Omicron Absenteeism Poses Fresh Test to U.S. Economic Strength

Omicron absenteeism poses fresh test to U.S. economic strength

Several economists began the new year by downgrading their first-quarter forecasts

At West Coast ports, already facing logjams of imports, 160 longshoremen tested positive on Wednesday alone, said James McKenna, president of the Pacific Maritime Association, which negotiates labor agreements for 70 companies at 29 ports on the coast.

That number understates the disruption. Hundreds more dock workers are staying home due to contact tracing, or awaiting tests, McKenna said.The backlogs of ships off the ports of Los Angeles and Long Beach, the nation’s busiest, are growing again, McKenna said. “This new variant is so transmittable that it has changed the game,” he said.

Read More: New York Port Hustles to Cut Rare Logjam Amid Covid Labor WoesIn the auto sector, union officials and company representatives said the increase in sick days hasn’t affected production at General Motors Co., Ford Motor Co. and Stellantis NV, owner of the Jeep and Ram brands. headtopics.com

It may just be a matter time. In a call with reporters on Friday, Scott Keogh, chief executive officer of Volkswagen AG’s U.S. unit, said he was“100%” certainthat the industry was about to face production disruptions due to omicron. “There is no flexible new normal” for assembling a car.

 

While economists and investors expect the impact to be short-lived, its magnitude may be sizable. Mark Zandi, chief economist for Moody’s Analytics, cut his first-quarter prediction for annualized gross domestic production to close to 2%, down from about 5%. But he also raised his forecast for the second quarter, saying businesses and the economy are better prepared to face this new wave.

“I don’t expect the virus to sustainably subtract from economic growth on net this year,” Zandi said. Though omicron could, he said, affect how the Federal Reserve views the recovery and when it acts to.Restaurants StruggleThe variant is another blow to industries like hospitality that were struggling to come back to pre-pandemic employment levels, said Jerry Nickelsburg, faculty director of UCLA Anderson Forecast. That in turn will have a longer effect on growth because “those sectors will not recover as fast as we previously thought”.

Marshall Weston, president and chief executive officer of the Restaurant Association of Maryland, said he had spent the week fielding calls from members who were closing their doors for good.“The recovery for restaurants appears to be going in reverse rather than moving forward,” Weston said. headtopics.com

 

At Ledo Pizza in the D.C. area, CEO Beall is determined to keep a company his grandfather started in 1955 alive. He employs 1,300 fewer people than before Covid-19 and has adapted by using more automated online systems to field takeout orders and by simplifying the menu to ease the burden of kitchen staff.

He’s also dealing with staff shortages at suppliers that have only gotten worse with omicron. That means getting smaller amounts of ingredients like mozzarella sticks and waiting longer to get them.“We’ve seen a lot of in 66 years,” Beall said. “But this is definitely different.”

–With assistance from Joe Deaux, Leslie Patton, Gabrielle Coppola, Deena Shanker, Carey Goldberg, Justin Bachman, John Tozzi, David Welch, Keith Naughton, and Augusta Saraiva.

 

Source| Omicron Absenteeism Poses Fresh Test to U.S. Economic Strength

Last Updated on January 17, 2022 by shalw

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