A Deep Dive Into Troubles of the Us Economy in 2022
Between the rapidly spreading Omicron variant and rapidly rising inflation, 2022 did not start in the best way for the US. What to expect on the US economy?
About a year after Biden took office, the US does not shine for recovery.
The US economy will take a hit in 2022 from the Omicron variant, but the damage is not expected to last beyond the first quarter, according to the latest Bloomberg monthly poll.
Inflation forecasts have been strengthened for each quarter of 2023, reflecting the protracted problems with supply chains that risk being exacerbated by Omicron.
In this scenario, where the US president is clearly declining in the polls, 2022 appears full of obstacles for the world power.
The economic woes of the USA, between inflation and Omicron
The data are processed by Bloomberg: GDP growth expectations for the January-March period fell to 3%, from 3.9% in the previous monthly survey.
The new pandemic wave has disrupted travel and helped empty supermarket shelves in some areas, as workers are increasingly stopped by infections.
The latest disruption due to Covid also comes as the thrust of government aid is fading.
"The momentum of growth appears to have stalled," Jefferies' Aneta Markowska and Thomas Simons wrote in a report this week, forecasting a 1.5% expansion in the first quarter.
Among other indicators, there is a sharp decline in office employment that reversed almost all of last year's return-to-work drive and "will create negative knock-on effects in the short term as demand for services takes a severe hit. hit".
Restaurant reservations, which had more or less climbed back to pre-pandemic levels prior to the arrival of omicron in late November, are down about 30%.
Delta Air Lines
said sick employees, as well as winter storms, caused more than 2,000 flights to be canceled in the past few weeks
Inflation estimates, meanwhile, have been raised for each quarter of the year. In part, this is likely a consequence of the Omicron effect on already stressed supply chains, with the possibility of further factory closures in Asia and already tight labor markets at home.
Consumer prices have risen 7%, and the Bloomberg survey suggests that any slowdown in the coming months will be limited, with second-quarter inflation seen at 5.2% instead of 4.8% forecast a month ago.
Biden's political knots
Not just economic estimates. There are also some political issues that have become thorny for the White House to shake the US at the beginning of the year.
Biden is unable to unlock the green light for the big Build Back Better reform project, which is also opposed by the dem to the amount of investments.
Furthermore, the Supreme Court rejected the vaccination obligation that the president wanted to impose on some workers.
In addition, there is the grain of Russia and a threat of war, while the problem of skyrocketing prices is putting a strain on the president. A few weeks ago Biden had already challenged OPEC to release more oil to lower energy prices.
