Even with another COVID surge, supply chain issues and other persistent challenges, the national and regional economy are moving to a post-pandemic recovery and are poised to be the strongest ever, according to the Quad Cities Chamber.

During the Chamber’s 2022 Economic Forecast Wednesday, presented by IMEG Corp. and Mediacom Business, RSM chief economist Kevin Depew encouraged regional leaders to take a long-term view of the economy.

Kevin Depew, deputy chief economist with RSM, spoke Dec. 8 at a 2022 Quad Cities Chamber Economic Forecast at the Waterfront Convention Center, Bettendorf.

“While we’re continuing in a global pandemic, experiencing rising inflation and supply-chain disruptions right now, the U.S. economy is in the middle of a transformation, the most significant upheaval since the Industrial Revolution,” he said at a Q-C Waterfront Convention Center talk.

“What I see are the structural conditions of an economy poised to be the best it has been in my lifetime,” Depew said. That foundation was built during the past 20 years, a period in which the country experienced 9/11, the dot.com crash, a debt bubble and financial crisis, a polarized election and now a pandemic.

“It is completely understandable if your perception of the economy isn’t great right now. The flip side of that is to consider all the things that have happened in the last 20 years,” Depew said. “My perception isn’t that our institutions are weak, prone to failure and on the brink of disaster, but instead, look how robust they are to withstand those things.”

Here are some predictions Depew offered during the forecast:

  • GDP will experience robust growth, far beyond the pre-pandemic period. RSM forecasts 4.2 percent growth next year, and 2.5 percent in 2023. In contrast, the average GDP growth rate from 1945 to present was 1.8 percent.
  • Inflation will continue to recede and likely drop to 2.9 percent by the end of 2022.
  • Employment growth is solid. Wages are rising for the bottom two quintiles of earners who have been left out of any type of wage gain for the last 30 years.
  • There will be a business awakening as capital expenditures catch up to where they were expected to be prior to the pandemic.
  • Infrastructure investment is closing the urban vs. rural divide, which was mending prior to the pandemic, but now, even more so. Capital expenditures will provide the needed services businesses need to open, expand and relocate to new areas.
  • A transformation is taking place in business and industry, fueled by the lower cost of automation and robotics, which will eliminate many jobs. The federal government must make this a policy consideration and put tools in place.

America’s unemployment rate tumbled last month to its lowest point since the pandemic struck, even as employers appeared to slow their hiring — a mixed picture that pointed to a resilient economy that’s putting more people to work.

The government reported recently that businesses and other employers added just 210,000 jobs in November, the weakest monthly gain in nearly a year, and less than half of October’s increase of 546,000.

But other data from the Labor Department’s report painted a brighter picture. The unemployment rate plummeted from 4.6% to 4.2% as 1.1 million Americans said they found jobs last month.

In the Quad Cities, the October 2021 jobless rate was down to 3.9%, compared to 5.5% the same month in 2020, according to Illinois Department of Employment Security (IDES).

Illinois Deputy Gov. Andy Manar

“The Illinois economy and job market has seen continued positive growth for more than half the year across all corners of the state,” Illinois Deputy Governor Andy Manar said last month. “While we continue to wade through the pandemic recovery period, the Pritzker administration and IDES remain focused on providing more opportunities for people looking to reengage with the workforce.”

Over-the-year, total nonfarm jobs increased in all 14 metropolitan areas in the state. The metro areas which had the largest over-the-year percentage increases in total nonfarm jobs were the QC area (+3.2%, +5,700), Carbondale-Marion area (+4.4%, +2,500), and the Chicago metro area (+3.4%, +119,600).

The industries that saw job growth in a majority of metro areas included leisure and hospitality; transportation, warehousing and public utilities; wholesale trade, other services and government; manufacturing; mining and construction; professional and business services, and education and health services.

Good news nationally

The number of Americans applying for unemployment benefits plunged last week to the lowest level in 52 years, more evidence that the U.S. job market is recovering from last year’s coronavirus recession, The White House reported Thursday.

Unemployment claims dropped by 43,000 to 184,000 last week, the lowest since September 1969, the Labor Department said Thursday. The four-week moving average, which smooths out week-to-week ups and downs, fell below 219,000, lowest since the pandemic hit the U.S. hard in March 2020.

Seasonal volatility likely contributed to last week’s drop as the Labor Department adjusted the numbers to reflect job market fluctuations around the holidays, said Stephen Stanley, chief economist at Amherst Pierpont Securities. Before seasonal adjustments, claims actually rose by nearly 64,000 to almost 281,000.

A hiring sign is placed at a booth for Jameson’s Irish Pub during a job fair Sept. 22, 2021, in the West Hollywood section of Los Angeles. Americans quit their jobs at a record pace for the second straight month in September, while businesses and other employers continued to post a near-record number of available jobs. (AP Photo/Marcio Jose Sanchez, File)

Still, Stanley said in a research note that “the underlying trend remains downward and should be lower than it was prior to the pandemic … The unfilled demand for workers is much larger than it was then and layoffs appear to be noticeably lower.”

Overall, just under 2 million Americans were collecting traditional unemployment benefits the week that ended Nov. 27.

Weekly claims, which are a proxy for layoffs, have fallen steadily most of the year since topping 900,000 one week in early January, the White House said.

They are now below to the 220,000-a-week level typical before the coronavirus pandemic slammed the U.S. economy in March 2020; COVID-19 forced consumers to stay home as health precaution and businesses to close or reduce hours and to lay off staff. In March and April last year, employers shed a staggering 22.4 million jobs.

Massive government aid and the rollout of vaccines helped revive the economy and the job market by giving Americans the confidence and financial wherewithal to go on a shopping spree, often online, for goods such as lawn furniture and coffee makers.

Since April last year, the U.S. has regained nearly 18.5 million jobs. But the economy is still 3.9 million jobs short of where it stood in February 2020 and the prospects for the economy remain vulnerable to COVID variants such as Omicron.

Downtown organizations managed under the Quad Cities Chamber have a new “Deck the Downtowns” promotion to help boost the local economy.

The Labor Department reported last week that employers added a disappointing 210,000 jobs last month. But the report also showed that the unemployment rate dropped to a pandemic low of 4.2% from 4.6% in October.

And the department reported Wednesday that employers posted a near-record 11 million job openings in October. It also said that 4.2 million people quit their jobs — just off the September record of 4.4 million — a sign that they are confident enough in their prospects to look for something better.

Until Sept. 6, the federal government had supplemented state unemployment insurance programs by paying an extra payment of $300 a week and extending benefits to gig workers and to those who were out of work for six months or more. Including the federal programs, the number of Americans receiving some form of jobless aid peaked at more than 33 million in June 2020.