Outlook 2022 Executive Summary

Outlook 2022 Executive Summary

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Our resurgent economy grew at over a 6% pace in the first half of the year and is on track

for over 5% growth for the year when 2021 draws to a close. The current economic recovery,

which started in May 2020, has benefited from widespread vaccine availability and

additional fiscal stimulus. While the economy continues to move forward, we’re still

feeling the aftershocks of the COVID-19 Delta variant, whether through elevated inflation,

supply chain bottlenecks, or an imbalanced labor market. But 2021 also saw positives

beyond economic growth, with schools opening their doors and extended family gathering

around many Thanksgiving tables, activities that were far less common in 2020. At the

same time, the S&P 500 Index continued to advance as corporate America faced this

generational challenge with resiliency and saw earnings growth that surprised even the

most optimistic pundits.

The recovery has been a testament to our ability to manipulate our world. Scientists

developed several vaccines extraordinarily quickly. Central banks and policymakers found

ways to insert themselves into the complex network of economic relationships to help

bridge the worst of the economic crisis. But the same scale that multiplies our control of

the world can also multiply potential mistakes and make robust, complex systems more

fragile. We’ve had a hand up that has helped us through a period of unique economic

challenges. In 2022, the economy may be ready for a handoff, back to a greater emphasis

on the individual choices of households and businesses. How smoothly that handoff is

executed may determine the course of the recovery.

On a smaller scale, for many of us, those individual relationships that always sustain us

have been that much more vital over the last two years. We managed to stay connected

with friends and family. Found new ways to work together with our colleagues. And relied on

our relationships with skilled professionals to navigate difficult decisions. Sound financial

advice in particular has helped guide many through this period of uncertainty. LPL Research’s

Outlook 2022: Passing the Baton is here to provide insight and analysis for the next set of

challenges the economy and markets may face.