with the ohmicronic wave of global pandemic Rapidly spreading across the United States, the strong economic recovery faces a new threat over which policymakers have little control: people who say they are sick.
When pilots and other staff members became ill or were forced to go into quarantine, what began as a series of holiday flight cancellations turned into factories, grocery stores and ports, and again becoming a reality. Supply chains are being tested.
absent from work Widespread is already limiting production, and many economists started the new year by lowering their first-quarter forecasts. Even if the hit is temporary, as most have anticipated, disruptions and shutdowns are likely to slow the fragile rally in some sectors and affect companies’ future plans.
“You don’t know when it’s going to happen to you,” said James Beal, CEO of the Ledo Pizza chain in the Washington, DC area. On any given day in the past week, at least three of the company’s 110 locations were closed and a maximum of five were working fewer hours. “Our new normal is becoming another new normal.”
It may take weeks to determine how severe or long-lasting the number of victims is. omicron, The December jobs report, released on Friday, showed a new pandemic unemployment rate of 3.9 percent, based mainly on data collected before the variant spread. Even January’s figures, forecast for February 4, are unlikely to reflect the full impact, which is more likely to be measured in lost production due to sick days than in jobs lost.
Online Job Listing Firms Actually Compare Chief Economist Nick Bunker ohmron effect With the Blizzard of 1978, which dropped four feet of snow on his native New England in less than 36 hours and caused weeks of disruption, but also a swift recovery. Unlike Blizzard and even previous waves COVID-19The edition has rapidly become a national event, with new cases reaching one million a day last week.
It means “this great, very, very great effect”. Economy and the labor market in particular. But then the expectation is that, like a hurricane, it ends and then there is a return to previous trends,” Bunker said.
“While we hope that the variant omicron While temporarily slowing the pace of hiring in January, it does not fundamentally change the trajectory of labor market adjustments thereafter,” said economists Anna Wong and Andrew Husby.
In Capital Economics, US economist Andrew Hunter estimated that more than 5 million workers were forced to stay at home in the past week alone.
“Things are likely to get worse in the short term,” he wrote in a note to customers. In addition, the “traditional wisdom that omicron This does not represent a threat to the economy, it may be too optimistic”.
‘Unprecedented’ sick days
Staff shortages have continued to plague the airlines, and Alaska Airlines said “unprecedented” workers reported getting sick, leading to the cancellation of 10 percent of its flights for the rest of January.
Conor Cunningham, an analyst at MKM Partners, said the real question for the industry is whether it will slow the growth planned for 2022, if it continues through February and beyond.
“My expectation has been that other airlines will need to slow growth,” Cunningham said.
Few hospitals are at a hard point dealing with more sick or exposed workers than during the worst of the pandemic.
“We had more staff because they tested positive and contracted COVID than they initially did,” said Linda Schrock, vice president of human resources at Logansport Memorial Hospital in Indiana.
At Rodeo Drive in Beverly Hills, luxury retailers Gucci, Hermes and Louis Vuitton have reported cases among employees, according to a public list of Los Angeles County workplace outbreaks. Walmart has closed at least 60 of its stores in the US. For deep cleaning. Apple Inc. in dozens of locations, from Alabama to Florida to New York. The places have been temporarily closed.
In West Coast ports, which are already facing import jams, 160 longshoremen tested positive on Wednesday alone, said James McKenna, president of the Pacific Maritime Association, which deals with labor agreements for 70 companies at 29 coastal ports. talks.
That number underestimates the interference. McKenna said hundreds more dockworkers are staying at home because of contact tracing or waiting for evidence.
McKenna said ship delays are on the rise again at the nation’s busiest ports of Los Angeles and Long Beach. “This new version is so transferable that it has changed the game,” he said.
In the automotive sector, union leaders and company representatives said the increase in sick days had not affected production at General Motors, Ford Motor and Stelantis NV, which owns the Jeep and Ram brands.
It may just be a matter of time. In a call with reporters on Friday, Scott Keogh, chief executive officer of Volkswagen AG’s US unit, said he was “100 percent” sure the industry was going to face production disruptions due to Omicron. There is “no flexible new normal” for assembling a car.
While economists and investors expect effect Keep it small, its magnitude can be considerable. Mark Zandi, chief economist at Moody’s Analytics, cut his first-quarter forecast for annual GDP from about 5 percent to about 2 percent. But he also raised his forecast for the second quarter, saying businesses and the economy are better prepared to face this new wave.
“I don’t expect the virus to continue to be affected by economic growth on the web this year,” Zandi said. Although O’Micron, he said, could influence how the Federal Reserve views the recovery and when it acts to raise rates.
UCLA Anderson Forecast Faculty Director Jerry Nickelsberg said the variance is another blow to industries such as hospitality struggling to return to pre-pandemic employment levels. In turn, this will have a greater impact on growth because “those areas will not recover as quickly as we previously thought.”
Marshall Weston, president and CEO of the Maryland Restaurant Association, said he spent weeks taking calls from members who were closing their doors forever.
“The recovery for the restaurant appears to be turning upside down rather than moving forward,” Weston said.
At Ledo’s Pizza in the DC area, CEO Biel is determined to keep alive a company his grandfather founded in 1955. It employs 1,300 fewer people than before COVID-19 and has been optimized using more online systems. Menus to ease the burden on kitchen workers by automating and simplifying takeout order filling.
It is also dealing with staff shortages at providers that have only gotten worse with Omicron. This means getting smaller amounts of ingredients such as mozzarella sticks and waiting longer to receive them.
“We’ve seen a lot in 66 years,” Beale said. “But it’s definitely different.”