By the end of the fourth quarter, however, the milder but more contagious omicron variant was leading shoppers to hunker down again. Retail sales fell 1.9% in December. The pullback is likely to hinder economic growth more substantially the first three months of 2022, says Ian Shepherdson, chief economist of Pantheon Macroeconomics.
Delta “caused less disruption both to consumer demand and labor supply,” Shepherdson wrote in a note to clients. He expects the economy to grow at just a 1% annual rate in the current quarter.
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