Jan 24, 2022 - Economy & Business

Omicron outbreaks were bad for business in January

Data: New York Federal Reserve Bank; Chart: Axios Visuals
Data: New York Federal Reserve Bank; Chart: Axios Visuals

Emerging anecdotal evidence shows just how hard the recent rise in COVID-19 cases hit businesses in early January — but that hasn't hurt some business leaders’ longer-term views of their companies' prospects.

Why it matters: Increasingly, the economic recovery has come in fits and starts that move in tandem with new peaks in cases. Look no further than the thousands of canceled flights and shuttered Broadway theaters in the wake of the Omicron variant's spread over the last few months.

By the numbers: About 8.8 million people didn’t work between Dec. 29 and Jan. 10 because they had to care for someone or were sick themselves with COVID symptoms, according to Census Bureau survey estimates. That’s nearly triple the number during the first two weeks of December.

The impact: In a Goldman Sachs survey of small business leaders, released this morning, 71% of respondents said the rise in COVID-19 cases due to the Omicron variant has negatively impacted their revenue, and 37% said their business has been forced to temporarily close or scale back operations.

  • Meanwhile: Two closely watched surveys of current business conditions from the New York Fed showed the same. The Empire State Manufacturing Index plummeted to its first negative reading since June 2020. The Business Leaders Survey indexes, which track services firms in New York, New Jersey and Connecticut, also sunk.

But, but, but: Despite the current headwinds, 73% of small business owners in the Goldman Sachs survey said they’re optimistic about the financial trajectory of their business this year.

  • The New York manufacturing index that gauges future business conditions barely dipped — while the services leaders survey showed significant growth in expectations that conditions will improve over the next six months.

The bottom line: As long as we're living with COVID, cycles of disruption in the economy will come and go.

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