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Omicron Roundup: Growth, Hospital Surge, Restaurants and Gyms Seek Aid

Small bars, gyms, and minor league sports teams lobby Congress for additional funding as a surge in cases flood hospitals.
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Number of Covid-19 Parients Hospitalized

Restaurants Seek Federal Aid    

It's been another hard winter prompting Restaurants to Seek Federal Aid.

Small restaurants are heading back to Congress for help, saying their challenges are worsening as the Omicron variant drives a surge in Covid-19 cases across the country.

Nearly two years into the pandemic, U.S. restaurants and bars are dealing with higher costs, accumulating debts and customers fearful of the latest virus variants, according to a letter signed by more than 3,300 operators and sent to Washington lawmakers in December. The restaurant operators said they were in danger of closing permanently if a federal fund adopted last year to assist the food-service industry isn’t replenished soon.

“I can’t go into further debt to salvage this restaurant,” said Dwayne Allen, owner of the Breadfruit & Rum Bar in Phoenix, who fell behind on his restaurant’s rent after closing the business for long stretches during the pandemic. He said he has to pay his landlord in full by the end of January and has taken out a $48,000 loan to do so.

“I have no idea where that money is going to come from,” said Mr. Allen, who signed the letter organized by the Independent Restaurant Coalition, an advocacy group for small operators formed in 2020 in response to the pandemic.

Sara Lund, owner of the Bodega and The Rest bar and restaurant in Salt Lake City, said she entered the pandemic debt-free but has accrued more than $100,000 in loans and credit-card balances since. She said she recently transferred the last of her personal savings to cover her property taxes and payroll.

“There is nothing left. I’m at the end,” said Ms. Lund, who was among restaurant operators advocating for more federal funding.

Minor League Teams Seek Aid

It's not just the restaurant industry. An Omicron Surge Spurs New Covid-19 Relief Push in Congress

Hotels, fitness clubs, tour bus companies and minor league ball clubs are part of a long line of businesses seeking billions of dollars in new Covid-19 relief aid—if they can overcome opposition from many Republicans who say Congress has already given enough.

“The U.S. government has no money to give anyone,“ said Sen. Rand Paul (R., Ky.). ”In the past two years, Congress piled on several trillion dollars to our already substantial deficit. This unprecedented accumulation of debt is causing today’s inflation and will continue to wreak havoc in the future.”

Industry lobbyists are targeting legislation being crafted by Sen. Ben Cardin (D., Md.), the chairman of the Senate Small Business Committee, who had found an ally in Sen. Roger Wicker (R., Miss.) for a bill that would deliver roughly $60 billion in grants from the Small Business Administration.

Gym owners say the PPP wasn’t much help to them because they have few employees and a greater share of expenses from facility leases and insurance. Their lobbyists are now pressing Congress for a $30 billion aid package, which is roughly what they say gym owners have lost from the start of the pandemic through June 2021. Roughly one in five health clubs permanently shut down.

The hotel industry is pushing legislation in the House and Senate that calls for the Treasury Department to cover roughly $20 billion in salary and benefit payments to employees of hotels that have seen revenue losses of 40% or more. The legislation has the backing of Unite Here, the labor union that represents about 300,000 hotel, laundry and food service employees.

Omicron Surge Pressures U.S. Hospitals

Surgeon General Vivek Murthy warns of tough weeks ahead as the Omicron Surge Pressures U.S. Hospitals

Americans shouldn’t expect the Omicron variant to peak nationwide in coming days, the U.S. surgeon general warned Sunday, as Covid-19 cases continue to rise and put more pressure on hospitals.

“The next few weeks will be tough,” Dr. Vivek Murthy said during an appearance on CNN’s “State of the Union.”

The seven-day average for confirmed and suspected Covid-19 hospitalizations is at the highest recorded level, with about 155,958 reported Sunday, after topping old records last week, data from the U.S. Department of Health and Human Services show. The seven-day average for newly reported cases also reached nearly 808,000 a day on Saturday, the first time it has topped 800,000, data from Johns Hopkins University show.

Dr. Ashish Jha, the dean of the Brown University School of Public Health, said on “Fox News Sunday” that Covid hospitalizations have either peaked or will soon in New York, New Jersey and parts of New England and Florida. But he said the rest of the country hasn’t yet seen the worst of the Omicron surge.

Omicron, Inflation Drive Down U.S. Growth Outlook

Finally, please consider Omicron, Inflation Drive Down U.S. Growth Outlook

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The outlook for economic growth in the first quarter and 2022 is darkening amid the latest wave of Covid-19, as consumers grapple with high inflation and businesses juggle labor and production disruptions.

Forecasters surveyed by The Wall Street Journal this month slashed their expectation for growth in the first quarter by more than a percentage point, to a 3% annual rate from their forecast of 4.2% in the October survey.

The combination of higher inflation, supply-chain constraints and the fast-spreading Omicron variant caused economists to trim their forecast for growth to 3.3% for the current year as a whole, based on the change in inflation-adjusted gross domestic product in the fourth quarter of 2022 from a year earlier, from 3.6% in October. Last year, output rose 5.2%, economists estimate.

Higher inflation and low unemployment mean economists expect the Fed to start increasing borrowing costs soon. Nearly two-thirds expect the Fed to raise rates at its March 15-16 policy meeting and keep raising them over the course of the year. Over half of forecasters expect three rate increases this year, while nearly a third expect more than three.

No Decoupling

The Fed is likely to get in a couple of hikes this year but it is by no means certain.  Beyond that, I don't know. 

As for 3 or 4 this year and three more next year, my position has not changed.

On December 15, 2021 I penned The Fed Expects 6 Rate Hikes By End of 2023 - I Don't and You Shouldn't Either

The US economy appears to be cooling more than people understand. GDP Forecasts Stumble Then Take a Dive After Retail Sales Data

Advance Retail Sales Month-Over-Month 2021-12

Outside the US, Europe and China are both struggling. 

China did not decoupled from the global economy in 2007 and the US won't in 2022.

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