RL098 – 2022 Economic and Market Outlook
In today's episode of the Retirement Lifestyle Show, Roshan Loungani and Erik Olson preview market and economic trends to look out for going into 2022. They dissect labor market projections, inflation forecasts for the new year, and the 2022 fixed income & bond market outlook.
[02:32] Predictions for the New Year 2022
[05:34] Economic Outlook for 2022
[06:50] Inflation Forecast for 2022
[17:50] Policy, Politics, and Inflation
[21:00] Predicted Effects of the Pandemic on the Economy
[29:30] Labor Market Trends That Will Shape 2022
[33:20] Data on Young Men Labor Participation
[35:34] Travel and Leisure Industries Going Into 2022
[37:30] 2022 Bond Market Outlook
[39:10] The Future of Small Businesses in a Post-Pandemic World
[44:10] Bond Yield and Price Drivers
[50:30] Why Most Market and Economic Predictions Are Never On Point
[54:50] Bond Interest Rates and the Fed
[57:20] Biotech Trends to Watch in 2022
[59:19] Government Infrastructure Plans Going Into 2022
[01:01:03] Parting Thoughts
For more links and the full show notes keep scrolling down!
Roshan Loungani can be reached at roshan.loungani@aretewealth.com or at 202-536-4468.
Erik Olson can be reached at erik.olson@aretewealth.com or 815-940-4652.
Adrian Nicholson can be reached at adrian.nicholson@aretewealth.com or at 703-915-8905.
Listen now to hear us discuss 2021 What A Year Indeed.
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Full Show Notes:
Economic and Market Outlook for 2022
As you all probably already know, parts of the economy and markets are out of balance as we usher in 2022. For example, there's high demand for skilled labor, given that supply is on the lower end of the spectrum. Further, the gradual phasing out of the stimulus packages enacted to combat the pandemic's effects will inevitably pose a new challenge for both the economy and the financial markets.
Right at the end of 2021, the GDP growth rate stood at 5%. However, going into 2022, most financial analysts predict a return to normal growth rates of about 3.3%. The good news is that the global economic recovery is likely to continue into 2022.
On the other hand, global inflation, categorized by consumer prices trending higher across most economies, will persist well into 2022. However, a return to 1970s-style inflation is not something we see happening. When analyzing the financial markets, low bond yields, reduced or limited policy support, and stretched valuations are things we should keep track of going into the new year. All in all, predictions are just predictions, and most of the time, they rarely manifest in real life. Whether you choose to follow predictions or not, it's always a good idea to have an idea of what to expect in a new year.
Labor Market Trends Going Into 2022
One of the most intriguing storylines that made headlines in 2021 was the unprecedented state of the labor market. Industries came face to face to terms like "The Great Resignation." Businesses that were eager to reopen after shutdown policies were lifted could not hire enough staff to meet the demand, no matter how much they offered to pay. The labor market, especially for restaurants, has been a major concern in a lot of industries. Firstly, the labor force is shrinking. This is because some working-age adults are not actively seeking employment and most people close to retirement chose to retire early when the pandemic hit almost two years ago. Projections for 2022 reveal that the labor markets will continue to tighten now that most major economies are quickly approaching full employment.
All opinions expressed by podcast hosts and guests are solely their own. While based on information that they believe is reliable, neither Arete Wealth nor its affiliates warrant its completeness or accuracy, nor do their opinions reflect the opinion of Arete Wealth. This podcast is for general informational purposes only, and should not be regarded as specific advice or recommendations for any individual. Before making any decisions, consult a professional.