The U.S. economy ended up in a weird place in 2021. Consumers were eager to spend money, but couldn’t get their purchases because supply chains were haywire. Wages rose as workers resigned. Prices, meanwhile, soared for everything from groceries to gas to rent and vehicles. And the global health crisis that triggered these trends is still in full force.
If you are feeling a bit of whiplash from all this, you’re not alone. Americans have mixed feelings about what’s going on. A Gallup economic poll in November found that 70% of U.S. adults believe the economy is getting worse—a rate not seen since April 2020, when the country was in shut-down mode. But at the same time, 74% say now is a good time to get a job—the highest rate recorded in the survey’s 20-year history.
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It’s hard to say if things will start to feel more normal in 2022. The unusual combination of economic circumstances from the last year could persist for some time, experts say, but the timeline is uncertain because so much depends on the pandemic’s severity, monetary policies and human behavior—all of which play off each other.
Consider all the ingredients that were necessary to create the so-called “great resignation” of 2021. First was the fact that Americans weren’t cash-strapped thanks to federal programs such as relief checks and enhanced unemployment benefits from President Biden in 2021 and former President Trump in 2020. Even as those programs wound down, families with children received child tax credit payments on a monthly basis in the second half of the year. Those income sources, combined with the dampened consumer spending from early in the pandemic, triggered the personal savings rate to shoot up—giving Americans a financial cushion to sit on as they waited to rejoin the labor force. Americans experienced less material hardship during the pandemic than before the pandemic, according to one analysis from the Urban Institute, a left-leaning think tank.
Source : time
