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Updated Expectations for 2022

October 16, 2020

We've taken our forecast for the 2022 recession off the table, but that doesn't mean there aren't still concerns for certain sectors. Catch our newest TrendsTalk episode with ITR CEO and Chief Economist Brian Beaulieu to learn more.

 

 

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Transcript by Rev


Thank you for joining us today. I'm Brian Beaulieu of ITR Economics. We've been talking a lot about how the recovery is already in place, how we think it's going to continue throughout 2021 and really 2022. We anticipate that there's going to be a vaccine that will help all this, but our outlook isn't contingent upon some sort of miracle dispersal of that vaccine. We know it's going to be very, very difficult from a logistics standpoint.

I was giving a talk this morning and I noticed on a chart, if you've seen it, it's our single family housing starts chart. We have almost like a flat spot out there in 2022, 23. And that reminded me that we still have that concern period. We've taken that recession off the table, but that doesn't mean all of our concern is gone. And it does mean that some sectors are clearly going to be doing better than others. The concerns to that period, not so much rising interest rates. So if you're sensitive to interest rates, we're not really concerned about you, hence the housing thing, but if you tend to have a tight relationship to the stock market, our concern for you is heightened.

So if you're in the luxury goods side of the economy or are expensive discretionary items that people can decide to forgo for six months while waiting for their portfolios to fill back up, some such thing. That's a risk factor for you. [inaudible 00:01:50] other markets like travel, tourism will likely be back on their feet. Energy sectors should be back on their feet. So we don't have to worry about all of us being down at one time, but there might be some rotational weakness out there through 2022.

We'll seek to identify those as we get closer to them. My gosh, let's just make sure that everybody is clear about this recovery and we're more sure than ever that it's going to be in place, but I just wanted to put that thought in your heads that there's that rotational weakness that we're thinking about in 22, 23. And one of the clear signs for that we think is going to be the stock market, but not the gyrations we've recently been going through. That's small change. That's just normal volatility really from our perspective. There are bigger issues for the stock market and we'll define those in the future, but still plan. 21, plan on moving up. Moving up good as fast and as hard as your management team can make it happen for you. This is Brian Beaulieu from ITR Economics. Thank you for listening to another edition of TrendsTalk.

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Since 1948, we have provided business leaders with economic information, insight, analysis, and strategy. ITR Economics is the oldest privately held, continuously operating economic research and consulting firm in the US. With a knowledge base that spans six decades, we have an uncommon understanding of long-term economic trends as well as best practices ahead of changing market conditions. Our reputation is built on accurate, independent, and objective analysis.