Omicron variant disrupts economic recovery in the US
The mutating variant of the new type of coronavirus (Covid-19), Omicron, has so far caused chaos in the country with the cancellation of Christmas celebrations, advice to avoid boarding on cruise ships and the suspension of flights. However, this may contribute to labor shortages and even higher prices in the country.
“We’re starting to see the first signs of Omicron’s impact on the economy predominantly in the service sector,” Oxford Economics economist Oren Klachkin told AFP, referring specifically to bars or restaurants.
The world’s first economic power had hoped to contain the epidemic, but on New Year’s Eve the new variant again dashed those hopes.
The highly contagious Omicron, which emerged a month ago, is causing a sharp increase in the number of cases.
The US Centers for Disease Control and Prevention (CDC) warned against cruise travel, stating that the risk of contracting the virus is very high even for vaccinated people.
Between November 30 and December 14, only 162 cases were detected per day in US territorial waters, while between December 15 and December 29, 5,013 cases were reported.
Oren Klachkin pointed out that it is still difficult to measure the economic results of this variant, especially since it is the end of the year holiday season.
Credit rating agency Moody’s analysts recently lowered their growth forecasts for the first quarter of the year to 2 percent instead of 5 percent, as they had previously expected, due to Omicron.
Grant Thornton economist Diane Swonk emphasized that the labor finding process is very complex at the moment due to the number of infected people, and said that this is not a new situation, but Omicron has made it worse.
This shortage of workers, caused by large numbers of people contracting the coronavirus or being quarantined for contact, could paralyze much of the economy.
To alleviate the workforce shortage, President Joe Biden’s administration decided on Monday to reduce the recommended quarantine period from ten days to five.
The unemployment rate and the number of jobs created in the US in December will be announced on January 7.
Some economists also worry that these woes are worsening volatile inflation, which is at its highest level since 1982, disrupting manufacturing and transport on a global scale.