(CNN) – Commerce Minister Gina Raimondo fears the Omicron coronavirus variant will put additional pressure on already strained global supply chains.
“It is too early to tell. But I’m worried, because we know people are afraid to go to work,” Raimondo told CNN in an interview at her office in Washington.
Raimondo pointed at lack of workers impacts a wide range of businesses in the United States.
“Part of it is that people are afraid to go to work,” Raimondo said. “In manufacturing facilities, people work face-to-face, close to each other. And there have been outbreaks. We have had problems in places where people work in close proximity.”
The outbreak from the Delta variant exacerbated supply chain turmoil earlier this year, prompting computer chip and other factories to close, particularly in Asia.
“It’s too early to tell, but I think it’s true – not just because of the outbreaks, but because people’s fear emerges. Raimondo said.
“I can’t say it enough times: Get vaccinated. If everyone gets vaccinated, that helps a lot,” Raimondo said. “I would be less worried if 95 percent of Americans were vaccinated, because it takes no guesswork.”
The Commerce Secretary acknowledged this is a global problem given the complex nature of supply chains, meaning an outbreak on the other side of the globe could cause higher prices and layoffs of American workers. For example, the price of new cars in October rose the most since the 1970s because automakers couldn’t get all the computer chips they needed to build cars.
Supply shock at the heart of inflation
During Tuesday’s hearing, Federal Reserve Chairman Jerome Powell said that officials were surprised at the extent and impact of supply bottlenecks caused by Covid.
“What we missed on inflation was that we didn’t anticipate supply-side problems,” said Powell, adding that those disruptions were unusual, non-linear and difficult to predict.
Raimondo agrees with Powell’s comment.
“It’s complicated. That means it’s very difficult to deal with quickly,” Raimondo said. “All the different ways are wrong: raw materials, labor, logistics, increased demand.”
Although the supply chain remains strained, Biden officials have highlighted recent glimmers of hope.
In one blog post This week, the White House pointed out that the number of container ships stranded in harbors for nine days or more has dropped by 41 percent since November 1, to 75,000. And shelf availability is 90%, down just one percentage point from February 2020, according to market research firm IRI.
‘People are still competing’
Joshua Bolten, CEO of Business Roundtable, an influential lobbying group comprised of top US executives, agrees. But it happened “much slower than they would have liked,” he added, referring to member CEOs.
And even as supply chain tensions are improving – Bolten noted that recent trends are “pretty good” for where they are – the group’s concerns echo Raimondo’s.
“They were worried that something like Omicron would cause backsliding,” says Bolten.
Meanwhile, on the consumer side, a number of factors contributed to the sharp decline in sentiment including high inflation and rising gasoline prices alongside the supply chain. Americans also score the US economy poorly in the polls, despite the strength of the job market.
Raimondo, the former governor of Rhode Island, said she is not disappointed with the polls because they reflect the reality of the situation.
“I’m not disappointed because it’s… That’s how people are feeling. People are still on guard and worried. I think it’s mostly Covid,” she said. “Every time we think we’ve made it through, there’s a new mask mission. Every time we think we’re on the right track, a new variation pops up. That creates a degree of uncertainty. And I know from being governor when people feel uncertain, it shows in the polls. “
Raimondo expressed optimism that another year will pass and everyone will feel a lot better.
“All of this is temporary,” Raimondo said, “but right now, it just doesn’t feel great.”
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https://baltimore.cbslocal.com/2021/12/01/heres-how-omicron-could-make-the-supply-chain-mess-worse/ Here’s How Omicron Could Make Supply Chains Worse – CBS Baltimore