Economic forecast report anticipates shift in spending from goods to services, travel in 2022

WASHINGTON,D.C. — A new nationwide report is outlining the potential path for economic recovery this year as the pandemic continues for a third year.

The group of economists and scientist say the recovery will be driven by several recent trends including supply chain disruptions, increased household savings and the growth of online shopping.

In the Mastercard Economics Institute’s annual report, economists are predicting a shift to some pre-pandemic spending habits this year.

For example, as international travel borders reopen and ease restrictions, the report anticipates a return to what they call the “experience economy,” means spending more money on experiences and even services instead of goods.

Another trend to watch this year is the demand for e-commerce.

The report shows about 20 percent of online sales were in retail during the pandemic.

The company says this shift will shape how and where people spend their money.

But some challenges facing our economic recovery in 20-22 include the omicron variant and any new variants that may appear this year.

Economists say other challenges are more nuanced like the impact of the housing market.

“How we think about that space, where we live, the cars we’re buying, how far we’re willing to drive, how frequently we need to go into the office…there’s a lot evolving in terms of that that rebalancing of demand with housing, and how it’s affecting house prices, how it’s affecting car prices, and the supply chain and ultimately inflation as we look to 2022,” said Bricklin Dwyer, Chief Economist and head of the Mastercard Economics Institute.

Additionally, Dwyer said recovery efforts will vary depending on industry.

“It really is a tough challenge ahead for a lot of those industries that are connected with the services industry are reliant on that, that move back of labor, and that demand component of when people can get back out there and, feel comfortable with moving around,” said Dwyer.