Is the virus still in control of the economy?
Is the virus still in control of the economy?
Seems it’s been a pretty good week for the U.S. economy.
On Thursday, we got the latest numbers on jobless claims, a good proxy for layoffs. First-time claims were up a bit last week, but the four-week moving average fell, moving back toward December’s pre-omicron levels.
On Wednesday, we got January retail sales numbers, which were way up in spite of the omicron surge’s peak. Industrial production? That’s up, too — by almost 1.5%.
Consumers are spending. Factories are humming. Is the virus still in control of the economy?
Make no mistake, the omicron wave has been “severe,” said Andrew Hunter, senior U.S. economist at Capital Economics, “in terms of huge numbers getting infected with the virus, many people sadly dying as well. But purely in terms of the economic impact, the impact there has actually been remarkably limited,” he said.
That’s despite a record 3 million workers out sick at the peak of omicron last month.
“The economy is sort of learning to live with the virus,” Hunter said. “Businesses have adapted to cope with having more flexibility in being able to deal with these temporary staff absences that are sort of an ongoing feature of the pandemic.”
It’s a similar story with consumers. Kayla Bruun, an economic analyst at Morning Consult, has been tracking how willing we are to return to activities we used to do.
“With dining, with travel, other categories that tend to be affected by increased perceived health risks associated with the pandemic, there was a little dip for all of them. But for the most part, it’s already come back to where it was.”
What about workers? A new report from the Pew Research Center finds that most people who are still working from home are doing so by choice, said researcher Juliana Horowitz.
“And the shares who say concerns about being exposed to COVID have dropped,” Horowitz said.
That’s not true for people who can’t work from home and have face-to-face contact with the public.
“Those with lower incomes, and we also see some racial differences, with Black workers being particularly likely to say they’re very concerned about being exposed to COVID at work,” Horowitz said.
In some ways, we seem to be shrugging off the pandemic altogether, according to Ted Rossman at Bankrate.
“Which is maybe not so much of a good thing. Like, credit card balances are rapidly going right back to where they were. The personal saving rate has returned to normal, well down from its pandemic high,” Rossman said.
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