The Real Economy: December 2021
What to expect in the economy in 2022
THE REAL ECONOMY |
Authored by RSM US LLP
Nearly two years into the pandemic, there are signs that the worst of a once-in-a-century shock to the global economy is beginning to fade.
As the economy approaches a full reopening, we expect growth in 2022 will exceed 4%, the unemployment rate will fall to 3.5% and job growth will average roughly 230,000 per month.
All of this will happen as inflation slowly recedes from what we think will be a peak near 7% in 2021 to roughly 3% at the end of 2022, setting the stage for tighter monetary policy and a path back toward 2.5% growth in 2023.
While there is likely a wide range of possible outcomes linked to the omicron variant, we do not see a need to alter our growth forecast of 7.2% in the fourth quarter or the rate for 2022.
Other major wildcards in the forecast remain the direction of fiscal policy and the fate of the Biden administration’s proposed Build Back Better social spending program.
In this month’s The Real Economy, we examine the economic outlook for 2022. We also examine the outlook for trade policy; we introduce a new way to measure the deep impact of supply chain disruptions to the U.S. economy, and we look at the emerging iBuyers industry and its prospects.
This article was written by Joe Brusuelas and originally appeared on 2021-12-09.
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