Decision Analyst’s U.S. Economic Index Signals Measured Economic Growth in 2022

The Decision Analyst U.S. Economic Index stood at 109 in December 2021, a 3-point decrease from November 2021. The Index tends to be a leading indicator of future economic activity. The past-20-year history of the Index is shown below.

“The U.S. Economic Index continues to rebound from its low point reached in April 2020, but the Index has been falling for several months now, indicating slower economic growth for the U.S. economy in coming months. Inflation is a major worry among consumers and a major barrier to future economic growth. Inflation reduces consumer purchasing power, especially among lower income households where inflation rates are much higher than for the general population. Rapidly rising prices (in contrast to classical economic theory) also leads many consumers to postpone purchases in the hopes that prices will be lower in the future. A second major variable is COVID. The resurgence of COVID, thanks to the Omicron variant, is also dampening economic activity (and public spirits) in the social-interaction parts of the U.S. economy. COVID-19 vaccines are now widely available in the U.S., and a large share of the U.S. adult population is fully vaccinated. Supply chain disruptions and outages are negatively affecting economic activity, although these headwinds should diminish as 2022 unfolds. Many of the government’s economic stimulus efforts are beginning to wind down, a drag on the economy throughout 2022,” said Jerry W. Thomas, President/CEO of Decision Analyst. “A growing longer-term threat to the economy is the likelihood that many homes (and other assets) purchased at inflated prices could be underwater within the next year or two. We still think the economy will continue to grow in 2022, but at much slower rates, compared to 2021,” observed Thomas.

“Planned future purchases (see graphs below) indicate that consumer spending (roughly 70% of the U.S. economy) remains relatively steady for the beginning of 2022. The graphs below show the percentages of U.S. households that say they are likely to make various types of purchases in the next 12 months,” said Thomas.

"Overall, future purchase intentions have been relatively consistent in 2021, and seem to indicate that most consumer spending will likely remain reasonably strong in 2022,” said Thomas.

Methodology

The Decision Analyst Economic Index is based on a monthly online survey of several thousand households balanced by gender, age, and geography. The scientific survey is conducted in the last 10 days of each month. The Economic Index is calculated from 9 different economic measurements using a sophisticated econometric model. The result is a snapshot of coming economic activity in each country surveyed, as seen through the eyes of representative consumers living in the respective countries.

Decision Analyst conducts its concurrent economic surveys each month in Argentina, Brazil, Canada, Chile, Colombia, France, Germany, India, Italy, Mexico, Peru, the Russian Federation, Spain, and the United States. Whenever the Decision Analyst Economic Index is greater than 110, it tends to signal an expanding economy. An Index value of 90 to 110 suggests a no-growth or slow-growth economy, and near or below 90 generally indicates economic contraction. These guidelines vary by country, however.

About Decision Analyst

Decision Analyst (www.decisionanalyst.com) is a global marketing research and analytical consulting firm specializing in strategy research, new product development, advertising testing, and advanced modeling for marketing decision optimization. For over 40 years, the firm has delivered competitive advantage to clients throughout the world in consumer-packaged goods, telecommunications, retail, technology, medical, and automotive industries.

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