Daily Management Review

Analysts expect Omicron strain to hurt US economy


Emergence of the omicron coronavirus strain in the past few weeks has pushed the number of infections in the US to record highs, disrupting holiday travel plans as well as forcing workers to leave offices and customers to refrain from visiting shops.

The National Guard
The National Guard
Some areas of the economy have suffered, noting a drop in consumer demand or companies shutting down due to labour shortages, but in other sectors the impact of the new strain is barely noticeable. This conflicting picture suggests that the coronavirus is almost certain to put pressure on economic growth rates in the short term, but that any wider effects will be short-lived.

Reductions in contact services are already evident in large cities and densely populated states, where the omicron strain spreads most rapidly. In New York in particular, the average weekly number of hours worked in services fell by almost 23.0% from November to December, from 28.2 to 21.8 hours, compared to an increase of around 18.0% over the same period last year.

Meanwhile, underground ridership in New York City has also been dropping from pre-coronavirus levels since late November, when the first news of the omicron strain surfaced. By 21 November, the Sunday before Thanksgiving, just after the new strain emerged, the rate was 74% of 2019 levels, and by 19 December it had fallen to 59%.

The number of visitors to eating out establishments across the country over the past week was down 13% relative to the same week in 2019, according to OpenTable. In the week ending Thanksgiving, the figure was the same as in 2019.

source: cnn.com