December 6, 2021
The Omicron variant of the COVID-19 virus arrived in the US last week, first identified in California. As employers experienced with the earlier Delta variant, this new strain of the coronavirus could cause employees to back away from “work-in-person” jobs, disrupting companies that are already struggling to find workers. The carrot that companies will use to attract those reluctant workers is higher wages, fueling even higher inflation as prices are raised to make up for the higher cost of goods sold. Wall Street needs the Omicron vaccines to succeed, because without it, the staying power of the US economic recovery is threatened (source: BTN Research).
Treasury Secretary Janet Yellen and Fed Chair Jerome Powell told Congress last week that they got a lot wrong in gauging how the US economy would come out of our pandemic-driven recession. Both underestimated how quickly US consumers would bounce back in 2021, spending money on goods that were no longer readily available. They also miscalculated how long it would take global supply chains, shuttered during the first 100 days of the pandemic, to recover and become operational again. Inflation is simple – when demand races ahead of supply, prices rise quickly. Inflation will slow down domestically when the supply chain mess is cleaned up (source: BTN Research).
Congress did not allow a government shutdown to happen last week after they passed a short-term funding bill on Thursday (12/02/21). The stop-gap measure allows our government to spend money for 11 weeks (to 2/18/22) under the same terms that existed for the previous 2021 fiscal year. There have been 4 government shutdowns in the last 10 years, including our longest ever (35 days) in 2019 (source: PBS).
Notable Numbers
HOW MUCH WE USE – The US consumed 2 million barrels of crude oil per day in 2020. The all-time consumption record in the US was 20.8 million barrels of crude oil per day in 2005 (source: Energy Information Administration).
MEDICAID – 2% of the total spending of the 50 US states in fiscal year 2021 was for Medicaid expenditures, a total of $722 billion (source: The National Association of State Budget Officers).
NOT ENOUGH STAFF – 4 out of 5 (80%) childcare centers nationwide reported having staffing shortages as of June 2021 (source: National Association for the Education of Young Children).
EVERY DAY – An estimated 11,050 Americans will turn 65 years old each day next year (2022), i.e., 1 every 8 seconds. This group represents the 12th year of 19 years of “Baby Boomers” turning age 65. An estimated 11,525 Americans will turn 65 years old each day in the year 2029 (source: GAO).
