‘I’m much more optimistic about 2022’

Count former US Treasurer Rosie Rios among the experts who see brighter days ahead for the US economy. If she’s right, that could be good news for businesses and shoppers.

“I’m much more optimistic about 2022 than 2021,” Rios, who served in that role in the Obama Administration from 2009 to 2016, tells CNBC Make It.

A series of problems stemming from the pandemic – including labor shortages, supply chain disruptions and rising inflation – hinder economic growth in 2021, and Rios admits that continued uncertainty around Covid-19, and variations like delta and omicron, could always send the country’s economy off track again.

“Clearly the pandemic is still out there. And who knows what other variations will come our way,” continued Rios. “But I think, broadly speaking, hopefully that optimism will materialize.”

Among the positive signs that Rios points to is an expected increase in consumer spending for the current holiday season, even to those who shop and related businesses about the effect of Rising inflation and supply chain problems. But what if holiday spending hits record levels? forecast of the National Retail Federation, which will help propel the economy forward into 2022.

Meanwhile, like everyone else, Rios keeps an eye on inflation, which increased in November when fastest speed in nearly 40 years and that means higher prices for consumers. On Wednesday, the Federal Reserve issued a forecast signal plan to tackle inflation with three rate hikes in 2022. However, Rios also points out that, despite its limitations, Inflation is not necessarily a bad sign for the economy.

“Inflation is also a sign that the labor market is tightening wages as well,” she said. It is true that average hourly wages in the US have increased this year, even though inflation has grow faster, which still makes it difficult for workers to keep up with rising prices.

Rios said there is “certainly a trade-off and a rebalancing will have to happen in the future” when it comes to controlling inflation but keeping wages improving to boost consumer spending in 2020. 2022. There is hope that Expected moves of the Fed could help control inflation next year.

In terms of the economy overall, she said, “the fundamentals are generally good for 2022.”

She’s not the only one feeling optimistic. Even with the inflation war raging, the Fed on Wednesday raised its forecast for US gross domestic product growth in 2022, from 3.8% to 4%. And large financial institutions like JP Morgan and Goldman Sachs expectation The stock market continues to rise in 2022.

More workers expected return to the workforce in 2022 as consumer spending continues to rise, which will help address the ongoing labor shortage. That’s good news for business owners, many of whom plan to hire more workers by 2022 – a factor of increased optimism, especially among small business owners, in the next year.

Of course, much of that optimism also depends on what happens next with the pandemic, especially when the Covid-19 omicron variant spread quickly. However, medical professionals tend to hope that next year will eventually bring pandemic to something like an end.

“I think there are still a lot of variables to consider when thinking about 2022 that we haven’t encountered,” said Rios.

However, the uncertainty still hasn’t stopped her from feeling confident about what’s to come, she said: “I’m really looking forward to 2022 [and] put 2021 behind us. “

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Sarah Ridley

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