Relentless pandemic casts shadow over global economy

More than two years into the COVID-19 pandemic, uncertainty over how the health crisis will evolve continues to hinder businesses across the U.S. 

"As long as we're not sure how many people are going to be working from offices, then it's difficult for owners of restaurants that cater to people in offices to know how many people they should hire, or how big an order they ought to place," Peter Goodman, global economics correspondent for the New York Times, told CBS News. "So there are all sorts of uncertainties within the economy."

For example, early in the pandemic, people hunkered down and swapped gym memberships for home workouts. But the long-term impact on consumer behavior is hard to predict, posing challenges to businesses.

"People have spent a lot of money on putting exercise equipment in their basement gyms while they've been confined," Goodman said. "How many of those people are going back to gyms? What does that mean if you run a gym?"

A surge in demand for a range of goods while Americans quarantined at home came as supply chains broke down. The system has yet to recover fully.

"We overwhelmed the global supply chain — we're still dealing with the aftershocks of that. That's a big source of the inflation we're dealing with," Goodman said. 

Surging consumer demand, coupled with broken supply chains, is also behind the soaring inflation that's currently slamming Americans and others around the globe. Central banks around the world are moving to raise interest rates in an effort to tame inflation, which slows economic growth. 

When borrowing costs increase, "You're less likely to borrow, you're less likely to spend, you're less likely to hire," Goodman said. "That cools off economic activity and prices come down." 

But deliberately slowing a country's economic growth also reduces work opportunities and shrinks markets where businesses can sell their wares, he added. "You lift rates when you're worried about inflation; you lower rates when you're worried about not enough jobs, not enough growth."

There are additional variables at play, too, that are deepening fears of a recession. The persistence of Russia's war on Ukraine is driving up the cost of energy worldwide. 

"The Fed does not have a lever to pull to get Vladimir Putin out of Ukraine," Goodman said.