The world is turning the page on 2021 and welcoming 2022, leading to an assessment of the last 12 months and looking ahead to the next 365 days.
Article by Andrew Moran from our premium news partners at The Epoch Times.
Over the last year, the economy was dominated by a handful of developments: inflation, a global supply chain crisis, the Delta and Omicron variants, trillions in fiscal spending, and easing of monetary policy.
In November, the U.S. annual inflation rate clocked in at 6.8 percent, a 39-year high. The personal consumption expenditure price (PCE) price index, the Federal Reserve’s favorite inflation gauge, climbed 5.7 percent, the highest in nearly 40 years.
Official inflation data from the Bureau of Labor Statistics (BLS) show that higher prices are being felt across the board, from food to energy to consumer goods.
It might have been a different Christmas shopping experience than what many shoppers are accustomed to at this time of the year. Whether it was a scarcity of products or surging prices, the international supply chain crisis impacted the holiday season in 2021.
A historic traffic jam at Chinese and U.S. ports, a backlog of shipping containers, public health restrictions, a truck driver shortage, and soaring simultaneous worldwide demand contributed to shoppers altering their gift-giving plans. But the supply chain fiasco has affected more than just buying a child’s favorite toy.
The situation has added to the energy crunch witnessed across Europe and Asia, forcing these markets to ramp up coal production and eat into their crude strategic reserves.
America’s labor market has been a mixed bag in 2021.
The U.S. economy is still short between four and six million jobs from before the pandemic, though job openings are close to an all-time high of 11 million. Average hourly earnings increased at an annualized rate of 4.8 percent in November to 31.03, but real wage growth has been eliminated in most sectors due to escalating inflation. In addition, first-time jobless claims are at a pandemic low, while the labor force participation rate is at a 45-year low of 61.8 percent.
The financial markets panicked when the World Health Organization (WHO) called an emergency meeting to discuss a new COVID-19 variant. Many analysts warned that a new strain could weigh on the economic outlook, be it retail trade activity or crude oil demand.
While Delta has affected the economy this year, Omicron has triggered some consternation about the global economic recovery in the home stretch of 2021. Public health experts assert that it is still too early to judge the severity of Omicron, but investors and policymakers have been worried, leading to sharp selloffs in the financial markets and renewed pandemic-related restrictions.
Across the globe, central banks have started to taper their quantitative easing measures that were established to cushion the economic blows from the coronavirus.
The Federal Reserve began trimming its $120-billion-a-month stimulus and relief efforts, with the Federal Open Market Committee (FOMC) also anticipating at least three rate hikes next year.
The Bank of Canada (BoC), the Bank of England (BoE), and the European Central Bank (ECB) joined the tapering bandwagon. However, the BoE moved on interest rates before many of its Western counterparts, hiking the benchmark rate to 0.25 percent, surprising many market observers.
The U.S. government approved trillions of dollars in new spending this year, including the $1.9 trillion stimulus bill in March and President Joe Biden signing off on a $2.5 trillion debt ceiling bill.
Although the House voted for the $1.75 trillion social-spending and climate change investment Build Back Better Act, the legislation’s future is in jeopardy in the Senate. Senator Joe Manchin confirmed he would not vote for the bill, leaving many left-leaning officials on Capitol Hill doubtful that it will make its way to the president’s desk in the New Year.
Despite the numerous setbacks in the United States, surveys suggest that the economic recovery might be poised for a strong finish in 2021.
Durable goods orders surged at a better-than-expected 2.5 percent, new home sales advanced 12.4 percent in November, and the Conference Board’s Consumer Confidence Index climbed much higher than what the market had expected: 115.8 versus 110.8.
“The American economy is closing out 2021 on a high note,” said TD Economics in a research note.
Reading the Tea Leaves in 2022
From Omicron fears to President Biden’s $1.75 trillion spending initiative potentially on its knees, financial institutions have lowered their 2022 economic outlooks.
Goldman Sachs was one of the first major Wall Street firms to slash its forecasts for the U.S. economy over the next year, citing “modest downside” from the new variant.
The Wall Street giant projects that the U.S. gross domestic product will expand by 2.9 percent in 2022, down from its previous estimate of 3.3 percent.
“While many questions remain unanswered, we now think a modest downside scenario where the virus spreads more quickly but immunity against severe disease is only slightly weakened is most likely,” said economist Joseph Briggs in an update.
Mark Zandi, the chief economist for Moody’s Analytics, thinks “the economic recovery will be vulnerable to stalling out,” writing on Twitter that he anticipates real GDP growth will be 0.5 percent lower if the Build Back Batter Act cannot get passed.
Others aver that it could be too premature to determine if Omicron will play a critical role in the broader economy in the next calendar year.
“It is simply too earlier for it to show in activity data,” stated Jefferies economist Aneta Markowska in a weekly note.
On the inflation front, it is widely expected that inflation will be elevated, though many polls of economists suggest higher prices could ease later next year, with price pressures easing.
James Knightley, the Chief International Economist at Think ING, stated that the Federal Reserve believes the factors contributing to a near four-decade high inflation rate, such as supply chain disruptions, and labor market shortages, could dissipate throughout next year.
“But we are not so sure,” Knightley said.
“Firms have millions of job vacancies to fill so competition to find workers with the right skill set will remain intense. Demand-supply issues are a global phenomenon with semiconductor producers warning shortages could last through 2023. In an environment of strong demand, record order backlogs and ongoing supply constraints, cost increases can continue to be passed onto customers.”
According to the latest Federal Reserve Bank of New York’s (FRBNY) Survey of Consumer Expectations, many Americans are penciling in red-hot inflation for 2022: 6 percent, up from 5.7 percent in October.
Market analysts and economists will be paying attention to the scaling back of monetary policy and its impact on the financial markets and the overall economy.
Since 2022 is an election year and the Democrats are trying to hold onto the House and Senate, experts purport that the president will need to convince the public that the country is on the right track. So far, the polls show that most Americans think the opposite is unfolding before their eyes.
Will America-First News Outlets Make it to 2023?
Things are looking grim for conservative and populist news sites.
There’s something happening behind the scenes at several popular conservative news outlets. 2021 was bad, but 2022 is proving to be disastrous for news sites that aren’t “playing ball” with the corporate media narrative. It’s being said that advertisers are cracking down, forcing some of the biggest ad networks like Google and Yahoo to pull their inventory from conservative outlets. This has had two major effects. First, it has cooled most conservative outlets from discussing “taboo” topics like Pandemic Panic Theater, voter fraud, or The Great Reset. Second, it has isolated those ad networks that aren’t playing ball.
Certain topics are anathema for most ad networks. Speaking out against vaccines or vaccine mandates is a certain path to being demonetized. Highlighting voter fraud in the 2020 and future elections is another instant advertising death penalty. Throw in truthful stories about climate change hysteria, Critical Race Theory, and the border crisis and it’s easy to understand how difficult it is for America-First news outlets to spread the facts, share conservative opinions, and still pay the bills.
Without naming names, I have been told of several news outlets who have been forced to either consolidate with larger organizations or who have backed down on covering certain topics out of fear of being “canceled” by the ad networks. I get it. This is a business for many of us and it’s not very profitable. Those of us who do this for a living are often barely squeaking by, so loss of additional revenue can often mean being forced to make cuts. That means not being able to cover the topics properly. Its a Catch-22: Tell the truth and lose the money necessary to keep telling the truth, or avoid the truth and make enough money to survive. Those who have chosen survival simply aren’t able to spread the truth properly.
We will never avoid the truth. The Lord will provide if it is His will. Our job is simply to share the facts, spread the Gospel, and educate as many Americans as possible while exposing the forces of evil.
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JD Rucker – EIC