Predictions for 2022
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. That initially seemed like a lot, so I assigned half the predictions to Zack (I know what you’re thinking, and don’t worry: if his predictions turn out better than mine, I’ll fire him). But then I got a second wind and, reemerging with the suddenness of a new COVID variant, made 22 predictions anyway.
As a reminder, I recently announced that I’m expanding Economics by Anirban (you can read about it here). In short, paid subscribers will get a variety of new content, including a Week in Review post most Fridays (starting in mid-January). Today (12/23) is the last day to get the early supporter discount of 33% off your first year (just $100 for an annual membership or $10/month for a monthly membership).
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.
Zack’s Predictions for 2022
Wondering “who’s Zack?” I work for (with?) Anirban. If you think of him as James Bond, I’m Q. If you think of him as more of a Gomez Addams, I’m Lurch. Alfred to Batman, Samwise to Frodo, Vader to Palpatine. You get it.
Are my predictions perfect? Probably not. Are they better than Anirban’s? You bet.
Nonfarm payroll employment will reach full recovery (February 2020 levels) by November 2022 (which will require about 355k new jobs per month from here on out).
The unemployment rate will hit 3.2%.
QR codes will, against all odds, continue to become more popular, which is fine, except for when they’re used at a restaurant to pull up the menu on your phone. No one wants to start a dining experience staring at their phone.
“Fully vaccinated” will require a fourth booster shot by the middle of 2022.
The WHO won’t identify another variant of concern (beyond omicron) by the middle of 2022.
The U.S. won’t authorize a variant-specific COVID booster during 2022.
The U.S. Economic Policy Uncertainty Index will remain below 175. For reference, it climbed above 200 in March 2020, stayed there until January 2021, and has since hovered between 153 and 125. Before the pandemic, the last time it went over 175 was August 2019, when trade war tensions with China came to a head and POTUS canceled a state visit to Denmark because they wouldn’t discuss selling us Greenland (the latter didn’t move the needle on uncertainty, but it’s a fun anecdote from a simpler time).
Inflation (as measured by CPI-U) will keep rising at 3%+ annual clip.
Spending on goods will remain elevated relative to spending on services.
The murder rate will fall (in aggregate) across the 25 largest U.S. cities.
The rate of people teleworking will increase relative to 2021 levels.
This will be my last post of 2021. I’ll send out an email asking for questions for the January 2022 Q&A post early next year (only available to paid subscribers), and the next jobs report post will come out on January 7 (available to all subscribers).
My 2022 presentation is called No Time to Buy, and yes, the theme is James Bond. If you want to book a presentation (in person or virtual), please contact my assistant Julia (email@example.com).
A last (last) reminder: this newsletter is expanding, and those who become paid subscribers will get a variety of additional content. If you’ve already subscribed: 1) thank you and 2) feel free to gift Econ by Anirban to your loved ones; Us Weekly named a subscription to Econ by Anirban 2021’s Sexiest Christmas Present Alive.