The first case of the Omicron variant of COVID-19 was discovered on November 24, 2021, in South Africa. In order to prevent the spread of infection, some European countries and the United States immediately banned flights from certain African countries. Some forecasters expect January to show the first negative coefficient rate in employment in more than a year. Manufacturing production and retail sales fell in December. Constance L. Hunter, the chief economist for KPMG, said, "Those are Omicron's fingerprints. It will slow growth at the beginning of the first quarter." A pandemic could force consumers to pull up their spending. Especially now, due to the closure of most of the government programs. Another worry is that Omicron could challenge the supply chain both in the United States and overseas. This would prolong the recent bout of high inflation and put pressure on the Fed to act. Around 8.7 million Americans were not working in late December and early January because they had COVID-19 or were caring for someone who did. Another 5.3 million were taking care of children who were home from school or daycare. The overall impact is greater than at any other point in the pandemic.
When the first hit of COVID-19 came, it was a shock to both supply and demand, as well as to householders and firms. With each wave, businesses and consumers learn to adapt. If Omicron continued on the same pattern, limiting the supply of goods and workers while doing little to dent consumers' willingness to spend, it could lead to faster inflation.
https://www.nytimes.com/2022/01/24/business/economy/omicron-economy.html
Nice breakdown of the most current COVID outbreak. How do you think this will affect the economy in the long run? I don't believe it will be quite as impactful as the first large outbreak.
ReplyDeleteI agree with you. Countries have learned to handle the pandemic since the first pandemic hit. However, we will still see rise in unemployment, business shutdowns, and economic downsides.
DeleteCOVID-19 from the very beginning has been a detriment to the economy as a whole. Some markets have definitely benefitted from the pandemic, however, most markets and people have been severely hurt by it. The Omnicron Variant of COVID-19 has revamped the restrictions put in place in order to stop the spread. To me, it felt like we were finally getting out of the pandemic during the last semester, but everything picked up once again due to the Omnicron virus. Its increased transmission rates is what makes it so scary despite its low death rate. The high transmission rates also take a toll on the economy because people do not want to go out in public and incur the risk of getting COVID-19.
ReplyDeleteWhile having a low death rate is good and all, the high transmission rate isn't really scaring people back inside so much as it's making people too sick to leave the house for a while. That and we're still dealing with the number of people who were left dead or with long term side effects after both the original strain and the Delta variant. So we were still going to have these kind of long term effects, Omicron just made it so more people would be sick all at once and exacerbate the issue.
DeleteThough we are learning to adapt to the conditions of covid, new waves and variants are unpredictable and make it very difficult to immediately find ways to solve problems. As many markets were hurt by the pandemic initially and have only slowly been able to improve it is worrying to think of what new variants will do to the economy .
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