In a neverending pandemic, the economy is winning
Noam Galai/Getty Images
- The US added 467,000 jobs in January, even as Omicron gripped America.
- It indicates the economy is continuing to mutate along with the virus, adapting to a new normal.
- But the economy isn't fully recovered, and the US is still dealing with Covid deaths, inflation, and shortages.
It's been nearly two years of the pandemic, and the economy seems like it's finally adapted.
In January, hiring was unexpectedly strong, with the country adding 467,000 jobs. It was a big surprise: The White House had been anticipating a gnarly jobs report. Economists surveyed by Bloomberg forecast that the country would only add 150,000 jobs.
Instead, January saw strong employment growth, even as the Omicron variant swept across the country. Even December and November weren't as bad economically as originally dreary reports said, with the Bureau of Labor Statistics revising those reports up by 709,000 jobs.
"In the past, we have seen that rises in COVID cases have slowed the job market recovery," Daniel Zhao, a senior economist at Glassdoor, told Insider. "But it's possible that the tenor of that is different now."
Even with 3.6 million workers out sick, the economy boomed. It's all a sign of how business has reshaped itself after two years of a new normal, with Omicron potentially severing the link between a spike in cases and a dive in employment. The economy has mutated with the variants.
A mutating economy
Back when Delta threw a wrench into Americans' hot vax summer, JPMorgan Funds' chief global strategist David Kelly said that the way the economy is "mutating" left it less vulnerable and more productive. He said key shifts that occurred during the first year of the pandemic — like the QR menu at restaurants and video-conferencing boom — would protect the US from another pandemic-related recession.
He was right: While Delta slowed down the speed of the US economic recovery, it didn't pummel the country back into the economic turmoil it experienced the year before. When the even-more-contagious Omicron emerged in December, it felt like March 2020 all over again: Events and shows were canceled, colleges moved final exams online, and it became difficult to get tested for Covid again.
But the recent jobs data has proved that Kelly's theory on a mutating economy still stands in the face of other variants, evolving along with Covid itself.
"If the Omicron variant really has reached its peak and, and is beginning to ebb then yeah, this means that we're on a path to a very solid recovery," Dr. William Spriggs, the chief economist of the AFL-CIO and economics professor at Howard University, told Insider. "We did the stimulus the way we did because it means that households are continuing to spend at a level that can get us to that recovery."
With three-quarters of Americans vaccinated, many are still living their lives with a degree of normalcy and thus keeping the economy running. While Omicron has proved more evasive of vaccines than previous variants, protection against hospitalization remains high — especially for the 27% of Americans who are boosted.
The economy still has a ways to go
There's still plenty of economic turmoil. Every day, 2,600 Americans die from Covid, hospital systems are overwhelmed by the unvaccinated, and a record 8.75 million Americans missed work because they became infected. For many, that means a loss in income — or having to go into work sick.
Childcare also continues to be an issue for parents, who are back to juggling remote work while taking care of their kids at home as the Omicron surge leads to school closures and increased hospitalizations among children.
That's not to mention other blows to the economy that existed before Omicron: soaring inflation, a housing crisis, and a serious supply-chain shortage, to name a few. But that jobs and productivity are growing is evidence of how we've learned to be flexible — just like the economy.
Healthcare experts have warned against succumbing to pandemic fatigue. We still need to be vigilant as variants continue to evolve. There may be more systemic measures to take to get to full recovery while keeping workers safe and protecting their income.
"People will get better labor force participation when we fix the care economy," Spriggs said. "People need paid sick days, and they need that ability to be on leave and come back to work."
from Business Insider https://ift.tt/rJd7jhe
No comments