The Muskegon Lakeshore Chamber of Commerce held its annual Economic Forecast Friday morning, predicting whether the economy will continue to grow in 2022, or, if we headed for a recession. Economist Dr. Paul Isley once again gave the forecast this year, and began with some good news first:
The Lakeshore ended 2021 with intense growth, in part, because of government stimulus payments. However, the growth is also three times faster than the economy can sustain.
Dr. Isley says, while people along the Lakeshore are still financially better off now than before the pandemic began, the money is slowly drying up.
“So here is the bad news, we have really super charged the economy,” Dr. Isley said. “That tells us, that it will start to slow down.”
Worker shortages will continue to be a problem in 2022, with the biggest contributing factor being people retiring early due to the pressures of the pandemic.
Don’t expect any relief at the gas pump, as prices will continue in the high two to low three dollar range all year long.
And with the lack of truck drivers and the rising cost of gasoline impacting the supply chain, inflation will continue in 2022. Despite wages going up 6-7 percent, it will not be enough to make up the difference.
“I’m not promising a recession right now, there is a lot of extra money blowing around," Dr. Isley said. "But I am promising that we will slow down, and we have to slow down, or those prices will start to eat us alive.”
Dr. Isley adds that there is still a lot of pent up demand for 2022, but continued production disruptions will keep prices for goods higher than normal.
