Andrew Sheets speaks with Chief Global Economist Seth Carpenter on Morgan Stanley’s more optimistic economic outlook for 2022 and how consumer spending, labor, and inflation contribute to that story.----- Transcript -----Andrew Sheets Welcome to Thoughts on the Market. I'm Andrew Sheets, Chief Cross Asset Strategist for Morgan Stanley Research.Seth Carpenter And I'm Seth Carpenter. I'm Morgan Stanley's Chief Global Economist.Andrew Sheets And on part one of this special episode of Thoughts on the market, we'll be discussing the 2022 outlook for the global economy and how that outlook could impact markets in the coming year. It's Thursday, November 18th at 5:00 p.m. in London.Seth Carpenter And that makes it noon in New York City.Andrew Sheets So, Seth, welcome to Thoughts on the Market. You are Morgan Stanley's new chief global economist and, while we've just sat down to work on our year ahead outlook and we're going to discuss that, I was hoping you could just give listeners a little background around yourself and what brings you to this role?Seth Carpenter Thanks, Andrew. This has been a great experience for me working on the outlook as my introduction to Morgan Stanley. I guess I've been here just a few months now. Before coming to Morgan Stanley, I was at another big sell-side bank for a few years, spent a little time on the buy-side. But most of my career, I have to say, I spent in Washington DC. I spent 15 years of my career at the Federal Reserve working on all sorts of aspects about monetary policy. And then I spent two and a half years at the U.S. Treasury Department. So, I'm really, really a product of Washington more than I am Wall Street.Andrew Sheets Well, that's great. And so well, let's get right into it because, you know, this is a big collaborative process that you and I and a lot of our colleagues work on. And so let's start with that global economic picture. You know, as you step back and you think about our expectations, how good is the global economy going to be next year?Seth Carpenter Yeah, I have to say our economics team around the world is actually fairly optimistic-- call it bullish-- relative to consensus. When I think about the global economy, clearly the two biggest economies are the U.S. and China. And so starting with the U.S., Ellen Zentner, our chief U.S. economist, has an outlook that the U.S. economy is going to slow down next year, but boy, still be going kind of fast. Right around four and a half percent, which is, you know, slower than the growth rate that we're getting this year, but still a really, really solid growth for the for the year as a whole. And I think in that there's a lot of things going on. We're still getting lots of job gains and the more job gains we have, the more consumer spending we get. And of course, consumer spending, that's 70% of US GDP. I think as well, we're looking forward to there being a big restocking of inventories. I think everyone has heard about the global supply chain issue and inventories in the United States in particular are very, very lean. And so we're looking for a bit of an extra boost to the economy coming from that inventory restocking. So it's a pretty optimistic case; slower than this year, to be sure, but still a pretty optimistic outlook.Andrew Sheets And Seth, what about that other big driver of the global economy, China? How do you think its economy looks next year?Seth Carpenter Robin Xing is our chief China economist, and he is also similarly a bit optimistic relative to consensus. Deceleration, to be sure, from where we were before COVID. But five and a half percent growth is still going to put our forecast, you know, higher than most other people making these sorts of forecasts. And there, when I talked to Robin, what he tells me is, you know, there was a slowdown in the Chinese economy this year in Q3, but a lot of that was policy induced as the policymakers in Beijing are trying to take another step in reorienting the Chinese econo