The Omicron wave of the coronavirus appears to be cresting in much of the country. But its economic disruptions have made a postpandemic normal ever more elusive, the New York Times reported. Forecasters have slashed their estimates for economic growth in the first three months of 2022. Some expect January to show the first monthly decline in employment in more than a year. And retail sales and manufacturing production fell in December, suggesting that the impact began well before cases hit their peak. “Those are Omicron’s fingerprints,” said Constance L. Hunter, chief economist for the accounting firm KPMG. “It will slow growth in the beginning of the first quarter.” Global markets yesterday were in a frenzy, with the S&P 500 plunging nearly 4 percent before recovering its losses. Market analysts said that the early declines reflected fears that the Federal Reserve might need to respond more aggressively than expected to rapidly rising prices, a prospect that some economists say has been made more likely by Omicron. Recovery prospects in the longer run are uncertain. Some economists say even temporary job losses could force consumers to pull back their spending, especially now that federal programs that helped families early in the pandemic have largely ended. Others worry that Omicron could compound supply-chain backlogs both in the United States and overseas, prolonging the recent bout of high inflation and putting pressure on the Fed to act.
