Supply Chain Disruptions to Slow GDP Growth

Plus: PAVE a Way to Profits You are receiving this limited-time email resource as a subscriber to Kiplinger's free e-newsletters. To unsubscribe at any time, simply click the link in the footer below. AUGUST 2, 2021 [View in browser]( HOW TO PROTECT AND GROW YOUR BUSINESS AND INVESTMENTS NOW GDP should surge 6.0% this year, compared with last year’s 3.5% drop. Growth would be even higher, but it will be constrained by various shortages that have hindered homebuilding and vehicle production, in particular—one reason GDP grew at a lower-than-expected 6.5% rate in the second quarter of this year. Shipping problems and low goods inventories will also ding consumer spending a bit. GDP growth next year: 5.5%, bumped up by the infrastructure legislation currently making its way through Congress, but it will likely slow quickly after that. The Federal Reserve isn’t worried about inflation—at least not yet—the consensus being that current price pressures are transitory. Even so, there’s a real risk that businesses will face rising costs for labor and materials for much longer than the Fed expects. --------------------------------------------------------------- SPONSORED CONTENT FROM VANGUARD PERSONAL ADVISOR [Want More Money to Spend in Retirement? Vanguard Advisors Can Help]( At Vanguard, we're invested in you. Which is precisely why we've created Vanguard Personal Advisor Services®, providing remote access to expert financial advisors, real-time goal tracking, and more confidence you'll meet your goals. There's never been a more perfect time to [get started](. [READ MORE]( --------------------------------------------------------------- A bipartisan infrastructure plan has quickly gained steam in Washington, providing a renewed burst of hope for [construction, materials, green energy, 5G and a host of other stocks]( tied to an anticipated influx of spending. In the same vein, it also provides a potential tailwind to an exchange-traded fund (ETF) we highlighted that carries many of these themes: The Global X U.S. Infrastructure Development ETF ([PAVE]( which also earns a big thumbs-up from independent research firm CFRA. “While proposed federal spending would be a boost to PAVE, CFRA thinks many positions in PAVE are favorable in their own right due to strong fundamentals,” Todd Rosenbluth, Head of ETF & Mutual Fund Research for CFRA, says in a Monday research note. Rosenbluth also notes that, year-to-date, the fund has outperformed not just the broader market, but also the Industrial Select Sector SPDR Fund ([XLI]( and Materials Select Sector SPDR Fund ([XLB]( “despite PAVE charging a premium 0.47% fee, compared to 0.12% or less for the above ETFs.” CFRA currently gives PAVE five out of five stars, believing that it’s well-positioned to climb higher than the broader equity ETF universe. Free download, [The Kiplinger Letter's Forecast](. No information required from you. SPONSORED CONTENT FROM SMARTASSET [These are Your 3 Financial Advisors Near You]( Finding the right advisor that fits your needs doesn't have to be hard. SmartAsset's free tool matches you with fiduciary financial advisors in your area in 5 minutes. [READ MORE]( LATEST INVESTING NEWS FROM KIPLINGER.COM [7 Ways to Prepare for Higher Taxes]( [15 Best Vanguard Mutual Funds for Investors of All Stripes]( [The Psychology Behind Your Worst Investment Decisions]( [Don’t Automatically Annuitize an Annuity – Shop Around First]( [Sign Up for Kiplinger's Free Tax Tips E-Newsletter for Money-Saving Tax Planning and Tax Filing Compliance]( [Kiplinger] [Facebook]( [Twitter]( [LinkedIn]( Send this to a friend. [Click here.]( All content ©2021 The Kiplinger Washington Editors 1100 13th Street, NW, Suite 1000 Washington, D.C. 20005 Thank you for subscribing to Kiplinger's A Step Ahead, a free resource to help readers navigate the economic recovery from COVID-19. If you ever wish to stop receiving this service, please [click here to unsubscribe](.