Omicron Issues Across Multiple Sectors Leads to Diminished Economic Outlook
Airlines Cancel Thousands of Flights
The recent surge in COVID-19 cases due to the Omicron variant is having an impact on a number of sectors. For example, airlines canceled thousands of flights during the busy holiday season. This is the first time the airline industry has dealt with such a highly transmissible variant during a peak travel period.
Under the new CDC guidelines, the recommended isolation period for people who test positive for COVID-19 has been cut in half from 10 days to five, provided they aren’t showing symptoms.
Union leaders and industry executives are at odds over this proposed change in guidelines. Delta Air Lines (DAL) has already adopted the new CDC guidelines, while Southwest Airlines (LUV) says they’re reviewing the new guidance before making a change to their policies.
Grocery Stores And Retailers Close Locations
Supermarket industry executives predict a widespread shortage of cashiers and stock workers. Some retailers have closed locations or limit in-store access. Even Apple (AAPL) has limited access at its flagship store in New York City — a step the company rarely takes.
All of this comes as consumer demand is surging, and issues with the supply chain persist.
Some Economists Reduce Growth Predictions
Some analysts are cutting growth projections heading into 2022, but indicators are causing others to be more bullish. For example, there has been no noticeable bump in jobless claims, and there are limited disruptions for some industries such as meat production.
Generally speaking, consumers who stay home to avoid catching the virus aren’t out buying goods or services. Businesses like restaurants will likely ramp up to-go and delivery options, both of which lower profit margins.
Earnings also take a hit when stores reduce their hours, but businesses are wary of overworking employees given ongoing staffing issues. Economists and lawmakers will be watching closely to see if labor shortages persist, and how companies will respond.
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