Commerce Secretary Gina Raimondo is concerned the Omicron coronavirus variant will exacerbate pressure on the already stressed-out global supply chain, reports CNN.
Shortage of workers
Raimondo pointed to the shortage of workers impacting a range of businesses in the United States.
“Some portion of that is people are afraid to go to work,” Raimondo said. “In manufacturing facilities, people work in person, close together. And there have been outbreaks. We’ve had problems in places where people work close.”
Outbreaks from the Delta variant worsened supply chain turmoil earlier this year, causing computer chip and other factories to shut down, especially in Asia.
Supply shock at the heart of inflation
During a hearing on Tuesday, Federal Reserve Chairman Jerome Powell said that officials were surprised by the extent and impact of supply bottlenecks sparked by Covid.
“What we missed about inflation is that we didn’t predict the supply-side problems,” Powell said, adding that those disruptions are unusual, non-linear and difficult to forecast.
Raimondo agreed with Powell’s comments.
“It’s complex. That means it’s very hard to solve quickly,” Raimondo said. “All the different ways it’s gone wrong: raw materials, labor, logistics, increased demand.”
Although supply chains remain under stress, Biden officials have highlighted recent glimmers of hope.
People are still on edge
Supply chains are starting to “open up,” agreed Joshua Bolten, CEO of Business Roundtable, an influential lobbying group composed of top US executives. But it’s happening “much more slowly than they would like,” he added, referring to member CEOs.
And even as supply chain stress has been improving — Bolten noted recent trends have been “pretty good” relative to where they had been — the group’s concerns echo those of Raimondo.
“They are worried something like Omicron will cause backsliding,” Bolten said.
Meanwhile, on the consumer side, several factors have contributed to a sharp decline in sentiment including high inflation and elevated gas prices in addition to the supply chain. Americans also give the US economy poor marks in polls, despite the strength of the jobs market.
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