US Economy Expected to Grow in 2022
Despite the uncertainty posed by the new coronavirus variant, the US economy ended 2021 on a high with rising consumer spending and falling unemployment. And according to the US Economic Outlook published by The Conference Board in December, the Omicron variant doesn’t seem to have dampened spirits for the coming year either.
The business research group, which said that US Real GDP growth for 2021 would come in at 5.6% year-over-year, expects further growth even beyond 2022.
These optimistic predictions marked a departure from just a few months ago when the New York Federal Reserve reported that the household debt surpassed $15 trillion, the highest rise in 14 years. At the same time, mortgages rose 2.2% to nearly $10.7 trillion, and auto loans totaled $199 billion.
The Conference Board predicts that the US economy will grow by 3.5% in 2022 and 2.9% in 2023, year-over-year. The Conference Board isn’t the only organization with positive predictions. Goldman Sachs predicts growth of 3.8% for 2022, while the Bank of America forecasts 4% growth. That said, if these forecasts are fulfilled and the economy expands between 3.5% and 4%, it will still mark a downturn compared to 2021. Nevertheless, these growth rates would pave the way for a strong economy.
One of the things that boosted the economy and helped create this positive outlook was the rise in holiday sales. Holiday sales rose by 10.7% compared to the pre-pandemic 2019 holiday period, marking the highest increase in the past 17 years. While some stayed home and shifted their spending to e-commerce, others hit the brick-and-mortar stores looking for new clothes, jewelry, and electronics.
A broader picture of holiday shopping habits will be known once the National Retail Federation publishes its combined two-month results in mid-January. The results will include an analysis of the November and December sales figures from the Commerce Department.
Albert Einstein is said to have identified compound interest as mankind’s greatest invention. That story’s probably apocryphal, but it conveys a deep truth about the power of fiscal policy to change the world along with our daily lives. Civilization became possible only when Sumerians of the Bronze Age invented money. Today, economic issues influence every aspect of daily life. My job at Fortunly is an opportunity to analyze government policies and banking practices, sharing the results of my research in articles that can help you make better, smarter decisions for yourself and your family.
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