The US economy continues to recover from the pandemic. Even in the midst of challenges both domestically and internationally, our latest projections call for expansion over the next five years. Here's an overview of some key patterns influencing the outlook.
The decline of the Omicron surge offers hope that the future path of the virus will be more manageable. As restrictions are relaxed, restaurants, bars, and entertainment venues, as well as the travel and tourism industries are seeing increased activity and profitability. Air passengers and cargo volumes are up, and industry executives are expecting far better results this year than last. As long as future spikes in serious cases remain more muted, the pandemic's negative impact on the economy will diminish over time, although vestiges will remain for generations.
Another current concern is inflation. As I've previously discussed, much of the problem is transitory. Consumers are looking to spend even as the supply chain remains snarled, and prices are escalating. We're also seeing more lasting inflationary pressures resulting from the massive deficit spending during the pandemic. The Federal Reserve has begun taking action to slow things down, and the question is whether it can be accomplished without excessive strain on growth. I, for one, believe that it can.
