Doc’s Prescription: Omicron’s impact on the US economy
Omicron, the newest and most contagious COVID variant, has not only cast a pall over the holiday season but also raises questions about the future. That is, will we continue to see the emergence of new variants? If so, will each new variant be more contagious than its predecessor?
On the positive side, U.S. employers added a record number of jobs in 2021. Our strong job creation has been a cornerstone of 2021’s robust economic growth. However, the pace of gains could slow early this year because of the uncertainty posed by omicron.
Omicron has spread like wildfire. It has caused restaurant closures, shuttered Apple stores, canceled college bowl games and triggered a growing list of cities to cancel New Year’s Eve celebrations.
The latest surge of COVID has pushed cases and hospitalizations to record levels and once again altered daily life. It has caused mayhem in the economy.
‘Smarter than our political systems’
David Kelly, chief global strategist at JP Morgan Funds, said, “The whole world is weary of this thing. It is leading to international frustration with governments that have not been able to control it. This is a virus that is smarter than our political systems.”
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Doc’s Prescription: U.S. economic outlook for 2022
Dr. Anthony Fauci, the nation’s leading infectious disease expert, told CNBC the following, “… it will likely be more than a couple of weeks until COVID-19 cases peak. Probably by the end of January.”
Dr. Peter Hotez, dean of the National School of Tropical Medicine at Baylor College of Medicine, told CNN, “My concern is now schools are going to be opening right at a time when this thing is peaking. Then even more kids are likely going to get sick. So, we’re going to be in for a very rough three or four weeks.”
The high case and hospitalization numbers and the rapidly spreading omicron variant have sparked another round of debate around the country about what the safest return to school route looks like.
The U.S. Centers for Disease and Control and Prevention reported that while roughly 62% of Americans are fully vaccinated, only 33% of our population has gotten booster vaccines — a shot the experts say is critical in helping further protect against severe illness from the dangerous variants circulating.
A September 2021 Gallup poll reported that 45% of U.S. employees worked from home either all (25%) or part time (20%). Omicron has provided another signal that U.S. companies return-to-office plans remain on hold. Two-thirds of white-collar jobs traditionally done in an office reported working from home either exclusively (41%) or some of the time (28%).
What lies ahead for workers in the US?
The Pew Research survey conducted in October of 2020 highlighted the following:
1. 91% of workers in the U.S. hope that their ability to work from home persists after the pandemic.
2. 54% of employees prefer working sometime at home and sometime in the office.
3. Employers are at risk of losing talent if they do not allow remote work.
As a consequence of omicron, economists are downgrading their forecasts for early 2022. Similar to the delta variant, omicron will contribute to the supply chain crisis, which has been a major driver of the biggest bout of inflation in the United States in decades.
I recently read a book, “A Shot to Save the World: The Inside Story of the Life-or-Death Race for a COVID-19 Vaccine.” The author, Gregory Zuckerman, traces the development of the COVID vaccine that probably saved hundreds of millions of lives. Instead of suffering from a modern-day Black Plague that killed possibly as many as one-third of the European population, we can look forward to celebrating the New Year. I think it is more important than ever that I conclude by saying, “May 2022 bring health, good luck and happiness to you and yours!”
Sarasota resident Ernest “Doc” Werlin spent 35 years in fixed income as a trader and corporate bond salesman, including time as a partner at MorganStanley in charge of corporate bond trading. Send suggestions and comments to ernestwerlin@gmail.com.
This article originally appeared on Sarasota Herald-Tribune: Whole world is weary of the threat posed by the latest COVID variant
