2022 Rates: All The Way Up!
Updated: Feb 8, 2022
Soaring inflation, tightening cargo capacity, and a shrinking labor market only add up to one thing for today’s global logistics managers: the triple whammy.
Late last year, analysts at IHS Markit revised their 2021 U.S. real GDP forecast up to 5.7% based on some surprising, late-year bursts of trade activity.
“GDP growth will surge to 7.1% in 2022, driven by a rebound in vehicle production and unexpected strength in exports and inventory investment,” says Joel Prakken, chief U.S. economist and co-head U.S. economics at IHS Markit. “The transition from COVID-19 to endemic will support continued expansion into 2022, even as pandemic-era fiscal support wanes.”
Chris Varvares, co-head of U.S. economics at IHS Markit, notes that near-term price and cost pressures will push inflation to 3.7% in 2022, after which he expects inflation to subside close to the Fed’s long-run 2% objective.
Both analysts contend that too little is yet known about the Omicron strain of the coronavirus to directly adjust their projections of growth and inflation. However, the forecast does incorporate asset values and oil prices that reflect the “new uncertainties.”