It’s almost 2022, which means it’s time to gaze into the crystal ball (bought in Milwaukee back in ’08), read some tea leaves, and try to jot down some predictions that don’t come back to haunt me this time next year.
For 2021, I did 21 predictions (you can read my grades here), and that means I need to come up with 22 predictions for 2022.
My Predictions for 2022
- Inflation (as measured by CPI-U) will be worse during the first half of the year than the second.
- More people will jump back into the labor force, with the labor force participation rate climbing back above 62%.
- The first quarter will fall short of current growth expectations, due largely to omicron (<3.5%).
- The second quarter will see a pickup in growth, due in part to inventory rebuilding (>3.5%).
- U.S. growth will be in the range of 2% to 4% for the year.
- The U.S. dollar will hold its own against the Canadian dollar, yen, and euro.
- Public nonresidential construction spending will increase at a faster rate than private nonresidential construction spending, which will struggle to grow in inflation-adjusted terms.
- China’s economy will underperform expectations, expanding less than 5.4% for the year.
- There will be a pullback in retail spending by the second half of 2022.
- The number of available, unfilled jobs will remain high, but will be consistently below 11 million for much of 2022.
- The U.S. will set a record for mergers and acquisitions in 2022, with many coming in financial services and construction.
- There won’t be nearly as many ships waiting to unload their wares off the coast of California.
- There will be many more new cars available on dealer lots (as measured by Cox Automotive).
- Bitcoin will struggle.
- Restaurant reservations will consistently sit above pre-pandemic levels by mid-2022 (as measured by OpenTable).
- You will begin to see many Rivians on the road. Because I have tremendous restraint and a limited budget, I won’t be driving any of them.
- Business investment will be on the rise.
- The back half of 2022 will witness significant commodity price declines (as measured by PPI).
- Increases in construction input prices will be much less profound compared to 2021 (as measured by PPI).
- Office construction will remain weak.
- Single-family housing construction will emerge as one of the economy’s strongest segments.
- You will go a full day without seeing anyone wearing a mask.
About the Author
Economist Anirban Basu is Chairman & CEO of Sage Policy Group. You can find more economic insights from Basu at basu.bluestack.com.