US government says it can spend more money to cope with Omicron

By Doina Chiacu

There is still enough money in US state and federal government coffers to help businesses, homeowners and schools get through the latest coronavirus wave propelled by the fast-spreading Omicron variant, White House economic adviser Cecilia Rouse said on yesterday.

The American Rescue Plan was designed to have some of this enduring impact of the pandemic built in,” Ms Rouse told CNBC when asked whether more stimulus money was in the works for pandemic-related needs.

“State and local governments have some remaining money, the federal government is going to be providing homeowners with support for heating bills,” Ms Rouse said.

“So there’s still funds available from the American Rescue Plan to help address keeping our schools open, to help our businesses to get through this wave.”

The Washington Post, citing three unidentified people with knowledge of the matter, reported that White House officials were preparing to ask Congress for more Covid-related health spending as the country weathered the Omicron surge.

US employment increased far less than expected in December amid worker shortages, and job gains could remain moderate in the near term as spiralling Covid-19 cases disrupt economic activity.

Ms Rouse cited how fast Omicron was moving and said that while businesses are dealing with employee absences due to coronavirus exposure or infection, those absences are now shorter.

“So this is a new challenge for our labour market, but we see employers are trying to power through,” she said.

Notwithstanding the disappointing headline jobs figure, Capital Economics said it expected the Fed to hike rates faster than financial markets currently expect. 


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