Omicron shut down the economic recovery in January, sending private-sector growth to its weakest level since July 2020
Added 01-24-22 04:14:02pm EST - “IHS Markit's measure of overall business growth showed output slowing to 50.8 in January and teetering dangerously close to contraction territory.” - Businessinsider.com
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Posted By TheNewsCommenter: From Businessinsider.com: “Omicron shut down the economic recovery in January, sending private-sector growth to its weakest level since July 2020”. Below is an excerpt from the article.
A survey of purchasing managers at various businesses shows growth grinding to a near-halt as the Omicron wave worsened. IHS Markit's composite purchasing-managers index plunged to 50.8 from 57 in January, according to a Monday report, marking the lowest reading since July 2020. The decline was fueled by weakening conditions at manufacturers and services, with both citing the variant for sharply slower output through the month.
The PMI details how quickly the country's private sector is either growing or contracting. Prints above 50 indicate growth, while those below the threshold hint businesses are shrinking. While the Monday reading doesn't quite place the economy back in a recession , it signals the booming recovery of 2021 is all but entirely over.
Service businesses fared even worse. The industry's own PMI dipped to 50.3 from 53.8, hitting a 19-month low and flirting with its first contraction since the onset of lockdowns in early 2020. Services have been the most prone to virus waves, as soaring infections have forced the renewal of economic restrictions and prompted people to stay inside.
IHS Markit's manufacturing-specific measure fell slightly less to 55 from 57.7. That still reflected the weakest growth in 15 months.
Apart from the surge in Omicron cases, businesses linked the slowdown to supply issues and continued difficulty in rehiring. Recent data showed retail sales tanking in December as consumer demand waned and virus fears intensified. Though most indicators haven't yet revealed the recovery's performance in January, case counts were higher through most of the month. With the supply chain still far from healed, Monday's PMI report hints at even more disappointing January data to come.
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