Omicron may hurt growth in 2022
The omicron coronavirus variant could have a moderate impact on the U.S. economy next year as it hurts consumer spending and worsens labor shortages and supply chain bottlenecks, intensifying already-high inflation, top economists say.
It’s too early to pinpoint how omicron will affect economic growth because scientists are just starting to assess the toll it could take on global health. It could be a nonfactor or, at worst, nudge the U.S. back into recession
But under one likely middleground scenario laid out by some top economists, the strain could be more infectious but not significantly more virulent than the delta variant. And it could lead to fewer government-imposed restrictions on businesses.
If that’s the case, omicron – or another similar variant – would cut economic growth next year by half a percentage point to 4.3% and lead to the creation of several hundred thousand fewer jobs, estimates Mark Zandi of Moody’s Analytics.
That would be less than Moody’s projected growth of 5.5% this year – highest since the early 1980s – but still a historically strong figure as the nation continues to dig itself out of the pandemic-induced downturn.
Omicron was first discovered in South Africa. Preliminary reports suggest that while omicron spreads more rapidly than delta, it may lead to less severe disease, said Ian Shepherdson, chief economist of Pantheon Macroeconomics.
Contributing: Maureen Groppe