The economy is still far from normal

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By Hanna Ziady, CNN Business

Back in the spring, as the rhythm of vaccinations grew rapidly and growth forecasts have improved, companies hoped that in the fall, economic activity would be largely back to normal.

Well, September has arrived but the return to normal that many were waiting for remains elusive.

What’s happening: Developments over the past 10 days indicate that major economies are still grappling with some of the same issues they faced earlier in the pandemic, such as the increase in coronavirus cases, even s ‘they are simultaneously grappling with longer term challenges.

Microsoft on Thursday scrapped plans to fully reopen U.S. offices next month over concerns about the Delta variant. Many companies had anticipated the return of employees after Labor Day, but that deadline has come and gone with some companies, such as Amazon and Facebook, now looking to 2022 to reopen workplaces.

Meanwhile, major conventions – including the National Rifle Association’s annual meeting in Houston and the Specialty Food Association’s Fancy Food Show in New York City – have been canceled or moved online due to increased cases of Covid, in a development that looks a lot like April 2020.

This is having an effect on airlines, which anticipated a resumption of business travel with the reopening of offices and the resumption of in-person conferences.

See here: Southwest has warned investors that a drop in bookings and an increase in cancellations mean it no longer expects to stay in the dark for the third quarter, despite a profitable July.

Supply chain issues from the pandemic and labor shortages continue to weigh on businesses, threatening to derail the next holiday shopping season and further undermine the recovery.

Mark Zandi, chief economist at Moody’s Analytics, now expects the US economy to take until 2023 for return to full employment.

Data point: Signs of the Delta variant taking a heavy toll are starting to appear in economic data. UK GDP growth slowed sharply in July, posting its smallest monthly increase since February, the Office for National Statistics said on Friday.

Price increases linked to booming supply chains and staff shortages due to Covid-19’s self-isolation requirements have played a role, the ONS said. The UK economy remains 2.1% smaller than before the pandemic and economists in Berenberg now expect it to reach its pre-pandemic level in the second quarter of 2022 instead of the first.

CNN company Return to normal index, which tracks a series of indicators to measure to what extent U.S. economic activity has returned to its pre-pandemic level, has declined slightly since late August.

And Goldman Sachs economists have lowered their GDP growth forecasts for the United States and China this year.

It is no wonder that policymakers in Europe and Australia are very gradually cutting stimulus packages.

Lose patience: The Delta variant not only jeopardizes the economic recovery of the United States, it also increases the number of deaths and hospitalizations, especially among the unvaccinated.

To an extraordinary extent, President Joe Biden on Thursday ordered the Department of Labor to require all employers with more than 100 workers to prescribe either the vaccine or regular testing.

In the meantime, the world economy will have to wait a little longer to return to normal.

China sells its precious oil reserves

China has been storing oil for years to ensure it can meet the energy needs of its vast economy.

Today, the government is selling strategic reserves with the aim of lowering prices and easing inflationary pressures.

The latest: The country’s State Bureau of Grain and Material Reserves announced Thursday night that it would sell crude oil to refining and petrochemical companies to “better stabilize domestic market supply and demand. and effectively guarantee national energy security ”.

Oil prices plunged on the news, dropping to their lowest level in two weeks, reports my CNN Business colleague Laura He.

The government has not said how much oil it will end up selling (China is generally discreet about its crude reserves), but the move is further evidence that the world’s second-largest economy faces major challenges exiting the pandemic.

Inflation is skyrocketing due to rising commodity prices and energy costs are skyrocketing, with increased demand causing power shortages in some provinces. Manufacturing and services activity has slowed, and the government has warned that rising raw material costs will exacerbate challenges for growth and jobs.

JPMorgan has a plan to attract big spenders

JPMorgan wants to attract affluent customers who spend a lot on dining out using their credit cards. Maybe he found a way to do it.

The largest US bank in terms of assets said Thursday that he buys The Infatuation, a restaurant discovery platform that shares reviews and recommendations on where to eat. The company, present in 50 cities in the United States, also has the Zagat Restaurant Guide.

Through the partnership, JPMorgan will deliver “benefits” to Chase cardholders, a spokesperson told my CNN Business colleague Alexis Benveniste. This could include giving customers special access to live dining events and a bi-coastal food festival called Eeeeeatscon.

Bottom Line: It’s an unusual decision for a bank to buy a media business, but when you’re competing for big spenders, all the perks come in handy.

Following

Kroger reports earnings before US markets open.

Coming next week: A wealth of economic data from China, the United States and Europe will provide more clues as to how the recovery is shaping up.

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