As we near the end of the 1st quarter, let’s assess where the overall economy stands.
Why it matters: Growth estimates have come down recently because of the fallout from Russia’s invasion of Ukraine.
- And although it seems a distant memory, the Omicron wave constrained the economy in early January.
Be smart: As we reported last week, retail sales were strong in January and February. Further, job gains and wage growth have been solid.
- Right now, we are forecasting 1.6% growth in this quarter, which is way down from the 7% growth in Q4 of 2021 and the 5.7% growth for the full year of 2021.
- However, some more positive data in the next few days could drive that forecast higher.
Looking ahead: For the remainder of the year, growth will hover around 3%. We are also predicting 3% growth for the year as a whole.
- This is down almost half from 2021, but it’s important to remember that 2021 was a bounce back year from a COVID-ravaged 2020. If we had said in January of 2020 that growth in 2022 would be 3%, most other analysts would have said we were much too optimistic.
The bottom line: Given all that’s been thrown at the economy the last few years, if we get 3% growth this year it will be a win.
—Curtis Dubay, Senior Economist, U.S. Chamber of Commerce |
