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Economists are lowering their forecasts for global economic growth in the first quarter of 2022 due to lower economic returns in December as businesses and customers suffer from the sudden proliferation of Omicron variants.
Analysts expected the COVID winter wave to lead to a recession in the first quarter of 2022, but many were concerned about the seriousness of the variant’s impact on the market. ..
Thousands of flights have been canceled in recent weeks, and after hitting the United States in late November, major companies have shelved plans to return to the office.
The entertainment and retail sector in the United States has been hit particularly hard, with professional sports venues, theaters, and Apple Stores facing temporary closures.
Companies are already suffering from severe labor shortages, and many customers are increasingly avoiding public places such as restaurants and shops to avoid illness.
Despite the December 27 announcement from the US Centers for Disease Control and Prevention, financial instability continues. This reduced the recommended period for isolation of infected but asymptomatic individuals from 10 to 5 days after a study from a new study.
Mark Zandi, Chief Economist at Moody’s Analytics, has revised down its US GDP growth estimate from about 5.2% annually to 2.2% in the first quarter of 2022.
“It feels like a dynamic that is very similar to when the Delta struck,” Zandy said, referring to an early variant of COVID-19 that blamed the economy in the summer.
Zandy’s initial expectations of a 6.1% increase in US GDP growth in the third quarter of 2021 were inadequate, with the advent of the Delta variant only a 2.3% increase.
Jefferies Financial Group has already lowered its US first-quarter GDP growth estimate from the previous 6.6% to 1.5%.
However, Jeffreys expects a significant recovery, with estimates for the second and third quarters up to 7.4% and 7.2%, respectively.
The decline in outdoor spending in the last few weeks in industries such as US airlines and eateries has been observed in JP Morgan Chase customers’ credit and debit card data.
Despite COVID-19 concerns, consumer demand remains strong for the holiday season, with US retail sales 8.5 compared to the same period last year between November 1st and Christmas Eve. Increased by%. according to To Spending Pulse of Mastercard.
Price pressures are expected to continue until 2022, although there are positive signs that the global supply chain crisis has eased. S & P Global..
As inflation reaches unprecedented levels in decades, food manufacturers are planning another round of price increases in 2022 due to continued supply and labor shortages.
Central banks around the world are also expected to deal with inflation from COVID-19, and the Federal Reserve will give way to raising rates in the spring of 2022.
Meanwhile, according to S & P, the latest US unemployment rate is 4.6%, showing some improvement. This number is close to the pre-pandemic level.
The analysis group observed that the unemployed were getting jobs at a faster pace, but the outbreak of Omicron caused another wave of employees’ absence from sick leave.
Many economists are convinced that the recent impact on the global economy is unlikely to be as severe as last winter, and believe that the recent recession will have only a short-term impact on spending and growth. ..
This time, healthcare providers and businesses are ready to control the effects of the COVID-19 mutant, and hope that vaccines and boosters will reduce their economic impact, analysts said.
“Roughly speaking, each new wave will do a little less damage than the previous one,” but subsequent recovery will be gradual, Zandy said in a hopeful note.
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Brian S. Jung is from New York City and is a resident with a background in the political and legal industry. He graduated from Binghamton University.
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