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Omicron Could Reverse America’s Economic Recovery, New Jobs Count To Drop

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Omicron has thrown a spanner in the economic recovery of the U.S. as the January jobs report to be disclosed on Friday could depict the first effects of the highly infectious variant. A member of the White House Council of Economic Advisers, Jared Bernstein, said the jobs added for the month could be unexpectedly low.

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Omicron Mayhem

As reported by CNN Business, increasing Omicron infections are having a damaging effect on the economic recovery. Experts anticipate that only 150,000 jobs were added in January, which could become the worst report since December 2020.

Goldman Sachs Group Inc (NYSE:GS) anticipates a loss of around 250.000 jobs, while Capital Economics and Jefferies Financial Group Inc (NYSE:JEF) predict a drop of 200,000.

“On Wednesday, the ADP Employment Report, which tracks private payrolls, showed an unexpected drop of 301,000 jobs last month,” CNN informs.

“Although the ADP and government reports aren't correlated, it is adding to the worry about what Friday's tally might look like.”

Full Impact

Despite Omicron infections growing in December, the true effect is expected to be felt in the start of 2022. January is bound to look bad as the U.S. added 190,000 jobs according to the jobs report in the last month of last year, and this was based on surveys carried out before the Omicron surge.

Bernstein told CNN: “It turns out that the peak of Omicron cases coincided with when the [January] data for the payroll survey was being collected, and if you were not at work, if you were on unpaid leave, you're not counted as being on the payroll.”

This includes people who fell ill and also those who stayed at home taking care of relatives or friends who got infected themselves.

The positive news is that the Omicron wave is believed to evaporate soon and the economy could rapidly go back on track —although the negative effects are to be felt during the start of 2022 and could influence economic predictions for the rest of this year.