Fundamentals Of US Economy Remain Strong And Room For Expansion Exists For 2022

The fundamentals of the U.S. economy are showing signs of health going into 2022 in spite of inflation and COVID-19 concerns, the Conference Board said in a report issued on Monday.

The Conference Board's Leading Economic Indicators (LEI) report showed an increase of 1.1% in November after a 0.9% gain in October.

Ataman Ozyildirim, the senior director of economic research at The Conference Board, suggested in a press statement the findings indicated a continued economic expansion "into the first half of 2022."

He cautioned that challenges from 2021 such as rising inflation and supply chain bottlenecks around the world will continue to pose problems, but added that these risks can ultimately be contained.

“Inflation and continuing supply chain disruptions, as well as a resurgence of COVID-19, pose risks to GDP growth in 2022,” said Ozyildirim. “The Conference Board forecasts real GDP growth to strengthen in Q4 2021 to about 6.5% (annualized rate), before moderating to a still healthy rate of 2.2% in Q1 2022.”

The LEI consists of 10 economic metrics that include initial unemployment claims, stock prices and building permits among others. Of the 10, the Conference Board reported that eight increased in November.

A negative indicator included in the LEI was average consumer expectations. Owing largely to rising inflation, U.S. consumers showed pessimism as to whether or not prices will go down in the near future.