The document summarizes key financial trends from 2021 in the United States. It discusses labor shortages leading to wage increases, supply chain issues causing inflation, record high vehicle and home prices, changes to the child tax credit and unemployment benefits, rising stock markets and cryptocurrency values, and efforts to improve financial education.

1. 1. Incomes and Jobs
• 1 in 4 workers quit jobs this year (unprecedented)
• People re-evaluated work requirements, personal values,
career options, and work-life balance
• Many unfilled jobs in a tight labor market
– “Striketober” (food plants, John Deere, etc.)
– Hourly, low-wage jobs paid signing bonuses
• Higher labor costs being passed on to consumers
• Rare to have a labor shortage during an economic recovery
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2. 2. Supply Chain Shortages
• Shipping delays for imported merchandise
• Retailers had difficulty stocking inventory
• Lack of computer chips for unfinished products
• Unfilled truck driver jobs for labor to make timely deliveries
• Atypical economic recovery with pent-up spending demand
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3. 3. Inflation
• Big increase in CPI-U index; 6.8% from 11/20-11/21
• Sharpest CPI increase in 39 years (since 1982)
• Higher costs for supplies/ingredients, labor, shipping
• Large price increases for new/used cars and energy
• Inflation ate away at workers’ wage gains
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4. 4. Vehicle Prices
• Average new vehicle price increased to $41,378 (8/21)
– Reduced availability due to limited supply, high demand
– Limited selection of features for consumers
• Since 3/20, used vehicle prices rose almost 40%
– Major factor in 2021 inflation rate
• Causes include chip shortage, factory shutdowns
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5. 5. Homeownership
• Many people adjusted housing priorities
• Record low housing inventory
• Large increase in new and existing home prices
– Lower-cost housing markets had some of the biggest
housing price increases
• Widespread bidding wars; many cash buyers
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6. 6. Rental Housing
• Slow rental relief distribution
• Multiple eviction moratorium extensions
• Final eviction moratorium ended 8/26/21 (SCOTUS)
• Some states still have protections through 2022
• Modest eviction increases after moratorium ended
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7. 7. Insurance
• COBRA premium assistance under the American Rescue
Plan Act (4/1/21- 9/30/21)
• Medicaid enrollment surpassed a record 80 million
• Supreme court rejected a challenge to the ACA
• “Surprise Billing” rule issued (takes effect 1/1/22)
• Rising cost of homeowners insurance ($1,398 average)
• Steep increases in flood insurance premiums
– New NFIP risk rating pricing method
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8. 8. Credit
• Debt repayment trends
– Big increase in credit card applications (10/20-10/21)
– Record level of consumer credit borrowing (car loans and
leases, credit cards, personal loans)
– Car loan delinquencies, especially among risky borrowers
• Increased home equity loan borrowing
– Drivers: low interest rates and increased home values
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9. 9. Loans
• Congress revoked rule that allowed payday lenders to
connect with banks to circumvent state interest rate caps
• Student loan interest and collections suspended through
5/1/22
– Most borrowers have not made payments in ~22 months
– Borrowers should be preparing NOW to resume payments
• PSLF program relief (consolidated loans, military deferments)
• Average car payments in 2021: $563 for new vehicles, $397
for used, $450 for leased vehicles
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10. 10. Fraud
• 2021 FTC report: Most common fraud categories:
– #1: Imposter scams
– #2: Online shopping
– #3: Internet services
– #4: Prizes/sweepstakes/lotteries
– #5: Telephone and mobile services
• Pandemic-Related Scams: Fake COVID-19 tests, vaccines,
government benefits, charities, Advance CTC
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11. 11. Income Taxes
• Expanded child tax credit (CTC) payments
– CTC: $3,000/child ages 6-17, $3,600/child < age 6
– Half on 2021 tax return and half in advance (unless opt-out)
– Income limit (maximum $): $75k (s), $112,500 (hh), $150k (mfj)
• Late announcement: up to $10,200 of 2020 unemployment
benefits were tax-exempt
• “Below the line” charitable donation write-off for non-itemizing
taxpayers in 2021: $300(s)/$600 (mfj)
• New tax bill?
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12. 12. Investing
• Inflation fears boost use of TIPS and Series I-bonds
– I-Bonds paid 3.54% (5/1-10/31/21), 7.12% (11/1/21-4/30/22)
• “Lottery investments” and FOMO
– Cryptocurrencies and nonfungible tokens (NFTs)
– “Meme” stocks
• Increased interest in environmental, social, and
governance (ESG) investing
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13. 13. Stock Market Events
• DJIA Milestones: $30,409 (12/31/20), 31k (1/21), 32k (3/21),
33k (3/21), 34k(4/21), 35k (7/21), 36k (11/21)
– Periods of high volatility related to COVID-19 variants and other factors
• High-flying meme stocks (GME, AMC) & WallStreetBets
– ~ 22.5 million Robinhood app users in 2021
– Robinhood removed digital confetti (4/21)
• The rise of SPACs (shell companies that go public with the
sole intent of combining with a private firm to take it public)
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14. 14. Cryptocurrencies
• Bitcoin trades above $50,000 for first time (2/21)
– 74% increase, was $27,900 on 12/31/20; $50,788 on 12/23/21
– Total market value of Bitcoin passed $1 trillion (2/21)
• “Pipeline hackers paid in crypto; funds recovered (6/21)
• New products: Crypto IRA and Bitcoin IRA
– First bitcoin ETF; raised $1.1 billion in first 2 days (10/21)
• NFTs: Web’s source code, Martha Stewart Art, etc.
– Nonfungible tokens are “digital collectibles”
– First NFT ETF announced (12/21)
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15. 15. Retirement Planning
• New “life is short” mindset prompted some retirements
• Return of RMDs for taxpayers age 72+ (suspended in 2020)
– Use previously-used life expectancy tables for 2021 RMDs
– New IRS life expectancy tables debut for RMDs starting in 2022
• More mandatory state-run auto-IRAs (small business workers)
• New research (Morningstar): Withdraw 3.3% of savings (not 4%) in 1st
year of retirement and inflation-adjust annually; later challenged by original
“4% Rule” researcher (Bengen) who recommended a 4.7% withdrawal. The
studies used different assumptions. Take-away: The jury is still out!
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16. 16. Social Security
• 2021 Trustees Report: Social Security and Medicare both
face long-term financing shortfalls
– Both programs will see cost growth “substantially in excess of GDP
growth” through mid-2030s
– Employment, earnings, interest rates, and GDP dropped substantially
during Q2 of 2020
• OASI fund projected to pay full scheduled benefits until 2033
(one year earlier than 2020 projection)
– After that, tax income can pay 76% of benefits
Source: Social Security Administration (2021)
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17. 17. Financial Anniversaries
• 125 Years (1896): Dow Jones Industrial Average
– Started on May 26,1896 with 12 companies
– 40.94 on first day; reached 36,000 in November 2021
• 50 years (1971): NASDAQ stock exchange created
• 40 Years (1981): Economic Recovery Tax Act
– ERTA decreased marginal tax rates from 70% to 50%, indexed tax
rates for inflation, and reduced estate and capital gains taxes
• 20 years (2001): Largest tax cut law in two decades
– EGTRRA lowered tax brackets and allowed higher IRA contributions
and catch-up contributions for workers 50+
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18. 18. American Rescue Plan Act
• Third round of stimulus for many Americans
• Broader dependent definition (vs. 2020 stimulus)
• Extra $300/week unemployment benefit extended
– Additional 25 weeks from 3/14/21 through 9/6/21
• Six advance child tax credit payments (July-Dec. 2021)
– Half of total CTC available on 2021 tax return
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19. 19. Pandemic Finances
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20. 20. U.S. Savings Rate
19.9% (1/21) 8.2% (9/21)
12.6% (4/21) 7.3% (10/21)
10.6% (7/21) 6.9% (11/21)
Source: Federal Reserve Bank of St. Louis: https://fred.stlouisfed.org/series/PSAVERT
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21. 21. Financial Education
• 26 states and Washington, DC introduced personal finance
education mandate bills in 2021 (higher number than average)
– Only 1 in 5 students are currently guaranteed to take a standalone
personal finance course prior to HS graduation
• Ohio became the 10th state in the U.S. to require high school
personal finance education (11/21)
• New financial education curricula, professional development,
games, and advocacy work from NGPF: https://bit.ly/32kKVCR
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