US Economy: What Experts Are Predicting About Inflation In 2022

Economists have expressed optimism about U.S. inflation in 2022 despite the uncertainties of the Omicron variant and supply issues.

The outlook comes as inflation in November hit a 39-year high over growing consumer demand and supply issues.

"I believe that what we’re seeing mainly reflects the inherent dislocations from the pandemic, rather than, say, excessive government spending. I also believe that inflation will subside over the course of the next year and that we shouldn’t take any drastic action," economist Paul Krugman wrote in a New York Times column on Dec. 16.

Eric Dilton, president of investment advisory firm The Wealth Alliance, is among the many experts who have expressed confidence that 2022 will trend more to normalcy.

“The global economy is going to continue to grow, but not nearly at the rates that we saw in 2021. It means that inflation will still be stubborn," Dilton told NBC News in a report this week.

Dilton added that he expects supply chain and employment issues to be solved in the final months of 2022.

There are several factors experts are keeping a close eye on going into the new year, including the housing market, stock market and the COVID-19 pandemic.

Omicron has so far been more contagious than previous variants, yet experts believe that the U.S. is better prepared than in the past.

"The healthcare system at this point is pretty well prepared to pivot and create different forms of vaccines and different forms of therapeutics as new variants present themselves,” SoFi chief investment officer Liz Young told NBC News.

There have been lingering worries that the global economy will slow due to possible tighter COVID lockdowns, which could mean inflation rates will be impacted.

“There is a situation in which it could hit the economy harder, and you could see an abrupt decline in prices,” French economist Laurence Boone told The Wall Street Journal on Dec. 1.

Gus Faucher, chief economist at PNC Financial Services Group, told Yahoo Finance that “if inflation doesn't slow, if we still have some of these price pressures from reopening and so forth … that could have a big negative impact on growth as we see higher interest rates start to weigh on interest rate-sensitive sectors like housing, like autos, like business investment.”