COVID-19: omicron bitter the end of the year to the US economy

Canceled Christmas shows, exhortations to avoid cruises, planes that cannot take off: the omicron variant of coronavirus multiplied the problems for the United States economy and could contribute to a shortage of workers and even higher prices in the country.

“We begin to see the first signs of the impact of omicron on the economy”, Mainly in the service sector such as bars and restaurants, explained Oren Klachkin, an economist at Oxford Economics.

The world’s largest economy had hoped to leave the COVID-19 pandemic behind, but on New Year’s Eve, the coronavirus is playing a trick again.

After being detected a month ago, omicron, an extremely contagious variant, makes the number of cases skyrocket.

The situation led the United States health authorities (CDC) to discourage cruise travel on Thursday, noting that “the risk of contracting COVID-19 ″ on these ships “is very high”, Even for those vaccinated.

Indeed, some 5,100 cases were reported in US territorial waters between December 15 and 29, compared to just 162 between November 30 and December 14.

However, it is difficult to quantify the economic consequences of this variant, “especially since it is the holiday season at the end of the year, which affects the data”, Detailed Oren Klachkin.

Analysts at Moody’s agency, meanwhile, recently lowered their growth forecast for the first quarter due to omicron, and now expect 2% compared to 5% anticipated.

Omicron effect

The “fear of contagion“And the decrease in reservations in restaurants”they are only part of the equation“Warned economist Diane Swonk, Grant Thornton, in a post on the Twitter network.

It is difficult to find labor due to the number of sick people. “It is not something new, but amplified by omicron”, He stressed.

This lack of workers, amplified by quarantines after a positive test or contact with a sick person, could paralyze large sectors of the economy.

Air transport is also facing difficult days, with thousands of flights canceled due to the volume of personnel that had to isolate themselves, at times of great demand at the end of the year.

To limit absenteeism, the Joe Biden government decided on Monday to reduce the length of the recommended quarantine, from ten to five days.

This lack of manpower could aggravate a situation that goes back months: there are not enough workers in the United States to fill all the vacant positions, in particular due to the high number of early retirements since the start of the pandemic.

Impact “modestoAbout inflation

“We anticipate that the labor market will continue to recover in 2022, with some five million new jobs created, just over 400,000 a month.”, anticipation Nancy Vanden Houten, economist at Oxford Economics.

However, he pointed out that this does not mean that there will be no shortage “in some sectors”.

The unemployment rate and the number of jobs created in the United States in December will be announced in a report to be released on January 7.

Some economists also fear that the shocks associated with the new variant will aggravate inflation that is at its highest since 1982, pressured among others by problems in factories and transport on a planetary scale.

“There is a real risk that the variants will be more inflationary than disinflationarySwonk explained. However, at first, the rise in prices of services and energy “could be mitigated” with a drop in demand.

Mark Zandi, chief economist at Moody’s, expects an impact “modesto”From omicron on inflation.

“Companies have made significant progress in mitigating bottlenecks in the global supply chain”, He highlighted.

“Even if more workers become ill, they should, by becoming less severely ill, return to work more quickly”He added.