WASHINGTON (Reuters) - The fast-spreading Omicron variant of COVID-19 has started leaving an imprint on slices of the U.S. economy as some events are canceled or postponed, consumers cut back on restaurant dining and understaffed businesses shut down in some of the most-afflicted areas such as New York city.
But even as economists say the variant could be a drag on growth early next year, they caution it is too soon to gauge the mark that will be left by an iteration of the virus that may on balance prove less severe even if it is the most transmissible version yet in nearly two years of the pandemic. It also seems unlikely at this stage to prevent a second straight year of above-trend growth.
Preliminary data out Thursday from the UK government showed a 50-70% lower probability of an Omicron infection resulting in hospitalization than with the Delta variant. That followed a study on Wednesday from South Africa, where Omicron was first identified last month, that suggested infections peaked quickly there and symptoms were less severe.
Nonetheless, Mark Zandi, chief economist for Moody’s Analytics, expects the U.S. economy to take a hit in the near term from a surge that could infect more people than earlier waves but end more quickly. He now forecasts the U.S. economy will grow by 2% in the first quarter of 2022, down from 5%.
Credit card balances were fractionally lower in the week ending Dec. 8, marking the first time since October that they didn’t increase week over week, according to the Federal Reserve.
Consumers are also cutting back on trips to restaurants as the virus spreads. The number of diners seated at U.S. restaurants was down 10% for the week ending Dec. 23 when compared with the same week in 2019, according to the restaurant reservations site OpenTable. That is lower than Nov. 25, when dining activity was on par with 2019 levels.
“The situation is changing rapidly and this is far from the resurgence many restaurants were counting on this holiday,” Debby Soo, chief executive of OpenTable, said in a statement to Reuters.
Still, other parts of the economy appeared to be running as usual for now.
The number of Americans filing new claims for unemployment benefits held below pre-pandemic levels last week. And while workplace activity declined slightly last week after rising earlier in December, it was in line with the drop seen heading into the holidays in 2019 and stronger when compared to the same time last year, said Dave Gilbertson, vice president of the payroll management firm UKG.
“So far, we haven’t seen widespread business shutdowns, and customer demand remains strong across industries,” Gilbertson said in an email.
And Americans by and large seemed more committed to their holiday travel plans. The number of people checked through airport security in the approach to Christmas is roughly double last year’s volumes, Transportation Security Administration data showed. Wednesday’s total exceeded the comparable 2019 level by about 144,000 passengers, one of only a handful of days so far to top pre-pandemic levels and by the largest margin yet.