For the Economy, Those Sick Days Are Still Adding Up

 A lot of Americans think they are through with Covid-19. But Covid isn’t yet through with them.

It is something that, as more and more people engage in activities that seem “normal,” like going into the office a few days a week, can be hard to bear in mind. But when thinking about the U.S. economy—particularly the job market—bearing it in mind is necessary.

How prevalent Covid is right now is hard to ascertain. The number of daily reported cases has been falling since July, suggesting that the wave caused by the highly transmissible BA.5 subvariant has crested. But with so many people using at-home tests, or merely staying home when they are symptomatic, lab-identified Covid case counts aren’t a great indicator of how many people are infected. For example, Boston-area wastewater data show a jump in virus concentrations over the past month, but its case count has been basically flat.

Newly released figures from the Census Bureau, based on surveys conducted over a 13-day span in the middle of last month, show that an estimated two million people were out of work because they were either sick with Covid or caring for someone who was, which compares with 2.5 million in a survey conducted in late July and early August, but is still a lot of people. Care should be taken when it comes to these figures, too, but it is probably safe to say that Covid is still playing havoc with the workforce. That probably matches with the experience of most people working at a business of any size: It seems like there is always somebody out with Covid.

For the job market, that matters. Even with the Labor Department reporting this week that there was a drop in job openings last month, there are still a ton of vacancies that employers are trying to fill. Sick job seekers, and sick human-resources officers, makes hiring harder. It also matters for workplace productivity—having a rotating cast of employees out sick makes it harder to get things done. Employers might have to hire extra workers to account for the fact that some will be out sick at any given time. Long Covid’s toll on workers, as well as the many people who are unwilling to work for fear of becoming sick, pose additional problems.

All of this makes it difficult to judge how tight the job market really is right now relative to history, for investors and, crucially, for policy makers such as the members of the Federal Reserve’s rate-setting committee. Our inability to forecast what will happen with the virus next makes things even worse. Will there be a winter wave? More highly transmissible subvariants that are able to evade the immune response from prior infection or vaccination? When will Covid-19 become endemic, circulating among the population more predictably?

There is also a question of what endemic—a description that spans diseases from the common cold to malaria—will look like. Not knowing the answer to that also means not knowing what kinds of constraints Covid will put on the labor market. While it is reasonable to hope that Covid’s drag on the labor market will lessen over time, it might never entirely go away.

The new bivalent vaccine might be the first step in developing annual Covid shots, which could follow a similar process to the one used to update flu vaccines every year. Here’s what that process looks like, and why applying it to Covid could be challenging.

https://finnoexpert.com/2022/10/06/for-the-economy-those-sick-days-are-still-adding-up/