![]() We believe the US chip shortage will improve in 2022 but remain an economic factor through early 2023, continuing to put upward price pressure on automobiles and electronic devices. Perhaps the telltale sign of higher wages to come in 2022 is that the US unemployment rate has declined to 3.9 percent with 6.3 million Americans unemployed, according to the US Bureau of Labor Statistics, and roughly 11 million job openings available. There is a clear shortage of labor in the United States, as evidenced by rising wages in 2021 for jobs from truck drivers to airline employees and $180,000 bonuses for many Apple employees. In addition to food inflation, we expect a high level of wage inflation across all labor markets in 2022. US holiday sales were partially fueled by stimulus checks and the child tax care credit that will no longer exist in 2022, thus presenting a potential major decline in retail sales in Q1 2022, but not necessarily accompanied by lower prices. As 2022 begins, many experts predict food inflation will increase 5 percent for the year. The month of December saw US consumer price inflation at 7 percent on an annualized basis and the Producer Price Index up a record 9.7 percent on the year. While the reasons US competitiveness has declined since 1960 are many, we’ll focus on three of the issues that have been the most problematic, and if not remedied, will continue to be for decades to come. Clearly, North America has been outpaced by Asia since 1960. Including India, Japan, South Korea and all of Asia, total 2021 Asian GDP was 33.7 percent of the $94 trillion global economy. Today, North America comprises only 27.9 percent of global GDP while China, now a country of 1.445 billion people, generates a GDP worth $16.86 trillion (17.8 percent). In comparison, China in 1960 produced a GDP of $59.72 billion or 4.39 percent of global GDP. When adding Canada and Mexico, North American GDP totaled $597.42 billion or 43.7 percent of the world’s GDP. In 1960, the US produced $543 billion in GDP, or just under 40 percent of the world’s $1.367 trillion global economy. However, we are concerned with the size, growth, and state of the US economy when comparing its transition from 1960 to date. at just over 333 million people, which is a per capita GDP of roughly $68,700, among the highest in the world. The number is especially impressive given the population of the US. According to the International Monetary Fund (IMF), the United States was once again the world’s largest economy in 2021, producing an estimated $22.94 trillion or 24.4 percent of global GDP. ![]() As 2022 unfolds, there’s much concern regarding the US economy and our geopolitical standing.
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