US | Recovery Tracker can’t shake the January chills

The US Recovery Tracker dropped 2.2ppts in the week ended January 21, falling to 97.8 as Omicron and dramatic financial market volatility brought the tracker down to its lowest level since May.

What you will learn:

• Financial conditions tightened by the most since news of the Omicron variant first broke, and health conditions deteriorated for a 10th straight week. Demand and employment weakened as the Omicron wave dragged on consumer spending and hiring.
• Our State Recovery Trackers show conditions deteriorated in all regions except the East. North Carolina, Texas, and Michigan lost the most ground among the most populated states.
• While the economy is slowly moving past the latest Covid wave, a hawkish Fed and less accommodative financial conditions will weigh on the recovery. But we’re optimistic the economy will find a stronger footing as health conditions improve, income growth remains buoyant (after a Q1 lull), and services spending recovers.