What real-time indicators suggest about Omicron’s economic impact

WHAT IS THE economic impact of Omicron? The latest variant of the coronavirus has let rip at such a ferocious pace that forecasters are still catching their breath, and it will be some time before its economic effects become apparent in the official data, which are published with a lag. But a number of speedier, albeit partial, indicators can provide some insight into how consumers and workers may be adjusting their behaviour.Consider first people’s willingness to go out and about. A mobility index using real-time data from Google and constructed by includes visits to workplaces, retail and recreation sites, and transport hubs. This measure has been reasonably stable in America, albeit at levels below pre-pandemic norms, and has fallen a little in Britain and Germany in recent days. But underlying those headline figures are bigger differences depending on the kind of activity. The return to the office seems to have stalled. In America and Germany journeys to workplaces fell to about 25% and 16% below pre-pandemic levels, respectively, in the week to December 23rd. In Britain, where the government has issued guidance to work from home, they were 30% lower (see chart 1). By contrast, retail- and recreation-related activity has continued to recover in all three countries. This suggests that people may have become more discriminating about when to leave the house, especially as the festive season began. It might also indicate that people who can easily work from home were doing so, a sign of the economy’s increased adaptability to new variants.