Optimistic outlooks for the US economy are doubtful. Analysts have been revising growth forecasts for the world’s largest economy amid the spread of the new Omicron variant of the coronavirus.
Experts doubted a speedy recovery of the US economy from the global crisis and reduced forecasts for US GDP growth. The spread of the Omicron variant is the main reason for it. Each day, more employees have to take sick leave, and airlines are forced to cancel hundreds of flights. Consumers are staying home and cutting back on purchases. The authorities are also concerned about the current situation. US Federal Reserve Chair Jerome Powell said that the emergence of the Omicron variant and the increase in coronavirus infections posed risks to the US economy. According to the US Department of Labor, US inflation was 6.8% on a yearly basis in November, hitting a 39 year-high.
Consulting firm Pantheon Macroeconomics estimated that in the first quarter of 2022, US GDP would grow by 3% instead of the previously expected 5%. Moody's Analytics lowered its forecast from 5.2% to 2.2%. Meanwhile, the Fed announced that it would soon curtail economic aid to curb inflation. Investors expect the regulator to pair its monthly asset purchases from $120 billion to $90 billion in December to start raising the interest rate in the spring of 2022.
