TOKYO — Last December, after two years of stop-and-go growth, Japan’s economic engine seemed like it might finally be revving up. Covid cases were practically nonexistent. Consumers were back on the town, shopping, eating out, traveling. The year 2021 ended on a high note, with the country’s economy expanding on an annual basis for the first time in three years.
But the Omicron variant of the coronavirus, geopolitical turmoil and supply chain snarls have once again set back Japan’s fragile economic recovery. In the first three months of the year, the country’s economy, the world’s third largest after the United States and China, shrank at an annualized rate of 1 percent, government data showed on Wednesday.
A combination of factors contributed to the decline in growth. In January, Japan had put into place new emergency measures as coronavirus case numbers, driven up by Omicron, moved toward the highest levels of the pandemic. In February, Russia invaded Ukraine, spiking energy prices. And that was before China, Japan’s largest export market and a key supplier of parts and labor to its manufacturers, imposed new lockdowns in Shanghai, throwing supply chains into chaos.
The contraction has not been as “extreme” as previous economic setbacks thanks to high levels of vaccine uptake and less wide-ranging emergency measures than during previous waves of the coronavirus, according to Shinichiro Kobayashi, principal economist at the Mitsubishi UFJ Research Institute.
traced to the outbreak of Covid-19, which triggered an economic slowdown, mass layoffs and a halt to production. Here’s what happened next:
A reduction in shipping. With fewer goods being made and fewer people with paychecks to spend at the start of the pandemic, manufacturers and shipping companies assumed that demand would drop sharply. But that proved to be a mistake, as demand for some items would surge.
Demand for protective gear spiked. In early 2020, the entire planet suddenly needed surgical masks and gowns. Most of these goods were made in China. As Chinese factories ramped up production, cargo vessels began delivering gear around the globe.
Then, a shipping container shortage. Shipping containers piled up in many parts of the world after they were emptied. The result was a shortage of containers in the one country that needed them the most: China, where factories would begin pumping out goods in record volumes.
Demand for durable goods increased. The pandemic shifted Americans’ spending from eating out and attending events to office furniture, electronics and kitchen appliances – mostly purchased online. The spending was also encouraged by government stimulus programs.
Strained supply chains. Factory goods swiftly overwhelmed U.S. ports. Swelling orders further outstripped the availability of shipping containers, and the cost of shipping a container from Shanghai to Los Angeles skyrocketed tenfold.
Consumer spending “will recover from the downward pressure, but because there are these negative factors, the question is how broad will that recovery be?” said Yoshiki Shinke, a senior economist at Dai-ichi Life Research Institute.
Japan’s prime minister, Fumio Kishida, has tried to offset the effects of price increases with large government subsidies for fuel and cash handouts for families with children. But Japanese consumers, wary of the pandemic’s economic effects, have largely been putting rounds of stimulus money into savings.
Japan’s growth is facing diverse challenges, but ultimately its recovery will depend on Covid, analysts said, a common refrain over the last two years.
While Japan has high vaccination rates and has performed better than most other wealthy countries at keeping the pandemic in check, the virus’s protean nature has made it difficult to predict its path. And that has made experts hesitant to commit to any forecasts about its future impact on global economies.
“The big risk is that corona starts to spread again,” said Naoyuki Shiraishi, an economist at the Japan Research Institute. “If a new variant appears, there will be new restrictions on activity, and that will suppress consumption.”
The pandemic’s grip on the economy appears to be loosening. Job growth and retail spending were strong in January, even as coronavirus cases hit a record. New York, Massachusetts and other states have begun to lift indoor mask mandates. California on Thursday unveiled a public health approach that will treat the coronavirus as a manageable long-term risk.
Yet the economy remains far from normal. Patterns of work, socializing and spending, disrupted by the pandemic, have been slow to readjust. Prices are rising at their fastest pace in four decades, and there are signs that inflation is creeping into a broader range of products and services. In surveys, Americans report feeling gloomier about the economy now than at the height of the lockdowns and job losses in the first weeks of the crisis.
In other words, it may no longer be that “the virus is the boss” — as Austan Goolsbee, a University of Chicago economist, has put it. But the changes that it set in motion have proved both more persistent and more pervasive than economists once expected.
“I — totally naïvely — thought that once a vaccine was available, that we were six months away from a complete re-evaluation of the economy, and instead we’re just grinding it out,” said Wendy Edelberg, director of the Hamilton Project, an economic policy arm of the Brookings Institution. “A switch didn’t get flipped, and I thought it was going to.”
computer chips, lumber and even garage doors have held up production of items from cars to houses, while a lack of shipping containers has led to delays in almost anything transported from overseas. Some bottlenecks have let up in recent months, but logistics experts expect it to take months if not years for supply chains to run smoothly again.
disproportionate share of them women — have not.
Diahann Thomas was at work at a Brooklyn call center in January when she got a call from her son’s school: Her 11-year-old had been exposed to a classmate who had tested positive for Covid-19, and she needed to pick him up.
The Coronavirus Pandemic: Key Things to Know
Card 1 of 3
In New York. The New York health commissioner announced that the state would not enforce a booster-shot requirement for health care workers set to take effect on Feb. 21. Too many workers were refusing to comply, leading to worries that the health care system would be disrupted with a mandate in place.
“There are all these moving parts now with Covid — one moment, they’re at school, the next moment they’re at home,” she said.
Ms. Thomas, 50, said her employer declined to provide flexibility while her son was in quarantine. So she quit — a decision she said was made easier by the knowledge that employers are eager to hire.
“It did boost my confidence to know that at the end of this, it’s not going to be difficult for me to pick up the pieces, and I have more bargaining power now,” she said. “There is this whole entire shift in terms of employee-employer relationship.”
Ms. Thomas expects to return to work once school schedules become more reliable. But the pandemic has shown her the value of being at home with her three children, she said, and she wants a job where she can work from home.
Whether and how people like Ms. Thomas return to work will be crucial to the economy’s path in coming months. If workers flood back to the job market as school and child care becomes more dependable and health risks recede, it will be easier for manufacturers and shipping companies to ramp up production and deliveries, giving supply a chance to catch up to demand. That in turn could allow inflation to cool without losing the economy’s progress over the past year.
care for children may not go back to work right away, or may choose to work part time. And other changes may be similarly slow to reverse: Companies that were burned by shortages may maintain larger inventories or rely on shorter supply chains, driving up costs. Workers who enjoyed flexibility from employers during the pandemic may demand it in the future. Rates of entrepreneurship, automation and, of course, remote work all increased during the pandemic, perhaps permanently.
Some of those changes could lead to higher inflation or slower growth. Others could make the economy more dynamic and productive. All make it harder for forecasters and policymakers to get a clear picture of the postpandemic economy.
“In almost every respect, economic ripple effects that we might have expected to be temporary or short-lived are proving to be more long-lasting,” said Luke Pardue, an economist for Gusto, a payroll platform for small businesses. “The new normal is looking a lot different.”
The January jobs report is arriving at a critical time for the U.S. economy. Inflation is rising. The pandemic is still taking a toll. And the Federal Reserve is trying to decide how best to steer the economy through a swirl of competing threats.
Unfortunately, the data, which the Labor Department will release on Friday, is unlikely to provide a clear guide.
A slew of measurement issues and data quirks will make it hard to assess exactly how the latest coronavirus wave has affected workers and businesses, or to gauge the underlying health of the labor market.
“It’s going to be a mess,” said Skanda Amarnath, executive director of Employ America, a research group.
on Twitter and in conversations with reporters that a weak January jobs number would not necessarily be a sign of a sustained slowdown.
Economists generally agree. Coronavirus cases have already begun to fall in most of the country, and there is little evidence so far that the latest wave caused lasting economic damage. Layoffs have not spiked, as they did earlier in the pandemic, and employers continue to post job openings.
“You could have the possibility of a payroll number that looks really truly horrendous, but you’re pulling on a rubber band,” said Nick Bunker, director of economic research for the job site Indeed. “Things could bounce back really quickly.”
loss of purchasing power over time, meaning your dollar will not go as far tomorrow as it did today. It is typically expressed as the annual change in prices for everyday goods and services such as food, furniture, apparel, transportation and toys.
What causes inflation? It can be the result of rising consumer demand. But inflation can also rise and fall based on developments that have little to do with economic conditions, such as limited oil production and supply chain problems.
Is inflation bad? It depends on the circumstances. Fast price increases spell trouble, but moderate price gains can lead to higher wages and job growth.
Can inflation affect the stock market? Rapid inflation typically spells trouble for stocks. Financial assets in general have historically fared badly during inflation booms, while tangible assets like houses have held their value better.
Economists typically pay more attention to the survey of businesses, which is larger and seen as more reliable. But some say they will be paying closer attention than usual this month to the data from the survey of households, because it will do a better job of distinguishing between temporary absences and more lasting effects from Omicron, such as layoffs or postponed expansions.
But economists have also cautioned not to minimize the impact that even temporary absences from work could have on families and the economy, especially now that the government is no longer offering expanded unemployment benefits and other aid.
“There isn’t that much Covid relief funding sloshing about anymore, so absences from work may actually reflect a meaningful decline in income,” said Julia Pollak, chief economist at the employment site ZipRecruiter.
Unusual Patterns
Even in normal times, January jobs data can be tough to interpret. Retailers, shippers and other companies every year lay off hundreds of thousands of temporary workers hired during the holiday season. Government statisticians adjust the data to account for those seasonal patterns, but that process is imperfect. January is also the month each year when the Labor Department incorporates long-run revisions and other updates to its estimates.
“January is a messy month as it is,” Mr. Amarnath said.
This year, it could be extra messy because the pandemic has disrupted normal seasonal patterns. The labor shortage led some companies to hire permanent workers instead of short-term seasonal help during the holidays; others may have retained temporary workers longer than planned to cover for employees who were out sick. If that results in fewer layoffs than usual, the government’s seasonal adjustment formula will interpret that continued employment as an increase.
Other numbers could also be deceptive. The unemployment rate, for example, could fall even if hiring slowed. That is because the government considers people unemployed only if they are actively searching for work, and the spike in Covid cases may have led some to suspend their job searches.
Data on average hourly earnings could also be skewed because it is based on the payroll data — people who aren’t on payrolls aren’t counted in the average at all. Low-wage workers were probably the most likely to be missing from payrolls last month, since higher-wage workers are more likely to have access to paid sick leave. That could lead to an artificial — and temporary — jump in average earnings when policymakers at the Fed are watching wage data for hints about inflation.
A Gallup survey conducted this month found that Americans view the economy more negatively than positively — with only 29 percent saying that the economy is improving, while 67 percent believe it is getting worse.
Still, 72 percent say it is a good time to find a quality job.
“It’s all about what you prioritize,” said Allison Schrager, an economist and senior fellow at the Manhattan Institute, a conservative think tank. Policymakers in Washington decided to err on the side of delivering too much pandemic aid rather than too little — and Ms. Schrager is among the analysts who say the trade-offs of that decision are becoming evident. If there had been less stimulus, she said, “inflation wouldn’t be as bad as it is.”
At a news conference on Wednesday, Jerome H. Powell, the Fed chair, conceded that “bottlenecks and supply constraints are limiting how quickly production can respond to higher demand in the near term” and that “these problems have been larger and longer lasting than anticipated.”
As analysts mull the direction and degree of price increases this year, many see the spring months as a crucial pivot point, said Ellen Zentner, a managing director and the chief U.S. economist at Morgan Stanley. This is partly because the Consumer Price Index reports in March and April of this year will provide the first relatively stable year-over-year comparisons that experts will have seen in three years: 2020 data was juxtaposed with the prepandemic normal of 2019; reports in 2021 after the economy reopened were measured against the abnormal, partly depressed environment of the vaccine-less economy in 2020.
“The hope is that changes as we’re getting into the second quarter,” Ms. Zentner said. And that high-single-digit inflation “doesn’t drag on further into the year.”
During quarterly earnings calls, JPMorgan Chase and Bank of America, which serve a combined 140 million households, have reported that families’ finances are technically better off than before the pandemic. Bank of America said its customers spent a record $3.8 trillion in 2021, a 24 percent jump from 2019 levels. But analysts note that dwindling savings and continuing price increases — along with any new coronavirus variants — could curb consumption.
The report on Thursday indicated that the cash reserves many Americans were able to build up during the pandemic continued to dwindle: Real disposable personal income decreased by 5.8 percent in the fourth quarter, and the personal saving rate — the percentage of overall disposable income that goes into savings each month — was 7.4 percent, compared with 9.5 percent in the third quarter.
WASHINGTON — Companies are bracing for another round of potentially debilitating supply chain disruptions as China, home to about a third of global manufacturing, imposes sweeping lockdowns in an attempt to keep the Omicron variant at bay.
The measures have already confined tens of millions of people to their homes in several Chinese cities and contributed to a suspension of connecting flights through Hong Kong from much of the world for the next month. At least 20 million people, or about 1.5 percent of China’s population, are in lockdown, mostly in the city of Xi’an in western China and in Henan Province in north-central China.
The country’s zero-tolerance policy has manufacturers — already on edge from spending the past two years dealing with crippling supply chain woes — worried about another round of shutdowns at Chinese factories and ports. Additional disruptions to the global supply chain would come at a particularly fraught moment for companies, which are struggling with rising prices for raw materials and shipping along with extended delivery times and worker shortages.
China used lockdowns, contact tracing and quarantines to halt the spread of the coronavirus nearly two years ago after its initial emergence in Wuhan. These tactics have been highly effective, but the extreme transmissibility of the Omicron variant poses the biggest test yet of China’s system.
Volkswagen and Toyota announced last week that they would temporarily suspend operations in Tianjin because of lockdowns.
Analysts warn that many industries could face disruptions in the flow of goods as China tries to stamp out any coronavirus infections ahead of the Winter Olympics, which will be held in Beijing next month. On Saturday, Beijing officials reported the city’s first case of the Omicron variant, prompting the authorities to lock down the infected person’s residential compound and workplace.
If extensive lockdowns become more widespread in China, their effects on supply chains could be felt across the United States. Major new disruptions could depress consumer confidence and exacerbate inflation, which is already at a 40-year high, posing challenges for the Biden administration and the Federal Reserve.
“Will the Chinese be able to control it or not I think is a really important question,” said Craig Allen, the president of the U.S.-China Business Council. “If they’re going to have to begin closing down port cities, you’re going to have additional supply chain disruptions.”
thrown the global delivery system out of whack. Transportation costs have skyrocketed, and ports and warehouses have experienced pileups of products waiting to be shipped or driven elsewhere while other parts of the supply chain are stymied by shortages.
Understand the Supply Chain Crisis
For the 2021 holiday season, customers largely circumvented those challenges by ordering early. High shipping prices began to ease after the holiday rush, and some analysts speculated that next month’s Lunar New Year, when many Chinese factories will idle, might be a moment for ports, warehouses and trucking companies to catch up on moving backlogged orders and allow global supply chains to return to normal.
But the spread of the Omicron variant is foiling hopes for a fast recovery, highlighting not only how much America depends on Chinese goods, but also how fragile the supply chain remains within the United States.
American trucking companies and warehouses, already short of workers, are losing more of their employees to sickness and quarantines. Weather disruptions are leading to empty shelves in American supermarkets. Delivery times for products shipped from Chinese factories to the West Coast of the United States are as long as ever — stretching to a record high of 113 days in early January, according to Flexport, a logistics firm. That was up from fewer than 50 days at the beginning of 2019.
The Biden administration has undertaken a series of moves to try to alleviate bottlenecks both in the United States and abroad, including devoting $17 billion to improving American ports as part of the new infrastructure law. Major U.S. ports are handling more cargo than ever before and working through their backlog of containers — in part because ports have threatened additional fees for containers that sit too long in their yards.
Yet those greater efficiencies have been undercut by continuing problems at other stages of the supply chain, including a shortage of truckers and warehouse workers to move the goods to their final destination. A push to make the Port of Los Angeles operate 24/7, which was the centerpiece of the Biden administration’s efforts to address supply chain issues this fall, has still seen few trucks showing up for overnight pickups, according to port officials, and cargo ships are still waiting for weeks outside West Coast ports for their turn for a berth to dock in.
work slowdowns and shipping delays.
“If you have four closed doors to get through and one of them opens up, that doesn’t necessarily mean quick passage,” said Phil Levy, the chief economist at Flexport. “We should not delude ourselves that if our ports become 10 percent more efficient, we’ve solved the whole problem.”
Chris Netram, the managing vice president for tax and domestic economic policy at the National Association of Manufacturers, which represents 14,000 companies, said that American businesses had seen a succession of supply chain problems since the beginning of the pandemic.
“Right now, we are at the tail end of one flavor of those challenges, the port snarls,” he said, adding that Chinese lockdowns could be “the next flavor of this.”
Manufacturers are watching carefully to see whether more factories and ports in China might be forced to shutter if Omicron spreads in the coming weeks.
Neither Xi’an nor Henan Province, the site of China’s most expansive lockdowns, has an economy heavily reliant on exports, although Xi’an does produce some semiconductors, including for Samsung and Micron Technology, as well as commercial aircraft components.
How the Supply Chain Crisis Unfolded
Card 1 of 9
The pandemic sparked the problem. The highly intricate and interconnected global supply chain is in upheaval. Much of the crisis can be traced to the outbreak of Covid-19, which triggered an economic slowdown, mass layoffs and a halt to production. Here’s what happened next:
A reduction in shipping. With fewer goods being made and fewer people with paychecks to spend at the start of the pandemic, manufacturers and shipping companies assumed that demand would drop sharply. But that proved to be a mistake, as demand for some items would surge.
Demand for protective gear spiked. In early 2020, the entire planet suddenly needed surgical masks and gowns. Most of these goods were made in China. As Chinese factories ramped up production, cargo vessels began delivering gear around the globe.
Then, a shipping container shortage. Shipping containers piled up in many parts of the world after they were emptied. The result was a shortage of containers in the one country that needed them the most: China, where factories would begin pumping out goods in record volumes
Demand for durable goods increased. The pandemic shifted Americans’ spending from eating out and attending events to office furniture, electronics and kitchen appliances – mostly purchased online. The spending was also encouraged by government stimulus programs.
Strained supply chains. Factory goods swiftly overwhelmed U.S. ports. Swelling orders further outstripped the availability of shipping containers, and the cost of shipping a container from Shanghai to Los Angeles skyrocketed tenfold.
Handel Jones, the chief executive of International Business Strategies, a chip consultancy, said the impact on Samsung and Micron would be limited, but he expressed worries about the potential for broader lockdowns in cities like Tianjin or Shanghai.
stay away from any vehicle collisions involving Olympic participants, to avoid infection.
Last year, terminal shutdowns in and around Ningbo and Shenzhen, respectively the world’s third- and fourth-largest container ports by volume, led to congestion and delays, and caused some ships to reroute to other ports.
But if the coronavirus does manage to enter a big port again, the effects could quickly be felt in the United States. “If one of the big container terminals goes into lockdown,” Mr. Huxley said, “it doesn’t take long for a big backlog to develop.”
Airfreight could also become more expensive and harder to obtain in the coming weeks as China has canceled dozens of flights to clamp down on another potential vector of infection. That could especially affect consumer electronics companies, which tend to ship high-value goods by air.
For American companies, the prospect of further supply chain troubles means there may be another scramble to secure Chinese-made products ahead of potential closures.
Lisa Williams, the chief executive of the World of EPI, a company that makes multicultural dolls, said the supply chain issues were putting pressure on companies like hers to get products on the shelves faster than ever, with retailers asking for goods for the fall to be shipped as early as May.
Dr. Williams, who was an academic specializing in logistics before she started her company, said an increase in the price of petroleum and other raw materials had pushed up the cost of the materials her company uses to make dolls, including plastic accessories, fibers for hair, fabrics for clothing and plastic for the dolls themselves. Her company has turned to far more expensive airfreight to get some shipments to the United States faster, further cutting into the firm’s margins.
“Everything is being moved up because everyone is anticipating the delay with supply chains,” she said. “So that compresses everything. It compresses the creativity, it compresses the amount of time we have to think through innovations we want to do.”
Ana Swanson reported from Washington, and Keith Bradsher from Beijing.
A traveller receives a test for the coronavirus disease (COVID-19) at a pre-departure testing facility, as countries react to the new coronavirus Omicron variant, outside the international terminal at Sydney Airport in Sydney, Australia, November 29, 2021. REUTERS/Loren Elliott
Register now for FREE unlimited access to Reuters.com
Register
SYDNEY, Dec 27 (Reuters) – Australia reported its first confirmed death from the new Omicron variant of COVID-19 on Monday amid its biggest daily surge in infections, but the authorities refrained from imposing new restrictions saying hospitalisation rates remained low.
The death, a man in his 80s with underlying health conditions, marked a grim milestone for the country which has had to reverse some parts of a staged reopening after nearly two years of stop-start lockdowns, due to the fresh outbreak.
Omicron, which health experts say appears more contagious but less virulent than previous strains, began to spread in the country just as it lifted restrictions on most domestic borders and allowed Australians to return from overseas without quarantine, driving case numbers to the highest of the pandemic.
Register now for FREE unlimited access to Reuters.com
Register
The authorities gave no additional details about the Omicron death, except to say that the man caught the virus at an aged care facility and died in a Sydney hospital.
“This was the first known death in New South Wales (state) linked to the Omicron variant of concern,” said NSW Health epidemiologist Christine Selvey in a video released by the government.
The man was among seven COVID-19 deaths reported in Australia the previous day. The country clocked 10,186 new cases nationwide, according to a Reuters calculation of state data, its first total over 10,000 since the start of the pandemic. Most new cases were in NSW and Victoria.
“Although we are seeing increased case numbers… we are not seeing the impacts on our hospital system,” said Annastacia Palaszczuk, premier of Queensland which reported 784 new cases with four people in hospital.
With reports of six-hour wait times for COVID testing for people hoping to meet requirements for interstate holiday travel, Palaszczuk defended the tourism-friendly state for mandatory testing, saying “everyone knew when they booked a ticket that if they wanted to come here they would have to do a PCR test”.
However, she added that Queensland was considering whether to relax testing requirements for domestic visitors. Tasmania, another tourist-popular state, also said it was considering changes to state border testing rules.
Around the country, the surge in infections meanwhile weighed on testing resources. Sydney testing clinic SydPath had confirmed a day earlier that it wrongly told 400 COVID-positive people they were negative in the days before Christmas; on Monday it now realised it sent wrong result messages to another 995 people.
Australian authorities have so far resisted a return to lockdown in the face of surging case numbers but have reinstated some restrictions. On Monday, NSW again made it compulsory to check into public venues with QR codes, while many states have brought back mandatory mask-wearing in indoor public places.
The country has also narrowed the window for vaccine booster shots from six months to four months, soon to be three months.
Register now for FREE unlimited access to Reuters.com
Register
Reporting by Byron Kaye; Editing by Michael Perry
Our Standards: The Thomson Reuters Trust Principles.
Barbara Sibley’s four New York restaurants had already weathered the city’s initial Covid-19 wave, the prevaccine surge last winter and this summer’s Delta spike when last weekend it finally happened: Fearing an outbreak and struggling with staffing after one of her workers got sick with Covid, she temporarily shut down one of her locations.
That was only the start of Ms. Sibley’s worries. She also had to weigh how long the employee, who was fully vaccinated, should isolate before returning to the job. And the messaging from public health experts was not clear-cut.
In the early days of the pandemic the Centers for Disease Control and Prevention recommended that most people who tested positive for the coronavirus isolate for 14 days. It later reduced its recommended isolation period to 10 days. But these policies were based on data from unvaccinated individuals and were implemented before the widespread availability of rapid tests. An increasing number of health and policy professionals now suggest that vaccinated people can end their isolation after five to seven days, so long as they are not symptomatic and they test negative.
On Thursday, the C.D.C. reduced, in some circumstances, the number of days it recommends that health care workers who test positive for the coronavirus isolate themselves, but it did not address other businesses.
said on Friday that fully vaccinated critical workers could return to work five days after testing positive, so long as they have no symptoms or their symptoms are resolving and they have had no fever for 72 hours. Those workers will also have to wear a mask, she said.
Omicron has intensified staffing shortages across industries, and the spike in cases has disrupted travel during the holidays, stranding thousands of customers and underscoring the economic toll of employees needing to isolate. Already, some economists are warning about the potential impact that shutdowns can have on consumer spending.
Delta Air Lines asked the C.D.C. on Tuesday to cut isolation time to five days for fully vaccinated people, warning that the current 10-day period may “significantly impact” operations. It was followed by JetBlue and Airlines for America, a trade group that represents eight airlines.
eliminated weekly testing for vaccinated players who are asymptomatic, with its chief medical officer saying the pandemic had reached a stage in which it’s unnecessary for vaccinated players to sit out if they feel healthy.
canceled performances through Christmas. CityMD, the privately owned urgent care clinic, temporarily shut 19 sites in New York and New Jersey because of staffing shortages. At least a dozen New York restaurants have temporarily closed in response to positive tests.
“I think lots of companies are looking at a lot of disruption in the next month and trying to put in policies right now, because they know their employees are going to get infected in very high numbers,” said Dr. Jha.
The United States might take direction from policy shifts abroad. Britain said on Wednesday that it was reducing to seven from 10 the days that people must isolate after showing Covid-19 symptoms.
After the British government lifted nearly all its pandemic restrictions in July, hundreds of thousands of workers were pinged by the National Health Service’s track-and-trace app and told to isolate because they had been exposed to the coronavirus. Businesses complained of being short-staffed, and economists said the “pingdemic” may have slowed economic growth in July.
In the United States, new tools to help manage through the pandemic are on the way.
The Food and Drug Administration this week authorized two pills to treat Covid, from Pfizer and Merck. Those treatments have been shown to stave off severe disease and have potential to reduce transmission of the virus, though supply of both pills, especially Pfizer’s, will be limited in the next few months.
President Biden said on Tuesday that he planned to invoke the Defense Production Act to buy and give away 500 million rapid antigen tests, a crucial tool in detecting transmissibility, though those tests will not be available for weeks or longer.
If a combination of the antiviral pills and rapid tests is able to get individuals back to work faster, “that’s a big economic point,” said Dr. Eric Topol, a professor of molecular medicine at Scripps Research.
Molly Moon Neitzel, who owns an ice cream business in Seattle with just over 100 employees, said she had kept guidelines for isolation conservative.
“I’m on the side of protecting people over getting them back to work right now,” she said, adding that if it were summer and her business were busier, she might consider a shorter isolation period. “It’s the slowest time of the year for an ice cream company, so that is in my favor.”
Some public health experts worry that if the C.D.C. shortens its guidelines on isolating, employers could pressure workers to get back before they’re fully recovered.
“What I don’t want to see happen is for this to be used as an excuse to force people to come back while they are unwell,” Dr. Ranney of Brown said.
And even with clearer guidelines, putting policies in place can be tricky. While some experts suggest different isolation rules for vaccinated and unvaccinated employees, some companies do not yet have a system for tracking which of their workers have gotten a vaccine. The question of whether the C.D.C. will change its definition of fully vaccinated to include booster shots adds another layer of complexity.
It’s not just sick employees who may have to stay home: Companies are also grappling with whether vaccinated workers should quarantine after exposure to someone with Covid-19, which C.D.C. guidelines do not require.
“It becomes a challenge for employers to choose between providing a safer environment and keeping staff intact, or going with the C.D.C. guidance,” said Karen Burke, an adviser at the Society for Human Resource Management.
But almost two years into the pandemic, that’s the position that employers continue to find themselves in, amid an ever-flowing cascade of new data, guidelines and considerations.
“Every moment, you’re making life or death decisions,” Ms. Sibley said. “That’s not what we signed up for.”
MADRID — Covid-19 infections were rising all across Spain, but the message from the country’s leader was clear: The government was not entering 2022 with the restrictions of 2020.
“The situation is different this time, and because of that, we’re taking different measures,” Pedro Sánchez, the prime minister, said this week, adding that he understood his people had grown impatient with the pandemic and that he was “fully aware of the fatigue.”
Across Europe, that fatigue is as palpable as the dampened Christmas spirit. The fatigue of another named variant of the coronavirus and another wave of infections. The fatigue of another grim year watching New Year’s Eve gatherings get canceled or curtailed, one by one.
But along with the exhaustion, another feeling is taking root: that the coronavirus will not be eradicated with vaccines or lockdowns, but has become something endemic that people must learn to live with, maybe for years to come.
reducing the risk of severe disease and hospitalization, according to recent studies.
Pfizer and Merck. The new drugs, which can be taken at home with a doctor’s prescription, will be available to some Covid patients who are at higher risk of becoming severely ill.
“I worry a bit because we don’t know much about Omicron,” Susanne Sesterer, 63, a retiree in Hanover, Germany, said on Thursday as she was doing her last shopping before Christmas. “But how much worse can it get?”
Others were giving up.
Dorotea Belli, a 42-year-old Italian who has had two vaccine doses, said she would not go to a family gathering for Christmas and instead stay home in Rome. Many of her colleagues had tested positive for the virus, she said, and her children, 4 and 1, are not eligible for vaccination.
“They and I will miss my parents very much,” she said. “But I don’t want to bring Covid around, and even if my husband and I are vaccinated, who knows?”
Spain’s calculus on new restrictions is not only factoring in the all-important holidays, but also legal barriers that emerged after measures taken by the government in 2020.
In July, Spain’s Constitutional Court ruled that the government did not have the authority to impose the lockdown measures that began in March 2020, which restricted Spaniards from leaving their homes except for essential trips like food shopping. Instead, the judges said, the measures required a full parliamentary vote, which few see passing with a majority in the future given how controversial the previous restrictions were.
“The government has its hands tied now,” said Luis Galán Soldevilla, a law professor at the University of Córdoba.
Spain’s lighter measures announced on Thursday received criticism from some sectors, like the Spanish Society of Public Health and Health Administration, a group that includes many health professionals.
“These measures don’t help much,” said Ildefonso Hernández, the group’s spokesman, saying limiting capacity indoors would be more effective. “It makes no sense that people walk the street with a mask and then take it off when they enter a bar.”
In Madrid, residents were charging ahead with their Christmas plans, despite the rising caseload and risks.
Fernando Sánchez, 55, a taxi driver, lost his mother and brother to Covid-19 six months ago. Nevertheless, he was unwilling to cancel his Christmas plans, which this year take place at the home of his in-laws, much as they had before the pandemic.
Antonio Jesús Navarro, 33, a software engineer, had been looking forward to spending Christmas with his girlfriend, who had traveled to Spain for the holidays from the United States. The two had not seen each other since before the pandemic began.
But then Mr. Navarro learned he had come into contact with someone who had tested positive for the coronavirus. The couple were isolating until he could get his own test results. He said he was frustrated with public messaging on how to stay safe from Omicron.
“Is an antigen test acceptable?” he said by telephone. “What happens if there are no symptoms?”
Hours later, Mr. Navarro called back to say he and his girlfriend had tested positive for Covid-19.
Nicholas Casey and José Bautista reported from Madrid, and Constant Méheut from Paris. Reporting was contributed by Raphael Minder from Geneva; Gaia Pianigiani from Rome; Christopher F. Schuetze from Hanover, Germany; and Léontine Gallois from Paris.
“You could feel Christmas was coming,” Amanda Whiteside, a manager at Gordon’s Wine Bar in London, said of the crowds and buzz. “And then it was gone.”
Throughout Britain and in other parts of Europe, new government restrictions combined with heightened anxiety over the highly contagious Omicron variant of the coronavirus have drastically reduced business at restaurants, pubs, event venues and stores, prompting urgent calls for additional government assistance.
In Britain, the government responded Tuesday, announcing 1 billion pounds ($1.3 billion) in aid for the hospitality industry, with one-time grants of £6,000 and rebates for employees’ sick leave.
The additional assistance was promised as a fresh wave of anxiety over the economy washes over the region. In France, government ministers announced Tuesday additional aid up to 12 million euros for travel agencies, events, caterers and indoor leisure companies that suffer big operating losses this month.
Spain, the government has scheduled an emergency meeting with regional leaders on Wednesday to discuss whether to adopt new restrictions. Italy’s government is meeting on Thursday.
“We are in a different phase now where lockdown will be potentially more costly,” said Claus Vistesen, chief eurozone economist at Pantheon Macroeconomics. “Up until now, we’ve been used to lockdowns followed by support from the government. I think that will be the case as well, but support will be more conditional, less comprehensive than before.”
Britain recorded the highest number of Covid-19 cases in Europe over the last seven days, according to the World Health Organization.
On Monday, organizations representing more than 100,000 businesses around the country sent an open letter to Prime Minister Boris Johnson, demanding more tax relief and grants to tide them over.
new requirements that customers must show proof of vaccination or recent recovery. And in the Netherlands, where the government announced a lockdown over the weekend, calls to the nation’s business registry asking for help climbed past 400 on Monday — seven times the number logged the previous Monday.
known as Plan B, on Dec. 8 as a response to Omicron, cancellations have been rolling in and foot traffic has disappeared in some areas.
At Gordon’s Wine Bar, it was common to find every table in its cavelike cellar and on its outdoor patio full and a long line of customers waiting. Then Plan B was put in place.
The drop-off, said Ms. Whiteside, the administrative manager, “was very dramatic.”
Customers thinned out, and several staff members got Covid, she said. Gordon’s is now offering only outside service, and Ms. Whiteside estimates that sales are down 25 percent.
Half a mile away, in Soho, the Coach and Horses pub was similarly contending with fewer customers and sick staff. Last week, business was off by a third, while on Monday it fell “off the edge of a cliff,” said Alison Ross, the manager.
Kaasbar Utrecht, is shuttered, and $100,000 at the cafe. Plans to rebuild a nightclub he owns that was burned in a fire in January have been postponed. He has had to let go most of his 80-person staff and is now trying to make money selling mulled wine in the streets and cheese packages door to door.
Mr. Waseq said that because he opened his business after the pandemic began and did not have 2019 sales to use as a benchmark comparison, he was not eligible for government assistance.
Ron Sinnige, a spokesman for the national business registry, the Kamer van Koophandel, said the agency was flooded with calls this week asking about financial assistance, advice or liquidating their operations. Some were seeking guidance on how to qualify as an essential business — could a clothing store sell candy and soda, could a beauty salon offer postsurgical massages or list Botox injections as a medical procedure?
The questions were a sign of people’s creativity and despair, Mr. Sinnige said. “As opposed to previous lockdowns, people are really at the end of their financial flexibility and emotional flexibility,” he said.
France has canceled a menu of year-end celebrations and barred tourists from Britain, a blow to the ski industry.
On Tuesday, the Swedish government imposed some new restrictions that included allowing only seated customers to be served in restaurants and bars.
Ireland imposed an early curfew of 8 p.m. on restaurants and bars that began on Monday, while limiting attendance at events.
In Denmark, restaurants and bars must cut off serving alcohol after 10 p.m., and a slate of venues and event spaces including theaters, museums, zoos, concert halls and Tivoli, Copenhagen’s landmark amusement park, have been closed.
Switzerland’s restrictions that bar unvaccinated people from going to restaurants, gyms and museums are expected to last until Jan. 24.
In Germany, the check-in process at stores, which requires stopping everyone at the door and asking to see vaccination certification and an ID, was deterring shoppers at what would normally be the busiest time of the year, the German Trade Association said.
Retailers surveyed by the group reported a 37 percent drop in sales from Christmas 2019.
“After months of lockdowns, the restrictions are once again bringing many retailers to the edge of their existence,” said Stefan Genth, head of the Trade Association.
A court in the northern state of Lower Saxony last week threw out the restrictions there, after the Woolworth department store chain challenged them on grounds that they were not fairly applied and that requiring shoppers to wear masks provided sufficient protection. The ruling on Thursday raised hopes that other states would follow its lead, giving a final boost to last-minute shoppers.
“Last weekend was better, but overall the shopping season has been more than depressing,” said Mark Alexander Krack, head of the Lower Saxony Trade Association.
“You can’t really mandate booster shots yet,” he said. “It hasn’t been signed off on by any federal agency.”
JPMorgan Chase, whose decision to require vaccines is complicated by its sprawling retail operations across the United States, declined to comment on how the court’s most recent decision, along with the recent spike in cases, affects any plans to mandate vaccines. But the bank on Friday told its American employees who do not work in bank branches that “each group should assess who needs to come into the office, work priorities and who should revert to working from home on a more regular basis over the next few weeks.”
Walmart, which has mandated vaccines for mainly its corporate staff, also did not have any comment on broadening that requirement. Only 66 percent of its roughly 1.6 million U.S. employees are vaccinated, according to data compiled by the Shift Project at the Kennedy School of Government at Harvard.
Legal questions about the OSHA rule are far from resolved. Immediately after the U.S. District Court of Appeals for the Sixth Circuit ruled on Friday, several of the many plaintiffs who have challenged that rule asked the Supreme Court to intervene as part of its “emergency” docket. Appeals from the Sixth Circuit are assigned for review by Justice Brett Kavanaugh, who under Supreme Court rules could in theory make a decision on his own but is more likely to refer the matter to the full Supreme Court. With the Labor Department now delaying full enforcement of its rule until Feb. 9, the justices have several weeks to ask for abbreviated briefings if they want them.
“Things are going back and forth literally in a matter of hours,” said Sydney Heimbrock, an adviser on industry and government issues at Qualtrics, who works with hundreds of clients on using the company’s software to track employee vaccination status. “The confusion stems from the on-again-off-again, is it a rule or isn’t it a rule? The litigations, appeals, reversing decisions and making decisions.”
Even the spread of Omicron hasn’t changed the position of some of the vaccine rule’s most ardent opponents. The National Retail Federation, one of the trade groups challenging the administration’s vaccine rule, is among those that have filed a petition with the Supreme Court. The group is in favor of vaccinations but has pushed for companies to get more time to carry out mandates. Still, even as it fights the administration’s rule, the federation is also holding twice weekly calls with members to compare notes on how to carry it out.
“There’s no question that the increased number of variants like Omicron certainly don’t make it less dangerous,” said Stephanie Martz, the group’s chief administrative officer and general counsel. “The legitimate, remaining question is, is this inherent to the workplace?”
/cloudfront-us-east-2.images.arcpublishing.com/reuters/NJKG4WJGJNJX3FF2FBGFMUMJHM.jpg)
