2022 Economic Forecast (CONT’D FROM PAGE 30)
quarter of 2022 as the effects of past fiscal stimulus fade away. (The Core PCE Price Index excludes energy and food prices and is the Federal Reserve’s preferred mea- sure of inflation). Businesses should watch for any higher levels of persistent inflation that might cause the Fed to increase interest rates—a move Moody’s Analytics does not anticipate before 2023. Yet another leading indicator will be the return-to-work trend. “More people getting back on the job would confirm a strong 2022,” says Conerly. “Are employers getting the workers they need? Are people earning more money to spend?” Finally, a nonfinancial force may be more important than anything else. “The damage done by the Delta vari- ant has taught us that the pandemic is still alive and has the potential to disrupt economic activity,” says Hoyt. “Ear- ly in 2022 the leading data will be about COVID-19. What are the trends in vaccination rates? Infections? Hospitaliza- tions? Deaths?” Favorable answers bode well for a robust year.
months of 2021, though, the attitude of the American pub- lic was surprisingly unsettled. “It really is difficult to get a good sense of consumer confidence in the current envi- ronment,” says Hoyt. One reason, of course, is the unclear path of the pandemic. But another is the recent spike in fuel prices, sparking fears of inflation.
Phillip M. Perry is an award-win- ning business journalist whose byline has appeared over 3,000 times in the nation’s business press. Contact him at phil@ pmperry.com
How the public reacts to the shape-shifting virus should be more apparent in the opening months of 2022. So should changes in the currency’s purchasing power. “In- flation will be the key financial statistic to follow early in the year,” says Yaros. Moody’s Analytics calls for the Core PCE Price Index to moderate to 2.2 percent in the fourth
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