WASHINGTON
\nHoliday events have been scrapped in droves, thousands of flights canceled, cruises are now off limits: the Omicron variant has wreaked havoc in the United States, and the new year could see more issues exacerbating the worker shortage and the recent wave of price increases.
\n\u201cWe are starting to see some initial signs that Omicron is having an impact on the economy, mainly in the sectors where face to face interactions are most important,\u201d in particular service sector businesses like bars and restaurants, Oren Klachkin of Oxford Economics told AFP in an interview.
\nThe world\u2019s largest economy had been poised to put COVID-19 in the rearview mirror, but on the eve of the new year, the virus is once again playing the spoiler.
\nThe highly-contagious Omicron variant, which appeared a month ago, is causing the number of new cases to skyrocket to record levels during the holiday travel season.
\nAfter 5,013 cases were reported in US territorial waters between December 15 and 29, compared to just 162 in the prior two weeks, health authorities warned Americans to avoid cruise travel.
\n\u201cEven fully vaccinated travelers may be at risk for getting and spreading COVID-19 variants,\u201d the US Centers for Disease Control and Prevention said this week.
\nEconomists say it is difficult to quantify the economic consequences of this new variant.
\nMoody\u2019s analysts lowered their growth forecast for the first quarter because of Omicron, cutting it to around two percent rather than the five percent previously expected.
\nMAGNIFIED BY OMICRON\u201d
\nThe \u201cfear of contagion\u201d causing canceled events and the decline in restaurant reservations \u201care only part of the equation,\u201d Grant Thornton economist Diane Swonk warned in a tweet, noting that employers face worsening manpower issues due to the rise in infections.
\n\u201cThis is not new, just magnified by Omicron,\u201d she said.
\nRising case counts mean more workers in quarantine due to a positive COVID-19 test or contact with an infected person, and the resulting personnel shortage could paralyze a large part of the economy.
\n\u201cWe have already seen the beginning of what I – and clearly the CDC fears – will be a surge in those out sick and unable to keep even vital services going,\u201d Swonk said.
\nThe most visible impact was the thousands of flights canceled over the Christmas holiday as airlines struggled to get enough flight crews on planes.
\nIn an effort to ease the strain of long quarantine requirements, President Joe Biden\u2019s administration on Monday cut the recommended isolation period in half to five days for infections without symptoms.
\nBusinesses nationwide already had been struggling to fill open positions, amid a wave of retirements and growing reluctance to return to in-person work amid the pandemic.
\n\u201cMODEST\u201d INFLATION IMPACT
\nThe unemployment rate in November dropped to 4.2 per cent, but participation in the workforce remains well below the pre-pandemic level. The government will release the closely-watched December jobs report on Jan 7.
\nOxford Economics expects hiring to continue and the economy to add 400,000 jobs a month in 2022, but \u201cthat doesn\u2019t mean there won\u2019t be shortages in some sectors,\u201d economist Nancy Vanden Houten cautioned.<\/p>\n","protected":false},"excerpt":{"rendered":"
WASHINGTON Holiday events have been scrapped in droves, thousands of flights canceled, cruises are now off limits: the Omicron variant has wreaked havoc in the United States, and the new year could see more issues exacerbating the worker shortage and the recent wave of price increases. \u201cWe are starting to see some initial signs that […]<\/p>\n","protected":false},"author":2,"featured_media":236382,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[2481,2479,959,444],"class_list":{"0":"post-236371","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-business","8":"tag-economic-comeback","9":"tag-holiday","10":"tag-omicron","11":"tag-us"},"yoast_head":"\n