Arrows indicate trends.
- Inflation: red arrow pointing upward (expected to stay above the Fed’s target rate through 2022)
- GDP growth: green arrow pointing up (expected to remain strong through 2022)
- Wage growth: yellow arrow pointing up (rising, but real wages still negative)
- Unemployment: green arrow pointing down (improving with a strong recovery of labor-intensive services)
- Consumer confidence: yellow arrow pointing upward (stumbles on worries over economic fallout from the war in Ukraine)
- Volatility: yellow arrow pointing sideways (steady, but higher than pre-pandemic levels; may increase as Fed tightens policy)
Source: Wells Fargo Investment Institute, as of March 31, 2022. Subject to change. GDP = gross domestic product. Fed = Federal Reserve
- The U.S. economy, propelled earlier by vaccine deployment, ample household and corporate cash, low interest rates, and, until recently, massive government support, now faces headwinds from soaring commodity prices, higher wage-price inflation and interest rates, labor shortages, and supply-chain disruptions.
- Monetary stimulus is following an earlier pullback in fiscal stimulus in reversing the strong tailwinds to economic growth. The job market should continue improving due to strong growth and an easing of labor shortages.