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.

Please understand that this information provided is general in nature and shouldn’t be construed as a recommendation or solicitation of any products offered by SoFi’s affiliates and subsidiaries. In addition, this information is by no means meant to provide investment or financial advice, nor is it intended to serve as the basis for any investment decision or recommendation to buy or sell any asset. Keep in mind that investing involves risk, and past performance of an asset never guarantees future results or returns. It’s important for investors to consider their specific financial needs, goals, and risk profile before making an investment decision.
The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. These links are provided for informational purposes and should not be viewed as an endorsement. No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this content.
Communication of SoFi Wealth LLC an SEC Registered Investment Adviser
SoFi isn’t recommending and is not affiliated with the brands or companies displayed. Brands displayed neither endorse or sponsor this article. Third party trademarks and service marks referenced are property of their respective owners.
SOSS22010401