HARLINGEN, Texas (ValleyCentral) — The COVID-19 pandemic has caused some big single-day swings in the stock market, most recently when the omicron variant was discovered.
One word you hear a lot with the pandemic is unprecedented. Which any economics professor or textbook will tell you is the opposite of what traders in the stock market want to hear.
The reason the stock market and the future price of oil dropped when the omicron variant was announced was that no one is certain how dangerous this variant will be, and therefore they don’t know if COVID precautions will need to return.
“The economy is likely to slow down, either because there will be less traveling or whatnot,” said Salvador Contreras, an economics professor. “What does this mean with what the FED will do? And so, the markets just reacted with a certain degree of uncertainty.”
Already the stock market has recovered from the brief dip and oil prices are trending upward despite reports that the omicron variant has been detected in several U.S. states.
Contreras said that hasn’t stopped the U.S. economy from moving back toward normal.
“It appears many people already have COVID fatigue, so, people want to get back to whatever normal was before this. And employers want a return of some normalcy as well,” Contreras said.
The jobs report released on December 3 shows unemployment is almost back down to the level it was before the pandemic began.
“It reinforces the fact that, at least in the employment side, we’re back to normal. In fact, there’s labor shortages depending on who you ask,” Contreras said about the improved jobs report.
Contreras said that the fourth quarter of the year usually has the lowest level of unemployment due to seasonal hirings, and that number will likely get worse next year.
“Generally, we expect the unemployment rate to jump a little bit in the first quarter of 2022, or the first quarter of the year,” he said.