Live with Jackie Greene, 2022 Jobs & Labor Forecast
2022 Economic Forecast
Jackie Greene believes the upcoming year 2022 will be a year of slowing growth, compared to 2021. While economic growth hit a record high of demand this past year, Greene suggests it was mainly due to the fact we were coming off the first year of the pandemic. Admittedly some of this growth was natural, the pace is unsustainable because many companies will be unable to keep up with future demand.
The economy experienced a 5.3% growth by the end of the 2021 year. While still growing, 2022 will be slower – 2.8% growth and 2023 is expected to end with 1.6% growth. This was reported by a recent ITR Trend Report.
The question hanging over managements’ heads is that if we still have continued growth, will the supply chain ever be able to catch up?
Before we get there, you might also ask who is ITR Economics and why should you care?
What is ITR Economics
ITR Economics is the oldest privately held broadcasting firm in the country, being over 70 years old. Jackie Greene is a 16-year veteran analyzing economic information on how it impacts businesses and consumers’ daily lives. Why should you pay attention? Because ITR Economics has a labor forecast record of 99% accuracy since 1987 and employment trends accuracy of 99% in the years of 2018 and 2019 (although it dipped to the mid-90s in 2020.) That is still remarkable considering an unanticipated economic lockdown!
Jobs and Labor Shortage
While we are just days away from a new year, everyone wants to know what we can expect in 2022. Will businesses still struggle to fill open positions? Will workers continue to quit jobs and reshuffle careers? Besides the threat of COVID and its variants, what economic and labor trends should we be watching? Which industries are thriving or stalling?
According to Greene, employee shortages will continue going into the new year, largely due to the fact the labor shortages trend started long before the start of the pandemic. The pandemic didn’t cause the shortages. It only intensified and accelerated them. Fortunately, the rate of shortages will likely go down because our rate of economic growth will go down. But shortages are shortages and an abundant supply of labor is not forecast in the near future.
Another key factor in assessing talent is location. Many reqions simply don’t have the supply of laborers needed compared to other areas. For professional non-labor jobs, this is not an issue because employers can now hire employees from anywhere. If they have the skills you need and don’t need to be in the office, hire from anywhere completely upends traditional recruiting and hiring strategies. Greene suggests this is contributing to job poaching – high levels of resignations in one market or one industry due to hiring in another.
Interest and Inflation Rates
In short, we can expect inflation rates and interest rates to go up due to the unintended consequences of stimulus money. Provide the public with a lot of money and it will naturally create an increase in demand and prices. We also can’t ignore that both inflaction and interest were likely to rise anyway due to trades and tariffs. Add to this, wage inflation – the highest levels in 20+ years. The effect of automation and AI will also contribute to fluctations.
One fear facing manufacturing, healthcare, restaurant, and othe rlabor intensive workers is when and how much automation will impact their jobs. Greene believes the introduction of technology will eliminate insufficient work but also open the door to new labor opportunities. “Technology won’t take your job” but workers who are able to perform the job with technology will..
Ira Wolfe, host of Geeks Geezers Googlization noted how technology likely saves millions of jobs and lives. Without technology, tens of millions of workers wouldn’t have been able to work from home and we likely wouldn’t have had a vaccine in record time. The results would have been more infections, more hospitalization, and even more deaths. Without technology the COVID-19 pandemic would have been a lot worse. Greene believes that technology will continue to move us forward and play a pivotal role in terms of growth and disruption.
What trends should we be watching? Greene says, “the impact of the current infrastructure bill.” ITR analysis says it will playy a huge role long term but not to expect an immediate and instant impact. The bill will take some time to be put into place. The bill also focused on certain economic segments more than others, such as transportation and utilities. With the bill being stretched out over an 8 year period, impact will be gradual.
An answered question is also how the bill will impact labor? If constuction and manufacturing are always struggling to fill open jobs, what will the stimulus do? Where will the workers come from? How will it impact other industries? “Think long term,” reiteates Greens, “Don’t just think about today and tomorrow, but next month and next year.” According to Greene, investment in training and educating workers for higher skilled jobs will be essential.
“In terms of 2022-23, expect slow growth… we’ve had a gangbusters year of 2021 here” (Greene, 00:09:20)
“Economically we’re getting back to normal. Part of what caused some of that extreme growth in 2021 was all the stimulus spending… we had so much disposable income we were buying goods” (Greene 10:50)
“Employee shortage will continue. That problem is not going away, because that it was actually a problem before COVID. That was not new, just intensified.” (Greene, 00:15:03)
“Not everyone has come back post pandemic initial shutdowns… plenty of woman left the workforce to be primary caregivers” (Greene, 00:22:46)
“With the infrastructure bill everyone is expecting this big leap forward this big surge, but it takes time” (Greene, 00:32:18)
“Part of that labor shortage is really finding a good source… invest in your own training process so that you give [employees the skills they need” (Greene, 00:36:22)
“We’re going to be living in that never normal for a while, You may think [you’ll have time to] to catch our breath… [but] it’s the eye of the storm.” (Wolf, 00:40:07)