The outbreak of the coronavirus has dealt a shock to the global economy with unprecedented speed. Following are developments Wednesday related to the global economy, the work place and the spread of the virus.
NUMBERS TELL A GRIM STORY:
Data just emerging paints a devastating picture of the extent to which the outbreak has seized the economy, as well as the livelihood of Americans.
- Not since the U.S. demobilized after World War II has the country seen such a rapid winding down of its industrial might. The numbers were not unexpected, but still shocking. “We all knew this was coming, but it does not make the heartache any less real for the furloughed workers, the people in related industries or suppliers,” wrote Wells Fargo economists Tim Quinlan and Sarah House.
- The Federal Reserve Bank of New York’s index for state manufacturing plummeted 56.7 points in April, the largest monthly decline in its history dating back to 2001. At 78.2 this month, it is also the lowest it's ever fallen.
- Consumer confidence as measured in a monthly index put out by Refinitiv/Ipsos registered its largest monthly decline ever in April. According to the Refinitiv/Ipsos Primary Consumer Sentiment Index, consumer confidence tumbled 12.3 points to 47.8.
Jobs are vanishing at an astounding rate. More job cuts and furloughs arrive daily.
- Best Buy becomes the latest national chain to announce massive furloughs. The company will begin furloughing about 51,000 of its hourly employees, including nearly all of its part-time hourly employees and a small portion of its full-time hourly employees starting Sunday. Best Buy will begin voluntary, temporary reduced work weeks as well.
The company is also cutting pay for executives and its board.
- Honda will furlough most of its salaried and support workers in the U.S. for two weeks as the automaker deals with falling sales and stay-home orders due to the coronavirus. The company wouldn’t say how many workers will be furloughed. The company has about 31,000 U.S. workers, with over three quarters of them in manufacturing. Many salaried workers are at in the Marysville, Ohio, and Los Angeles areas.
Nations are reacting differently to ebbs in infection levels. There has been a push to slowly ease restrictions on movement in a bid to limit damage to national economies.
- India will begin easing restrictions Monday to revive manufacturing and farming activity in rural areas, and ease the suffering of millions of the poor. India’s Home Ministry issued guidelines Wednesday that will also permit the construction of roads and buildings in those rural areas. The inter-state transport of goods, essential and non-essential, will be allowed.
- Italy is not easing its lockdown on industry — with all non-essential manufacturing on hold until the nationwide containment efforts are lifted, currently set for May 4. The government has put together a task force to study how to safely relaunch industry. At the same time, many people continue to work, creating a de facto easing.
- Builder confidence in the market for new single-family homes has fallen off a cliff, according to an index released Wednesday by The National Association of Home Builders and Wells Fargo. Their monthly housing market index plunged 42 points in April to a reading of 30, the largest single monthly change in the history of the index.
A rescue package for U.S. airlines has been reached, though the large-scale shutdown is has hit millions of people working in industries that rely on robust travel.
- A day after the deal was reached with the U.S. Treasury, airlines were among the few to see stocks surge, but that optimism faded before noon. Shares of Delta and Southwest fell by 2% and 5% respectively. The NYSE index that tracks global airlines has plunged 50%.
- Thailand has extended a ban on international passenger flights until the end of the month.
The U.S. Treasury and IRS launched the “Get My Payment” web application Wednesday. The free app allows taxpayers who do not have direct deposit information on file with the IRS to provide that information in order to get their relief check faster. It also allows taxpayers to check on the status of their payment.
- Amazon threatened Wednesday to suspend all activity in France after a French court found it wasn’t doing enough to protect its workers. The online giant also announced plans to appeal Tuesday’s emergency ruling, which requires Amazon to stop selling non-essential goods for a month while it works out new worker safety measures. Sales of food, medicine and hygiene supplies are still allowed under the ruling.
Twenty-three S&P 500 constituents are scheduled to report quarterly earnings this week. Everyone will be looking closely at companies with operations in China to see how those operations emerged from the outbreak.
- The largest banks and financial players began to roll out quarterly earnings Wednesday. Those institutions anticipate a flood of loan defaults as households and business customers take a big financial hit from the coronavirus pandemic.
- Global stocks and oil prices tumbled Wednesday on grim economic data from the U.S. and after the International Monetary Fund said the global economy will log its worst year since the Great Depression.
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