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US Economic Recovery Slows Amid Spread Of Delta Variant

Know the two major factors that made the US economy slow:

US Economic Recovery Slows Amid Spread Of Delta Variant

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The United States economic recovery from the coronavirus disease 2019 (Covid-19) pandemic is slowing due to the spread of the Delta variant and a sizable segment of unvaccinated people, Joseph Brusuelas, chief economist at accounting and consulting firm RSM US LLP, said on Tuesday.

“In the United States, infections have increased to a rate of 157,000 per day, with each loss of life and the use of medical resources and foregone activity taking their toll on economic progress,” Brusuelas said in a blog post, adding it is a significant increase from 12,000 Covid-19 cases per day in June.

Brusuelas said “the refusal of a segment of the U.S. population to accept vaccination” is restraining overall economic activity and the full reopening of the economy as around 62 percent of the total American population over 12 have been fully vaccinated so far.

“Businesses that have been scrambling to find workers and input products to meet surging demand are now likely to find customers-and workers-less willing to risk exposure to an unvaccinated person or to an unwitting transmission of the Delta variant,” he said, adding his firm recently downgraded its forecast for US economic growth in the second half of the year.

Brusuelas said they are now anticipating the economy to grow by 6.5 percent for the entire year with the risk of lower growth should events dictate.

“Should the Delta variant spread further, then we would expect to shave more than a percentage point off that forecast in the upcoming days or weeks,” he said.

Brusuelas’ comments came after economists at Goldman Sachs recently downgraded their forecast for US economic growth in the third quarter to 5.5 percent from 9 percent due to the impact of the Delta variant.

“The impact of the Delta variant on growth and inflation is proving to be somewhat larger than we expected,” economists at the investment bank said, adding spending on dining, travel, and some other services is likely to decline in August.

Brusuelas also warned that the fourth wave of the pandemic caused by the Delta variant has the potential to rival the peak of infections of earlier this year, as populations move back indoors in the fall and winter. (PNA)