Omicron variant adds uncertainty, but UCLA Anderson Forecast sees stronger-than-anticipated performance for U.S. and California
LOS ANGELES, Dec. 8, 2021 /PRNewswire/ -- Since March 2020, the state of the COVID-19 pandemic has determined the course of the economy nationally and across California. With each successive wave, the economy has grown more resilient to the effects of the virus, but by the end of 2020, it became clear that consumer behavior, not government restrictions, had the greatest effect on economic outcomes.
Overall U.S. forecast is for strong economic growth & labor market recovery, with fewer supply constraints & inflation.
That's evidenced by the facts that consumers cut back on in-person commerce and services even before governments imposed restrictions, and that service consumption fell about equally in areas that imposed restrictions and those that did not.
The recent arrival of the omicron variant of the coronavirus is not great news for the U.S. economy, not least because 70% of the economy relies on consumption, according to the latest report from the UCLA Anderson Forecast. The December forecast assumes the likelihood of a winter surge in COVID-19 cases and predicts that consumers will temporarily cut back their spending on in-person services. But Anderson Forecast economists expect the impact on the economy to be relatively short term, writing that consumer spending may dip over the next quarter and then rebound quickly.
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