Nazarene University of Point Loma
Inflation: The economy is at a crossroads in determining whether the recent acceleration in prices fits into inflation expectations. If higher inflation starts to raise price and wage expectations, companies could continue to raise prices, while workers could demand larger increases. The Federal Reserve would respond with interest rate hikes that could chill financial markets and the economy. On the other hand, a fall in inflation could allow a positive outcome in 2022.
San Diego Institute for Economic Research
Inflation: Inflation will get worse before it gets better with a considerable loss of purchasing power for the dollar to come. Distributing manufactured billions of dollars while limiting economic output inevitably causes significant inflation. This is not transient nor the result of supply chain disruptions and greedy companies that arbitrarily raise prices. A bear market in financial assets is certain by reducing the QE (quantitative easing) stimulus. Restrictive monetary policies to fight inflation will slow GDP, wage growth and even job creation.
Use: As long as people who want to work or need to work find satisfying, well-paying jobs, I think all other metrics are interesting but are rounding errors. For the next six months, it will continue to be a job market for employees. No one needs to stay in a job they don’t like, work for a salary they feel is unfair, or be able to say that there aren’t good jobs there. The Great Resignation is real.
Mother Counselors of London
Use: We are witnessing the most cataclysmic year in history of how and why people are employed. There are fundamental shifts taking place in the employment ecosystem, including people who turn down a job and retire temporarily or permanently; people moving from low-paid and low-skilled jobs, mainly in services, to well-paid jobs involving retraining in other sectors; technology / robots replacing certain jobs; low immigration rates insufficient to fill the gaps; and employees becoming floating contractors.
University of San Diego
The price of oil: Due to its impact on gas prices, the price of oil will have a big impact on inflation over the coming year. OPEC has indicated that it will continue to gradually ramp up its production, which should help moderate oil prices. US production is hampered by the 2019-2020 collapse of the oil shale industry. The big question nationally is whether investors will invest more money in the industry after losing around $ 500 billion during the hydraulic fracturing boom.
RA Rauch & Associates
Inflation: It is essential to verify whether inflation is accelerating faster than productivity growth. If this happens, wages cannot keep up with prices and it will have a huge impact on consumers. If inflation goes beyond the comfort zone of consumers today and stays that high, we will have even more uncertainty in the market. If wages don’t keep up with childcare costs and other procurement costs, that will be a real concern.
Labor market participation rate: Two million Americans left the workforce with COVID and did not return, with some opting for early retirement rather than the hassle of work in today’s environment. If higher wages and better conditions can get some of these people back to work, it will significantly boost GDP and help alleviate supply issues that contribute to inflation.
Inflation: The global supply chain issues uncovered by the pandemic will continue to challenge businesses for the foreseeable future. Labor costs are rising as the pandemic transforms our ability and willingness to do certain jobs. As the economy miraculously continues to grow, these costs translate into more expensive goods and services. It is not clear whether these price spikes will be temporary or the repercussions of the Fed’s interest rate change in an attempt to suppress their assent.
Jacobs Center for Neighborhood Innovation
Do not participate this week.
Chris Van Gorder
I would say that employment indicators – including the unemployment rate and non-agricultural job offers – are important statistics to watch in 2022. Wage pressures caused by the current imbalance of labor supply and demand as well as escalating supply costs have dramatically increased spending on operating many businesses. Ultimately, these costs will be passed on to consumers in the form of higher prices, eroding purchasing power and reducing demand for goods and services.
University of San Diego
10-year Treasury bills: These will drive up other interest rates at the same time and affect consumption and consumer debt decisions. If the interest rates announced by the Fed and the decrease in bond purchases actually occur, interest rates will rise. Rather than stopping inflation, these actions could simply reduce the rate of GDP growth. I will also be monitoring the employment data as we continue to have 11 million unfilled jobs and we are expected to hire at a faster rate.
Consumer price index: CPI is the standard measure of inflation used in US financial markets. The CPI rose 6.8% from November 2020 to November 2021, the largest 12-month increase in 39 years and over. Supply chain constraints, rising costs of basic commodities and housing, and a chronic pandemic continue to influence the rate of inflation to rise. To combat it, the Federal Reserve would have to end its stimulus program and raise interest rates at least three times this year. Inflation was supposed to be transient, so the CPI is a good one to watch this year.
San Diego State University
Inflation: After decades of low and stable inflation, the US economy in 2021 experienced rates not seen since the early 1980s. For example, in November, the CPI rose 6.8% over the last year. It is now increasingly clear that higher inflation rates will persist longer than initially expected. Its evolving trends in 2022 will impact long-term interest rates and influence the brutality with which the Federal Reserve changes its stance on monetary policy.
Labor market participation rate: The recent phenomenon dubbed “The Great Resignation”, where people quit by the millions and drop out of the workforce, will have a profound effect on the ability of companies to fill vacancies. This phenomenon, compounded by the fact that large numbers of people are taking early retirement due to the COVID disruption, will pose challenges for employers in the coming year as they struggle to stay competitive with a shrinking and perhaps more expensive labor pool.