Delta variant hitting economic recovery, so what's next?

WASHINGTON (SBG) — With children back in school, and many others back to work, and an outpaced demand for everything from food to flights to fuel, September was supposed to be the road to revival.

But the August jobs numbers, with just 235,000 new ones added, was nothing short of disappointing and capped off a summer of struggle, with the most likely biggest barrier to major growth being the delta variant.

At the end of the day, the virus is driving the economy. It’s not even always necessarily restrictions that are driving it. It’s the way people respond," said Professor Jay Shambaugh, who teaches Economics and International Affairs, and is the Director of the Institute for International Economic Policy at George Washington University.

Shambaugh said health fears by individuals often dictate how they’re willing to spend their time and money, which coupled with a real-time inability for this country to get supplies, is having a major impact.

One example? Thousands of brand-new pickup trucks have been sitting idle in Indiana for months, unable to be sold, because of a shortage in microchips.

Chip production gets shut down in Malaysia for two weeks because of COVID or Vietnam shuts a port or China shuts a port and in an integrated global supply chain, that can slow things down," Shambaugh said.

In the immediate future, one thing economists will be watching is to see if the millions of Americans whose extra unemployment benefits just expired, will now be headed back to work.

If so, it could bring good news for the unemployment rate.

Still — some caution there are other factors at play

I think one of the biggest barriers is lack of childcare and another barrier is fear for health and their family's heath," said Marty Walsh, the U.S. Labor Secretary. during a Labor Day interview on CNN.

There is a bit of good news though.

Wages ticked up last month as did rates of vaccination — two factors economists say could play a direct role in how much people are willing to put back into the economy.