Looking Ahead in 2022: Economic Challenges for the New Year
As the U.S. economy enters the new year, it faces a new set of challenges — but that doesn’t mean that the lessons from 2021 are no longer relevant. Over the past year, Morning Consult’s economic research team has drawn on our proprietary high-frequency economic data to track the economic recovery, identifying inflection points, building an integrated narrative and offering businesses and policymakers actionable insights along the way.
Several central themes emerged in 2021 that are likely to continue to shape how we view the economy: Labor supply constraints began sooner and persisted longer than expected, acting as a headwind to economic growth and in July prompting us to dive deep into emerging labor market trends, including the underlying causes preventing Americans from looking for work. The generosity of unemployment benefits emerged as a key deterrent to job-search activity, but so did health concerns and other family obligations.
With the benefit of high-frequency global data, in late September we also identified a fundamental change in the relationship between COVID-19 cases and economic activity. This “newfound resilience” allowed consumers to continue shopping, while businesses were able to retain workers in the face of record-high case counts. The lessons we learned from the economic response to the delta variant continue to inform how we think about the likely impact from omicron, as well as any future variants.
Inflation and supply chain disruptions drove much of our analysis throughout the year. We tracked rapid and persistent weekly increases in inflation expectations, allowing us to identify a turning point in October when inflation expectations stabilized. We also aggressively followed the severity and impact of supply chain disruptions on consumers and their purchasing habits. By November we saw light at the end of the tunnel, with supply chain disruptions starting to ease and younger consumers adapting their purchasing behaviors.
We have been tracking the disparate impact of the pandemic across the different demographic groups since the K-shaped recovery in May 2020. The Morning Consult / Axios Inequality Index provides compelling evidence for the impact of policy interventions in mitigating economic inequality during the pandemic.
In our January 2022 U.S. Economic Outlook Report, we highlight the ways in which our outlook will continue to be shaped by the themes of last year, but also show how changes in economic policy fundamentally alter our approach to assessing economic risks.
Looking ahead, mass unemployment or a shutdown of in-person activities appear less likely than they were last year. However, policy changes mean that the economic consequences of such outcomes would be more severe. Millions of Americans have exhausted eligibility for unemployment insurance benefits, and the federal eviction moratorium expired in August.
If the pandemic drives widespread layoffs yet again, Americans will struggle to pay their bills, potentially prompting a higher incidence of missed payments and consumer defaults than we’ve seen since the pandemic began.
A slower global economic recovery also poses growing risks to the United States. In China, confidence has declined in recent weeks amid COVID-19 outbreaks and growing housing market weaknesses. Prolonged lockdowns or business closures in China will likely exacerbate ongoing supply chain disruptions in the United States.
While the future remains uncertain, the need for global, high-frequency economic data is even more pressing.We remain committed to providing Morning Consult’s community of readers, subscribers and clients with best-in-class economic analysis derived from world-class data.
Morning Consult Economic Research Team
John Leer leads Morning Consult’s global economic research, overseeing the company’s economic data collection, validation and analysis. He is an authority on the effects of consumer preferences, expectations and experiences on purchasing patterns, prices and employment.
John continues to advance scholarship in the field of economics, recently partnering with researchers at the Federal Reserve Bank of Cleveland to design a new approach to measuring consumers’ inflation expectations.
This novel approach, now known as the Indirect Consumer Inflation Expectations measure, leverages Morning Consult’s high-frequency survey data to capture unique insights into consumers’ expectations for future inflation.
Prior to Morning Consult, John worked for Promontory Financial Group, offering strategic solutions to financial services firms on matters including credit risk modeling and management, corporate governance, and compliance risk management.
He earned a bachelor’s degree in economics and philosophy with honors from Georgetown University and a master’s degree in economics and management studies (MEMS) from Humboldt University in Berlin.
His analysis has been cited in The New York Times, The Wall Street Journal, Reuters, The Washington Post, The Economist and more.
Kayla Bruun is a senior economist at decision intelligence company Morning Consult, where she analyzes consumer spending, inflation and household finance trends, leveraging the company’s proprietary high-frequency data.
Prior to joining Morning Consult, Kayla was a key member of the corporate strategy team at telecommunications company SES, where she produced market intelligence and industry analysis of mobility markets.
Kayla also served as an economist at IHS Markit, where she covered global services industries, provided price forecasts, produced written analyses and served as a subject-matter expert on client-facing consulting projects.
Kayla earned a bachelor’s degree in economics from Emory University and an MBA with a certificate in nonmarket strategy from Georgetown University’s McDonough School of Business.
Jesse Wheeler is a senior economist at decision intelligence company Morning Consult, where he delivers insights on economic and geopolitical trends impacting the United States and major global markets.
Prior to joining Morning Consult, Jesse worked as an economic and political risk analyst at MUFG Bank, where he focused on U.S. fiscal, monetary and foreign policy, and at Fitch Solutions, where he conducted macroeconomic research and forecasting for Latin American markets.
Jesse received a bachelor’s degree in history and environmental science from the University of South Carolina and a master’s degree in international economics from George Washington University.