf clubs. The resulting shortages are hindering growth, Matus said.

“If you don’t have the product, you can’t sell it,” he said. “So it doesn’t show up in GDP.”

Matus affirmed MetLife’s forecast for annual GDP growth of 5.5%. He spoke hours before the Commerce Department reported inflation-adjusted gross domestic product in the second quarter increased at a 6.6% annualized rate, compared with an initially reported 6.5% and a Bloomberg survey median estimate of 6.7% for the quarter.

A successful reopening of schools also will help determine how fast the economy grows, Matus said. The shift to online learning during the pandemic has kept some parents with young children at home, and crimped sales at businesses linked to the education system.

“The restart of schools is going to be important to the labor market,” he said. “That will improve the labor market situation and the overall health of the economy.”

Conversely, “if schools can’t open and stay open, then we are going to have issues with pulling back potentially millions of workers associated with that, who are having other issues that require schools to be open for them to go to work,” Matus said.

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