Economics in the News – Dec. 27, 2021 – Jan. 2, 2022
Economics impacts our lives every day. Below are some of the top storylines from this past week related to economics.
- What were some of the greatest cultural events of 2021 in the labor market and how will they continue to evolve into 2022? Inflation and a shift in workplace culture were highlighted in 2021.
Inflation increased at its fastest pace in 40 years, as product shortages have caused suppliers to raise prices. As the Omicron variant continues to threaten global supply chains, economists worry that inflation will continue to persist into 2022. A shift in workplace culture continued into 2021, as many of Generation Z first entered the workforce, many workers have decided not to go back to work, and more businesses continue to shift to hybrid work models to offer location flexibility. [The New York Times]
- Economists are tempering expectations for economic growth during the early portion of 2022, as consumers choose to stay home to avoid exposure to the Omicron variant. One forecast from Moody’s chief economist Mark Zandi downgraded his forecast for Gross Domestic Product (GDP) in the first quarter to 2.2 percent growth from 5.2 percent.
A sharp rise in cases has disrupted parts of the economy. The Centers for Disease Control (CDC) recommends that infected people who are asymptomatic to isolate for five days – a decrease from 10 days from earlier in the pandemic. Despite the forecast for the beginning of 2022, the Federal Reserve expects the United States economy to grow four percent for the year. [The Wall Street Journal]
- The gambling industry boomed in 2021. Gambling revenue surpassed $44 billion for the year with many states yet to report November and December figures. Nevada’s casinos enjoyed their best year ever with $12.3 billion in revenue. Meanwhile, 25 states that allow commercial gambling saw revenue increase from prior to the pandemic.
The boom is due to consumer savings, the rebound of leisure travel and the return of international flights. Sports and online betting are the fastest-growing segments of gambling but only account for 15 percent of the gross gaming revenue nationally. [The Washington Post]
- The rapid spread of the Omicron variant is taking its tolls on businesses, as workers and consumers stay home in an attempt to avoid getting sick. The number of new COVID-19 infections has surged in recent days, causing store closures due to staffing challenges, canceled flights and workers working overtime.
Airlines were forced to cancel more than 1,000 flights each day over the weekend, according to FlightAware. Rising COVID-19 infections among crew members hampered the airlines ability to staff flights, just as holiday travel was rebounding to pre-pandemic levels. Supermarket operators expect increased absences among cashiers, stockers and other employees, with many supermarkets depending on workers to work overtime. [The Wall Street Journal]
- The United States stock markets closed 2021 with a third consecutive year of growth. As the nation faces challenges on the economic front heading into 2022 with soaring inflation and a recovering labor market, corporate profits aided a strong 2021 bolstered by consumer spending.
Investors had a healthy appetite for risks in 2021, propelling more speculative areas of the market. Younger investors were more willing to invest in higher-risk investments, such as cryptocurrencies. [The Washington Post]