Look Back at 2022 in Charts – Explaining a Bizarre Year
As year 2023 begins, we pulled charts from previous iLevel Road Scholar articles, as well as a few that we came across recently, to help understand 2022.
Inflation: the one thing that consistently rises, even when spirits fall.
Let’s look at a few charts that speak to the pandemic’s lasting influence on Americans’ relationship to work. Road Scholar featured several articles about this topic – including The Great Resignation: Value in Life, Value in Work, The Great Resignation led to the Great Rejuvenation? Let’s Examine the Data, and Did the Pandemic Cause the Great Resignation?
In sum, 2022 was characterized by remarkably high rates of job quits and job openings. The gap between openings and quits created a favorable job market for workers, which in turn led to additional quits – as millions of workers sought better-paying jobs. Inevitably, historic job openings, and low job layoffs, led to higher wages.
Yet, inflation ruined that party. While actual wages went up about 5% in 2022, inflation soared to historic year-over-year levels – significantly dropping real wages.
Sometimes, the quietest exit makes the loudest statement.
Second, the pandemic focused attention on employee well-being. Specifically, it appears that Generation Z and younger Millennials suffered the most from pandemic stay-at-home orders and remote work. Younger workers felt isolated and disregarded by managers. Moreover, they were most likely to perceive limited career opportunities. Consequently, on a YouGov survey, younger workers dropped more than 10 points in the share that strongly agreed that someone cared about them, someone encouraged their development, and that they had opportunities to grow and learn. The decline was most evident among fully remote and hybrid young workers.
Analysts pointed to the absence of lengthy in-person workplace experiences. New workers hired just before or during the pandemic missed out entirely on important socialization opportunities. Newer, younger, workers sat at home, apart from the workplace environment, often piecing together sporadic emails about job expectations and corporate culture. Given this situation, Gen Z and younger Millennials were the most likely age group to exhibit significant deterioration in work engagement. In 2022, this phenomenon was referred to as Quiet Quitting.
Up to your neck in deadlines, but keep smiling.
Similarly, Gallup surveyed employees and found the younger generation reported feelings stressed – a lot of the time. This is a concern to corporate leaders as stress often influences job performance and is correlated with job hopping and quiet quitting.
When there's a shortage of labor, even the smallest tasks feel like Herculean feats.
Finally, 2022 showed that many of the missing workers that left the labor force during the pandemic are never coming back. This creates a troubling shortfall between demand for labor and supply. Many workers, especially those close to retirement, exited during the pandemic – and do not seem likely to return. Also, close to half a million workers died from COVID. Hence, compared to pre-pandemic estimates, there are nearly 3.5 million people missing from the workforce.
Without question, this fact will keep the job market tight in 2023 and keep the focus on employee health, wages, and retention strategies.
Keeping track of the pulse of the nation's transportation industry, one load at a time.
A key measure of business conditions in the trucking sector showed that October was the most difficult environment since the opening months of the pandemic – April 2020. For many months, the freight market has been skewed in favor of carriers (positive FTR index). Robust demand and tight capacity have produced excellent trucking conditions.
However, demand has dropped considerably, and the pendulum is moving in favor of shippers. The FTR trucking index below tracks freight volumes, freight rates, fleet capacity, fuel prices, and financing. For the month of October, the index fell to -11.16. This makes October the worst month since the all-time low readings of -28.66 in April 2020.
Rising gasoline prices: The ultimate test of just how much we're willing to pay to keep the wheels of progress turning.
In 2022, fuel prices exhibited much more volatility than in past years. National gas prices soared after Russia invaded Ukraine but then dipped thereafter. In June, gas prices were $5.02 a gallon. By the end of the year, prices averaged $3.13 – just above a recent 18-month low.
By comparison, in 2019, the national average varied by less than a dollar across the entire 12 months.
Even the fuel that powers our big rigs can't escape the laws of supply and demand.
While gas prices dropped toward the end of the year, diesel prices remained very high. The Russian invasion of Ukraine continues to impact diesel.
Supply chain disruptions: the ultimate game of tug-of-war between efficiency and unforeseen circumstances.
What were the top supply chains disruptions that impacted businesses in 2022?
A Hubs survey (below) of manufacturing professionals indicated materials shortages (60.9%) – semiconductor shortages, followed by COVID-19 (57%), and transportation/logistic issues (52%). The Biden administration and Congress seemed to recognize these issues and produced the bipartisan CHIPS and Science Act of 2022. The legislation addresses the costs of producing critical technologies. Especially, the government invested nearly $50 billion in American semiconductor research, development, and production.
Independent voters: the ultimate swing voters
The 2022 midterms surprised nearly everyone – including our Road Scholar who predicted Democrats would lose between 20 to 30 seats in the House of Representatives. Instead, the Democrats net loss ended up at 8. Nevertheless, Republicans took back the House from Democrats and will enjoy a majority for the next 2 years.
Why did Republicans underperform? Independent voters, who normally support the opposition party in midterms, trended toward the incumbent party instead – 42% in 2022. This is very unusual. Analysts attributed the change to widespread rejection of Trump-backed House candidates. As the graphic shows below, since 2018, the GOP struggles with Independents.
If this trend continues, the GOP will be in serious trouble.
When the Federal Reserve raises interest rates, it's a reminder that even the economy needs a little tough love sometimes.
In 2022, the Federal Reserve took center stage. In response to widespread inflation, it began hiking interest rates. The pace of the hikes caught everyone by surprise. The Fed hiked rates faster than at any one time in history. The chart below compares 2022 to past rate hikes.
As we begin 2023, the question now centers on whether the Fed’s actions were too aggressive.
Slowing customer demand: the ultimate test of a business's agility and adaptability.
After several years of unprecedented burdens on supply chains, 2022 witnessed an easing of pressures. This is due, in part, to slowing consumer demand, which was responsible for some of the major supply chain headaches in 2021. The Federal Reserve Bank of New York’s Global Supply Chain Index is trending down to pre-pandemic levels.
Trucking: keeping the world on the move, one delivery at a time.
Finally, in 2022, a national poll showed Americans’ positive image of the trucking industry. Positive ratings in fact improved during the pandemic and rose above the railroad and airline industries.
As 2023 unfolds, iLevel Road Scholar will continue to offer charts and statistics that depict developments in transportation and supply chains.
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