Economics/Class Relations

2022 will have the weirdest economy in decades

By Ryan Cooper, The Week

Last year saw the highest inflation in almost 40 years, with the Consumer Price Index up 7 percent. “Core” inflation, which leaves out food and energy costs, was a still-high 5.5 percent. The Federal Reserve is now expected to start hiking interest rates in March, well ahead of previous expectations.

It’s not all bad news, though. Unemployment is near a record low, with every sign it will continue to fall throughout the coming year. Wage growth is surging, particularly at the bottom of the income ladder. People are quitting jobs and finding new ones at a record clip.

This year will also have a midterm election, and we’ll probably go to the polls amid the weirdest economy in many decades — with possibly the highest inflation since the early 1980s but also the best job market since the 1960s. It will be an interesting test case for how economic outcomes influence politics, and we’ll see if the Democratic Party can take credit for its genuine successes.

I’d be a fool to make concrete predictions about what will happen between now and Election Day. However, I can outline two plausible scenarios.

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