Uncertainty with variant COVID-19 causes economic shifts – Community News
Covid-19

Uncertainty with variant COVID-19 causes economic shifts

HARLINGEN, Texas (ValleyCentral) — The COVID-19 pandemic has caused some major one-day swings in the stock market, most recently when the omicron variant was discovered.

A word you hear a lot about the pandemic is unprecedented. What any economics professor or textbook will tell you is the opposite of what stock market traders want to hear.

The reason the stock market and future oil price fell when the ommicron variant was announced was that no one knows for sure how dangerous this variant will be, which is why they don’t know if the COVID precautions should return.

“The economy will probably slow down, either because there will be less travel or whatever,” said Salvador Contreras, an economics professor. “What does this mean with what the FED is going to do? And so the markets just reacted with a certain amount of uncertainty.”

The stock market has already recovered from the short-term dip and oil prices are on the rise despite reports that the omicron variant has been discovered in several US states.

Contreras said this has not stopped the US economy from returning to normal.

“It seems that a lot of people already have COVID fatigue, so people want to go back to what was normal before. And employers also want a return to some normalcy,” Contreras said.

The jobs report published on December 3 shows that unemployment has nearly fallen back to pre-pandemic levels.

“It reinforces the fact that, at least in terms of employment, we are back to normal. In fact, there is a labor shortage, depending on who you ask,” Contreras said of the improved jobs report.

Contreras said the fourth quarter of the year usually sees the lowest level of unemployment due to seasonal work, and that number is likely to get worse next year.

“Overall, we expect unemployment to rise a little bit in the first quarter of 2022 or the first quarter of the year,” he said.