Officials discuss 2022's economic forecast
The Chamber of Commerce for Greater Philadelphia discussed results from the Federal Reserve Bank’s economic forecast survey of Chamber members.
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Trends analyzed by economists and professionals show a recovering economy in early 2022, despite inflation remaining high and slowed employment growth.
On Friday, the Chamber of Commerce for Greater Philadelphia hosted a virtual event with key leaders discussing some of the trends that will likely shape the region in 2022 as it continues to move forward.
Patrick Harker, president of the Federal Reserve Bank of Philadelphia, sees positive results from local businesses' pandemic recovery efforts.
Harker says sales and retail remains strong, and that more than half of businesses have returned to pre-pandemic employment levels.
“The economy is improving,” said Harker. “I believe we are at or near full employment. Yes, we are down 3 million jobs from pre-pandemic levels, but it is not due to lack of demand, it’s a supply issue.”
He believes the pandemic simply accelerated already existing issues, such as a shortage of truck drivers, and retirement decisions.
A survey conducted by the Federal Reserve showed some factors that are contributing to unemployment include rejections of job offers due to compensation or remote work, and applicants who lack experience.
Harker also encouraged employers to “think creatively” in order to retain talent for their companies.
Phil Mackintosh, chief economist and senior vice president of Nasdaq, walked attendees through a series of data charts showing U.S. inflation trends and omicron’s effect on the stock market.
The omicron variant, according to Macintosh, is seen as a less substantial threat by the stock market to the economy. He sees the economy as close to being back to full speed.
“Inflation hit a dramatic 7% increase in the last year, according to the data. Next year’s levels are expected to be lower, but what’s driving inflation up right now is energy costs, vehicle purchases, and food supply-chain issues,” said Macintosh.
As consumers begin to move away from spending on “stuff” and return to pay for services, inflation will ease.
Mackintosh expects interest rates to remain high in 2022, with the potential of a slowed economy. However, he does not predict a recession at this time.
Philadelphia travel continues to see a slow recovery due to reduced international traffic and a pause on business travel, said Philadelphia International Airport CEO Chellie Cameron on Friday.
Cargo shipping at PHL has seen major growth throughout the pandemic, and the airport expects this trend to continue.