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.