COVID-19 Monitor

Last Updated:July 3, 2020

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Economic Impact

Cash can’t fix the economy’s problems until the coronavirus is curbed (Axios) Published on: July 2, 2020 | Category: Economic Impact
  • Thursday’s jobs report showed 4.8 million jobs created in June, but those were overwhelmingly people beginning to return to places where they had been temporarily laid off.
  • The number of “permanent job losers” went up, not down, rising 25 per cent in just one month to 2.8 million from 2.2 million.
  • Americans saved 32 per cent of their income in April, and 23 per cent in May — numbers vastly higher than all previous records.
Jack M. Mintz: Alberta is the first to think beyond this crisis. Now let’s see Ottawa’s recovery plan (Financial Post) Published on: July 2, 2020 | Category: Canadian Business, Economic Impact
  • The IMF World Economic Outlook expects our GDP to fall 8.4 per cent in 2020 with a rebound gain of only 4.9 per cent in 2021. By 2022 GDP will still be four points below its end-of-2019 level.
  • Deficits likely will continue for most of this decade — which is why running surpluses during good years, as we should have been doing since about 2011, is such smart policy.
  • The plan is a confidence-booster focused on growth. It has three main parts: stimulate investment, skill training and helping people get back to work; build shovel ready — and shovel-worthy — infrastructure; and diversify the economy.
U.S. added nearly 2.4 million private-sector jobs in June, ADP reports (Washington Post) Published on: July 1, 2020 | Category: Economic Impact
  • According to payroll services firm ADP, the nation’s private employers expanded by more than 2.37 million positions in June. It also revised its May figures to show a net gain of 3.1 million jobs instead of the loss of 2.76 million reported last month.
  • Still, the gains are tenuous — stores, restaurants and other businesses that were allowed to reopen weeks ago are shutting down as coronavirus infections spike, leading to new layoffs.
  • As the economy slowly continues to recover, we are seeing a significant rebound in industries that once experienced the greatest job losses. In fact, 70 per cent of the jobs added this month were in the leisure and hospitality, trade and construction industries.
Revealed: Covid-19 outbreaks at meat-processing plants in US being kept quiet (Guardian) Published on: July 1, 2020 | Category: Economic Impact, Global Response
  • A chicken processing facility in western North Carolina reportedly underwent widespread testing for Covid-19 in early June.
  • Workers at the plant were scared. Several employees had already tested positive and the company, Case Farms – which has been repeatedly condemned for animal treatment and workers’ rights violations – was not providing proper protective equipment.
  • The testing turned up 150 positive cases at the facility, the worker said.
  • Yet neither the company, county officials nor the North Carolina department of health and human services would confirm whether those cases were connected to Case Farms.
Canada’s economy saw record 11.6% drop in April, but signs of rebound emerging (The Globe and Mail) Published on: June 30, 2020 | Category: Canadian Business, Economic Impact
  • Canada’s real GDP is likely to grow 3 per cent in May, bouncing back from a record decline in April, Statistics Canada said in a flash estimate on Tuesday, as businesses across the country began to reopen following coronavirus-linked shutdowns.
  • The goods-producing sector posted a 17.0 per cent decrease, led by sharp declines in manufacturing and construction, with the service sector down 9.7 per cent on sharp plunges in the hospitality, retail and transportation sectors, the StatsCan data showed.
  • “April was a ‘mense horribilis’ for the Canadian economy, and the only thing good about it was that in all likelihood it marked the bottom of this short but extremely deep recession,” Avery Shenfeld, chief economist at CIBC Capital Markets, said in a note.
Companies Hit by Covid-19 Want Insurance Payouts. Insurers Say No. (WSJ) Published on: June 30, 2020 | Category: Economic Impact, Global Response
  • A cavalcade of restaurateurs, retailers and others hurt by pandemic shutdowns have sued to force their insurers to cover billions in business losses.
  • But insurance companies have largely refused to pay claims under this coverage, citing a standard requirement for physical damage.
  • More than half of property policies in force today specifically exclude viruses. The firms filing the lawsuits mostly hold policies without that exclusion.
Choosing the right path to unlock the economy (McKinsey) Published on: June 30, 2020 | Category: Economic Impact, Global Response
  • How should governments approach the different possible paths to reopening their economies? And what is needed to spur businesses and consumers to start spending again?
  • Flattening the infection curve as fast as possible and ensuring hospital capacity, treatment and testing were the imperatives to safeguard our lives.
  • The expansion of treatment capacity has been impressive; we can think back to when Wuhan managed to build a hospital in two weeks, and no one in Europe or the US believed it would be possible there—but it was.
Millennials stand out as being more cautious about their personal finances during COVID-19 (Equifax) Published on: June 29, 2020 | Category: Canadian Business, Economic Impact
  • Equifax data analytics confirms that, with reduced opportunity for discretionary spending, younger adults have seen a higher rate of decline in credit card balances since January at 16 per cent as compared to under 12.6 per cent for those adults 35 and older.
  • After examining the consumer confidence data and survey research, Kelly Peters, CEO & Co-Founder of BEworks, suggests that younger adults in particular are less susceptible to the scarcity mindset driving other consumers.
  • By proactively leveraging behavioural insights, financial Institutions can take advantage of the unique times we are living in and help consumers make a fresh start in the post-pandemic world.
  • Looking across all age groups, understandably survey respondents are most concerned for their own financial situation, but there’s also a good measure of concern for their friends, country and family dealing with the pandemic that has gripped the world.
Officials warn coronavirus pandemic could worsen as global death toll hits 500,000 (Global News) Published on: June 28, 2020 | Category: Economic Impact, Global Response
  • The world surpassed two sobering coronavirus milestones Sunday — 500,000 confirmed deaths, 10 million confirmed cases — and hit another high mark for daily new infections as governments that attempted reopenings continued to backtrack and warn that worse news could be yet to come.
  • California Gov. Gavin Newsom rolled back reopenings of bars in seven counties, including Los Angeles.
  • South Africa’s health minister warned that the country’s current surge of cases is expected to rapidly increase in the coming weeks and push hospitals to the limit.
  • Health Minister Zwelini Mkhize said the current rise in infections has come from people who “moved back into the workplace.
Why the American Consumer Has Fewer Choices—Maybe for Good (WSJ) Published on: June 27, 2020 | Category: Economic Impact
  • Some IGA Inc. grocery stores now offer only four choices of toilet paper. A few months ago, before the coronavirus pandemic, IGA’s 1,100 U.S. stores typically carried about 40 varieties.
  • Consumer-oriented companies spent the past decades trying to please just about everyone. The pandemic made that impossible, and now some no longer plan to try.
  • In grocery stores, the average number of different items sold was down 7.3 per cent over the four weeks ended June 13, said Morgan Seybert, a director of analytics at market-research firm Nielsen. The variety in some categories, such as baby care, bakery and meat, fell as much as 30 per cent earlier in the pandemic.
Governments eye new taxes on cigarettes, homes and tech giants to pay for big budget shortfalls related to the coronavirus (Washington Post) Published on: June 26, 2020 | Category: Economic Impact, Global Response
  • Cash-starved cities and states across the country are starting to weigh whether to raise taxes on homes, cigarettes, local businesses and global tech giants, hoping to rake in new revenue that might help them close the massive budget shortfalls created by the coronavirus pandemic.
  • Philadelphia increased fees on parking and raised wage taxes on workers who reside outside the city. Chicago Mayor Lori Lightfoot (D) said this month she could not rule out a property tax increase to cover her city’s $700 million budget shortfall.
  • Unlike the federal government, which can cut taxes and rack up huge deficits with impunity, localities generally must balance their budgets each year.
A Pandemic Problem for Older Workers: Will They Have to Retire Sooner? (NY Times) Published on: June 26, 2020 | Category: Economic Impact
  • It’s still early, but experts believe the pandemic will upend the timing of retirement plans of many older workers.
  • In some cases, their decisions will be voluntary; in other cases, retirement may be forced upon them by job elimination or unavoidable health risk.
  • “It could be that what we’re seeing is a continuation of a long-term trend in which seniority-based advantages have been gradually eroding because of the decline in unions, and the shrinking bargaining power of older workers,” Mr. Johnson said. “But health risks related to the virus are also probably a very important factor.”
Zoning adjustments could help cities rebound from coronavirus (Axios) Published on: June 25, 2020 | Category: Economic Impact, Global Response
  • Cities should ease rigid permitting and zoning rules to help businesses and residents recover during the coronavirus pandemic, according to a trio of policy briefs out today by researchers at the Mercatus Center at George Mason University.
  • Restrictions on the amount and type of housing allowed to be built are contributing to the public health crisis by causing overcrowding in some places and unsustainable rents in others.
  • “Regulatory wiggle room” can go a long way to letting businesses and restaurants open in new locations or allowing residential development in commercial zones, the researchers argue.
With Unemployment Offices Busy, Recovery Seems a ‘Long Haul’ (NY Times) Published on: June 25, 2020 | Category: Economic Impact
  • As American businesses reopen in fits and starts — and anxiety over new coronavirus hot spots increases — state unemployment offices still have their hands full.
  • The total number of people collecting state unemployment insurance for the week ending June 13 was 19.5 million, seasonally adjusted, a decrease of 767,000 from the previous week and down from nearly 25 million in early May.
  • In a separate report Thursday, the Commerce Department reported that durable goods orders rose 15.8 percent in May, well above the 10.5 percent increase that economists had been expecting.
A global view of financial life during COVID-19 (McKinsey) Published on: June 25, 2020 | Category: Economic Impact
  • As of May, across the globe, decision-makers’ perceptions of the health of their national economies were negative and had grown slightly worse since April.
  • In most countries, between 20 per cent and 60 per cent of decision-makers say they fear for their jobs, with roughly half of these holding four or fewer months of savings.
  • In May, respondents across all countries reported decreased income and savings on a net basis.
Coronavirus Surge Alarms States, Markets and Businesses; Slow Recovery Feared (NY Times) Published on: June 24, 2020 | Category: Economic Impact, Global Response
  • On Wednesday, governors, mayors, investors and others across the United States woke up to news that was impossible to ignore.
  • More than 35,000 new coronavirus cases had been identified the day before. It was the highest number of cases reported in a single day since late April.
  • It was as if the country had found itself back in March — at the start of the pandemic, in the early days of the lockdown, when masks were in short supply and the death toll was skyrocketing.
  • In Washington State, where cases are rising again, Gov. Jay Inslee said residents would have to start wearing masks in public.
Data Shows Significant Drop in IT Services Spending Post COVID-19 (NextGov) Published on: June 24, 2020 | Category: Economic Impact, Global Response
  • Federal and central governments across the globe have shifted spending priorities to combat the COVID-19 pandemic, with notable declines in IT spending worldwide, according to a new report.
  • The U.S. has not been immune to this shift, with a major drop in spending on IT services canceling out continued investments in hardware and software, according to IDC’s “COVID-19: Global and U.S. Federal Spending—Where the Money Is Going,” published Tuesday.
  • The report notes the COVID-19 pandemic has forced changes for every sector but argues “the health crisis is affecting government IT spending differently than other industries.”
  • Even though trillions of extra dollars are being disbursed, most is going into grants, health and expense relief, not [new] IT systems.
Fitch Downgrades Canada’s Ratings to ‘AA+’; Outlook Stable (Fitch Ratings) Published on: June 24, 2020 | Category: Canadian Business, Economic Impact
  • The rating downgrade reflects the deterioration of Canada’s public finances in 2020 resulting from the coronavirus pandemic.
  • Fitch expects the coronavirus response to raise Canada’s consolidated gross general government debt to 115.1% of GDP in 2020, up from 88.3% of GDP in 2019.
  • Canada has a track record of fiscal adjustment during the 1990s. However, the structure of Canada’s decentralized fiscal framework increases the complexity of any fiscal adjustment.
IMF Downgrades Already-Glum Economic Outlook Due to Coronavirus Crisis (WSJ) Published on: June 24, 2020 | Category: Economic Impact
  • The IMF said on Wednesday the global economy will shrink 4.9% this year, compared with its April estimate of 3%.
  • The IMF said global employment loss in the second quarter of 2020 could be equivalent to losing 300 million full-time jobs.
  • Though the current decline appears significantly worse than anything since the Great Depression, it isn’t nearly as bad as that downturn, which began in 1929. During that episode, the global economy shrunk by 10% over three years—compared with this year’s 4.9% forecast.
  • Advanced economies contracted by around 16% then compared with the 8% expected for this year.
Over 700 cash-strapped cities halt plans to repair roads, water systems or make other key investments (Washington Post) Published on: June 23, 2020 | Category: Economic Impact
  • The decision to suspend or terminate some of these long-planned purchases, upgrades and repairs threatens to worsen municipal services and harm local businesses, according to the National League of Cities, which deduced from a new survey released Tuesday that more federal aid is necessary to ensure that local financial woes do not imperil the country’s economic recovery.
  • Cities had already predicted they would need about $500 billion from Washington to help cover the massive, unanticipated declines in tax revenue and other costs incurred from the pandemic, which has shuttered businesses and left millions of Americans out of work.
  • But federal lawmakers have been unwilling to authorize such a cash infusion, forcing many cities to take drastic steps to balance their budgets for fiscal 2021, which for many governments begins on July 1.
A Multibillion-Dollar Opportunity: Virus-Proofing the New Office (NY Times) Published on: June 22, 2020 | Category: Economic Impact, Global Response
  • Truework, an income verification start-up, recently introduced software to help employers keep track of their workers’ health status.
  • Gensler, an architecture and design firm, has a workplace floor-planning app that generates social-distancing layouts for desks and other office furniture.
  • In the United States, the market for contact-tracing technologies for employers could soon be worth $4 billion annually, according to estimates from International Data Corporation, a market research firm.
Housing demand to drop as COVID-19 hit on economy deepens: CMHC (BNN Bloomberg) Published on: June 22, 2020 | Category: Canadian Business, Economic Impact
  • Canada Mortgage and Housing Corp. expects a drop in home prices in the country’s biggest cities amid “severe declines” in home sales and construction.
  • CMHC says the market likely won’t see a return to pre-pandemic levels before the end of 2022.
  • He noted that a decline in immigration and interprovincial activity will lower demand for rental units, which combined with a “significant new supply in rental properties close to being completed,” could mean that vacancy rates are likely to jump.
Global Economy Shows Signs of Pulling Out of Its Slump (WSJ) Published on: June 22, 2020 | Category: Economic Impact
  • The global economy is gradually pulling out of its stall as businesses reopen after pandemic-induced lockdowns, with output contracting at a slower pace in the U.S., Europe and Asia this month, according to surveys of purchasing managers.
  • The data could be a sign that the sharp drop in economic activity that started in March, when coronavirus cases began to rise, could be bottoming out.
  • The slower decline, albeit tentative, is most visible in countries that issued stringent stay-at-home rules during the coronavirus pandemic, where economic activity fell sharply in March, April and May.
What insurers can learn from China’s continuing COVID-19 recovery (McKinsey) Published on: June 22, 2020 | Category: Economic Impact
  • While the broad economic view in China may be encouraging, the outlook for the insurance industry is complex—some lines fared well, while others suffered significant declines and are just now recovering.
  • For example, awareness of health insurance increased, translating to a 17 per cent growth in sales from first quarter 2019 to first quarter 2020, while life (or mortality) products were down 1 per cent over the same period.
  • Two-thirds of agents experienced a decline in business performance during the COVID-19 pandemic, while around 20 per cent of agents reported an improvement.
Coronavirus Cash Needs Prompt Companies to Rethink Investments (WSJ) Published on: June 22, 2020 | Category: Economic Impact
  • Large companies have swiftly sold big positions in other firms after the coronavirus pandemic sparked a scramble for cash and caused them to rewrite their investing playbooks.
  • So far this year, more than $28 billion of U.S.-traded stock has been sold spanning eight secondary transactions of at least $1 billion, according to Dealogic, the most by this point in any year on record.
  • For many firms, the sales stem from a reckoning sparked by the coronavirus pandemic as boards focus on whether the most efficient use of capital is a minority stake in another company.
You don’t know your customer anymore (Fast Company) Published on: June 22, 2020 | Category: Economic Impact
  • A recent study by Capgemini found that while 70 per cent of consumers feel optimistic about recovery from the current outbreak over the next 12 months, nearly as many (65 per cent) say they will be more mindful of their purchase habits once the pandemic is over.
  • Fifty-nine percent of consumers worldwide said they had high levels of interaction with physical stores before the current crisis, but today, less than a quarter (24 per cent) see themselves in that high-interaction category.
  • In the next six to nine months, 39 per cent of consumers expect a high level of interaction with physical stores–clearly below the pre-pandemic levels.
Coronavirus and personal debt: the Americans living on a ‘knife edge’ (FT) Published on: June 22, 2020 | Category: Economic Impact
  • Although US consumers’ debt levels are lower than in 2008, a swift end to payment holidays would leave millions vulnerable.
  • This is what happens when at least 20m jobs disappear overnight in a country where total household debt had already reached $14.3tn, according to the US Federal Reserve, before the crisis hit.
  • Payment holidays from lenders and unprecedented government support have kept debt delinquency from spiking. While between 5 and 10 per cent of borrowers have accepted payment forbearance, many are still making payments.
Women’s Job Losses From Pandemic Aren’t Good for Economic Recovery (WSJ) Published on: June 21, 2020 | Category: Economic Impact, Global Response
  • Women have lost jobs at a steeper rate than men during the coronavirus pandemic, a factor that is likely to hold back the economic recovery.
  • Married women, who in past recessions took jobs to offset lost wages when their husband or male partner was laid off, also are less likely to seek work because their employment prospects are now limited, one researcher concluded.
  • The fragility of female-dominated jobs is different from past recessions, when goods-producing sectors such as construction and manufacturing—which are predominantly men—saw greater employment losses.
Will public debt be a problem when the Covid-19 crisis is over? (FT) Published on: June 21, 2020 | Category: Economic Impact
  • Even more notable has been the unanimity among macroeconomists that massive fiscal and monetary stimulus is the appropriate response to a “wartime” economic emergency. Almost no one seriously disputes that policy should be doing “whatever it takes” to overcome the shock from the virus.
  • But once the recovery is established, the public debt overhang is likely to divide economists along familiar lines.
  • John Cochrane and Kenneth Rogoff are among the influential economists who warn that most advanced economies, notably the US, could soon be running on balance-sheet public debt ratios higher than anything seen before, even following the 2008 crisis. Off-balance sheet commitments in social security and health increase potential government spending even further.
Apple to close some stores in states where virus cases are rising (FT) Published on: June 19, 2020 | Category: Economic Impact
  • Apple says it will again close almost a dozen stores in the US because of a recent rise in coronavirus infections in the south and west, reversing its recent move to begin reopening stores as states start to ease lockdowns.
  • “Due to current Covid-19 conditions in some of the communities we serve, we are temporarily closing stores in these areas,” Apple said. “We take this step with an abundance of caution as we closely monitor the situation and we look forward to having our teams and customers back as soon as possible.”
Fed’s Rosengren Says U.S. Economy Will Need More Monetary, Fiscal Support (WSJ) Published on: June 19, 2020 | Category: Economic Impact
  • Federal Reserve Bank of Boston President Eric Rosengren said the U.S. central bank and broader government will need to do more to help the economy emerge from the ongoing impact of the coronavirus pandemic.
  • In response to a question after the speech, Mr. Rosengren said, “It’s incredibly important that we support both individuals and businesses that have been affected by this disruption.”
  • Mr. Rosengren pushed back in his speech at mounting optimism, driven by recent data, that the economy may be rebounding faster than was expected.
Canadian Retail Sales See ‘Massive’ Drop In April, Surprising The Experts (Huffington Post) Published on: June 19, 2020 | Category: Canadian Business, Economic Impact
  • Canadian retail sales plunged for the second month in a row in April, falling 26.4 per cent during the period when the COVID-19 lockdowns were at their peak, according to data from Statistics Canada.
  • The decline is nearly twice as large as the one seen in the U.S. in April, where sales fell 14.7 per cent. It’s also twice as large as what economists had been expecting for Canada.
  • It wasn’t all bad news in the report though. Retailers who had an online presence were able to capitalize on some of the shifts in buying patterns.
Canadian exports set to plunge in 2020, with rebound in store next year (The Globe and Mail) Published on: June 18, 2020 | Category: Canadian Business, Economic Impact
  • The worst industry that anybody would have expected would have had the numbers that we’re now posting for the best industries.
  • The industries hit hardest by the pandemic include aerospace, oil, autos and travel services, while the ones weathering the storm the best include agriculture, consumer goods, ores and metals, and chemicals and plastics, according to the report.
  • Consumer goods, according to EDC’s forecasts, will see a 9 per cent decline in exports in 2020, followed by a 10 per cent increase next year.
  • Mary Robinson, president of the Canadian Federation of Agriculture, says agriculture may fare better than some of its counterparts in exports because the industry is responsible for feeding Canadians and consumers globally.
A Tidal Wave of Bankruptcies Is Coming (NY Times) Published on: June 18, 2020 | Category: Economic Impact
  • Already, companies large and small are succumbing to the effects of the coronavirus. They include household names like Hertz and J. Crew and comparatively anonymous energy companies like Diamond Offshore Drilling and Whiting Petroleum.
  • Many are teetering on the edge. Chesapeake Energy, once the second-largest natural gas company in the country, is wrestling with about $9 billion in debt.
  • More than 6,800 companies filed for Chapter 11 bankruptcy protection last year, and this year will almost certainly have more.
Despite reopening orders, real-time economic data shows Canada’s economy remains largely frozen (The Logic) Published on: June 18, 2020 | Category: Canadian Business, Economic Impact
  • Nationwide restaurant reservations are down 75 per cent from the same time last year, but up from the 100 per cent drop in March.
  • That increase is driven largely by Edmonton, which leads not only the average in Canada, but most of the world when it comes to restaurant reservations, down only 42 per cent from last year.
  • Nationwide walking searches are up 22 per cent, according to Apple, which aggregates changes in search volume for directions on its Maps app.
  • Searches for transit maps are down 56 per cent, but driving searches are up 24 per cent.
Why the US pandemic response risks widening the economic divide (FT) Published on: June 18, 2020 | Category: Economic Impact
  • In terms of raw numbers, the US economic response to coronavirus has been overwhelming. As well as the $3tn in fiscal stimulus that has been introduced so far, there has also been a massive injection of liquidity into the financial system by the Fed. Steven Mnuchin, the US treasury secretary, has hailed the rescue effort for saving millions of jobs.
  • Many of the measures aimed at ordinary people are set to fade or expire soon and, given opposition from many Republican lawmakers, it is not at all clear that they will be extended.
  • In the US after the financial crisis, it was the wealthy who saw their incomes and wealth come back fairly quickly, in the first couple of years, while the rest of America had to wait, and for many, in fact, wealth never recovered.
The pandemic has shown that Amazon is essential—but vulnerable (The Economist) Published on: June 18, 2020 | Category: Economic Impact, Leadership
  • Jeff Bezos’s vision of a world shopping online is coming true faster than ever. But the job of running Amazon hasn’t got any easier.
  • The digital surge began with online “pantry-loading” as consumers bulk-ordered toilet rolls and pasta. Amazon’s first-quarter sales rose by 26% year on year.
  • Amazon has hired 175,000 staff, equipped its people with 34m gloves, and leased 12 new cargo aircraft, bringing its fleet to 82.
  • Last year Amazon had a 40% share of American e-commerce and 6% of all retail sales. There is little evidence that it kills jobs.
Walmart surpasses eBay in U.S. e-commerce for the first time, Amazon still tops: eMarketer (Market Watch) Published on: June 16, 2020 | Category: Economic Impact
  • Walmart Inc. has surpassed eBay Inc. in share of U.S. e-commerce sales for the first time, according to May 2020 data provided by eMarketer, though Amazon.com Inc. remains number one by a large margin.
  • Both outcomes are the result of the coronavirus, which forced stores to close and consumers to social distance, shifting shopping activity to necessities and other categories in line with spending more time at home.
  • “Compared to pre-pandemic sales for the period, online transactions were $52 billion higher than expected for the period, with e-commerce levels tracking higher than shopping holiday levels on Black Friday and Cyber Monday,” according to the Adobe report.
U.S. bank profits plunge 70% on coronavirus loss provisioning (Reuters) Published on: June 16, 2020 | Category: Economic Impact
  • U.S. bank profits fell by 69.6% to $18.5 billion in the first quarter of 2020 from the year prior as banks felt the economic impact of the novel coronavirus pandemic, according to data from a banking regulator.
  • The new report, the first government survey of the industry since the pandemic shut down large parts of the economy, shows banks set aside $38.8 billion to cover potential loan losses in the future, up nearly 280% from the year prior.
  • The amount of loans banks charged off as delinquent was up nearly 15%, driven by an 87% increase in charge-offs for commercial and industrial loans.
The great balancing act: Managing the coming $30 trillion deficit while restoring economic growth (McKinsey) Published on: June 16, 2020 | Category: Economic Impact
  • The dual imperative of our time is to save lives and safeguard livelihoods—and governments around the world are pulling out all the stops to do so.
  • As a result, government deficits worldwide could reach $9 trillion to $11 trillion in 2020, and a cumulative total of as much as $30 trillion by 2023.
  • There is already concern that many countries will struggle to meet their commitments to creditors, sparking a debt crisis that would compound the economic crisis unleashed by COVID-19.
Risk sentiment rides the waves with some central bank help (FT) Published on: June 15, 2020 | Category: Economic Impact, Global Response
  • Global investor sentiment was challenged by signs of another Covid-19 wave on Monday, before Wall Street was bolstered by an announcement on corporate bond purchases from the US Federal Reserve.
  • The catalyst for the rebound was the Fed announcing that it would purchase corporate bonds to create a portfolio that reflects “a broad, diversified market index of US corporate bonds”.
  • The latest demonstration of seemingly unlimited central bank support drowned out the worrying news over the weekend that Beijing had experienced a jump in coronavirus infections.
At A Time Of Great Need, Public Health Lacks ‘Lobbying Muscle’ (Kaiser Health News) Published on: June 15, 2020 | Category: Economic Impact, Global Response
  • “We don’t have millions of dollars to spend on billboards, and we can’t call in a hundred people to stand up at a hearing and say ‘I didn’t get sick because of public health measures” said Kat DeBurgh, executive director of the Health Officers Association of California.
  • Health officials say the additional $150 million they’re requesting would help them hire public health nurses and disease investigators, fund public health labs and purchase protective gear.
  • County health directors say chronic underfunding has forced them to make difficult decisions to curtail spending and cut programs like public health labs — 11 of 40 have shuttered in the past two decades.
Governments May Revisit Postwar Playbook as They Tackle Huge Debts (WSJ) Published on: June 14, 2020 | Category: Economic Impact
  • In the U.S. and elsewhere, government debt is set to soar this year, reflecting lower tax revenue and the cost of financial aid to businesses and households during lockdowns.
  • The International Monetary Fund forecasts that U.S. government debt will reach 131% of annual economic output this year, up from 109% in 2019.
  • Some people thinking about how to pay down the debt are looking at an approach used after World War II: financial repression, or policies that ensure that interest rates remain low.
Florida fired its coronavirus data scientist. Now she’s publishing the statistics on her own. (Washington Post) Published on: June 13, 2020 | Category: Economic Impact, Leadership
  • Tension built for days between Florida Department of Health supervisors and the department’s geographic information systems manager before officials showed her the door, she says, permanently pulling her off the coronavirus dashboard that she operated for weeks.
  • Managers had wanted Rebekah Jones to make certain changes to the public-facing portal, she says. Jones had objected to — and sometimes refused to comply with — what she saw as unethical requests.
  • White House coronavirus response coordinator Deborah Birx praised Florida’s official coronavirus dashboard in April as a beacon of transparency.
  • But Jones has asserted that the site undercounts the state’s infection total and overcounts the number of people tested — with the official numbers bolstering the decision to start loosening restrictions on the economy in early May, when the state had not met federal guidelines for reopening.
One country, two pandemics: what COVID-19 reveals about inequality in Canada (CBC) Published on: June 13, 2020 | Category: Canadian Business, Economic Impact
  • A new analysis conducted by CBC News of cases in Montreal, for instance, found strong correlations linking higher rates of COVID-19 infections with low-income neighbourhoods and neighbourhoods with higher percentages of Black residents.
  • Public health officials in Ontario reported last week that the rates of infection and death from COVID-19 were disproportionately higher in the province’s most ethnically and culturally diverse neighbourhoods.
  • The rate of hospitalizations in those hard-hit communities was four times higher. The rate of death was twice as high.
  • In a working paper published this week, four Canadian economists reported that the employment losses in April were greater for younger, low-wage and non-unionized workers, with “public facing” sectors like retail and restaurants hit the hardest.
Trudeau’s call with premiers gets testy as leaders butt heads over funding to reopen economy (CBC) Published on: June 12, 2020 | Category: Canadian Business, Economic Impact
  • Thursday evening’s weekly call between Prime Minister Justin Trudeau and the premiers was marked by testy exchanges over the federal government’s pledge of $14 billion to help provinces reopen their economies and the future of the military in Quebec’s long-term care facilities, according to federal and provincial sources with knowledge of the call.
  • When Trudeau announced the $14 billion on June 5, he said it would be earmarked for specific measures to help provinces reopen their economies safely.
  • Those measures include the purchase of personal protective equipment (PPE) for frontline healthcare workers and businesses.
Businesses Want Virus Legal Protection. Workers Are Worried. (NY Times) Published on: June 12, 2020 | Category: Economic Impact, Global Response
  • The stock exchange required Mr. Corpina and others who work there to acknowledge that returning to work could expose them to the coronavirus, and to promise not to sue if they were infected.
  • Whether companies are liable if their workers and customers catch the coronavirus has become a key question as businesses seek to reopen around the country.
  • Companies and universities — and the groups that represent them — say they are vulnerable to a wave of lawsuits if they reopen while the coronavirus continues to circulate widely, and they are pushing Congress for temporary legal protections they say will help get the economy running again.
KKR asks advisers to ‘share the pain’ amid $18bn spending spree (FT) Published on: June 12, 2020 | Category: Economic Impact
  • KKR has asked its financial and legal advisers to “share in the economic pain” by providing discounts on work done this year, even as it has emerged as the most aggressive private equity investor during the economic downturn.
  • The US group with $207bn assets under management has requested discounts of at least 15 per cent from advisory firms that it refers to as “long-term partners,” said several people who received the requests.
  • KKR’s roster of advisers — accountants, law firms, intelligence companies and consultants — includes some of the largest corporate firms, such as EY and Simpson Thacher & Bartlett, which are among several approached, said people familiar with the matter.
One metre or two? Economic pressure stokes distancing debate (FT) Published on: June 11, 2020 | Category: Economic Impact, Global Response
  • Intense economic pressure to lift coronavirus lockdowns around the world has stoked debate over the minimum physical distancing needed to limit the spread of infection.
  • Evidence so far suggests that the World Health Organization guideline of one metre is a bare minimum, and that the transmission risk falls further as that gap widens to two metres and beyond.
  • Fernando Simón, the epidemiologist leading Spain’s virus fight, said this week that two metres was still ideal, even though his country would cut its requirement to 1.5 metres from June 21.
WSJ Survey: U.S. Recovery From Pandemic Shock to Begin by Third Quarter (WSJ) Published on: June 11, 2020 | Category: Economic Impact
  • The U.S. economy will be in recovery by the third quarter of this year, economists said in a survey that also concluded the labor market will fare better than previously expected following the effects of the coronavirus pandemic.
  • A monthly Wall Street Journal survey found that more than two-thirds of economists, 68.4%, expect the economic recovery to start in the third quarter.
  • Business and academic economists polled in the survey expect gross domestic product to shrink 5.9% this year, measured from the fourth quarter of 2019, a slight improvement from the 6.6% contraction economists predicted in last month’s survey.
Treasury Secretary Mnuchin says ‘we can’t shut down the economy again’ (CNBC) Published on: June 11, 2020 | Category: Economic Impact, Global Response
  • Treasury Secretary Steven Mnuchin told CNBC that shutting down the economy for a second time to slow Covid-19 isn’t a viable option.
  • The Treasury secretary’s comments came as Wall Street grew more concerned about a second wave of coronavirus cases in the U.S.
  • “And not just economic damage, but there are other areas and we’ve talked about this: medical problems and everything else that get put on hold,” he added.
Fed predicts no rate increases until at least the end of 2022 (FT) Published on: June 10, 2020 | Category: Economic Impact, Global Response
  • Federal Reserve officials predicted they would keep interest rates close to zero until at least the end of 2022, as the US central bank indicated it would take years to bring joblessness back down to the levels before the coronavirus pandemic.
  • The dovish tone from the Fed, which is expecting the US economy to contract by 6.5 per cent this year, with unemployment falling to 9.3 per cent, reinforced expectations that the central bank was settling in for an extended fight against the economic shock triggered by the virus.
  • Mr Powell pushed back against concerns the Fed had artificially propped up markets in a way that could be a source of financial trouble ahead.
Coronavirus Continues to Weigh on U.S. Consumer Prices (WSJ) Published on: June 10, 2020 | Category: Economic Impact
  • U.S. consumer prices dropped for a third straight month in May as the coronavirus pandemic kept shoppers and travelers at home, but the rate of decline in inflation eased as the cost of groceries, rent and medical services rose.
  • The consumer-price index, which measures what Americans pay for everything from alcohol to lawn mowers, fell a seasonally adjusted 0.1% in May after comparable declines of 0.8% in April and 0.4% in March, the Labor Department said Wednesday.
  • The cost of food bought for home consumption climbed 1% in May following April’s increase of 2.6%, which was the largest month-over-month jump in grocery prices since 1974.
The Results Of The Zagat Future Of Dining Study (Zagat) Published on: June 10, 2020 | Category: Economic Impact
  • 3 in 4 diners cite health and safety concerns as the biggest deterrent to dining out again, far outweighing financial reasons.
  • 83% of those not immediately comfortable with returning to restaurants will be made more comfortable with social distancing measures and masks worn by staff.
  • As restaurants continue to struggle, some have been offering meal kits, groceries, and alcohol to local consumers. The majority (76%) of respondents surveyed are aware of restaurants in their area selling these items.
  • Of those with access to these restaurants, 38% have made a purchase—and if available, 59% will continue to purchase after the crisis.
Rental advocates push back on potential eviction plans from province (News1130) Published on: June 9, 2020 | Category: Canadian Business, Economic Impact
  • In the wake of a push by B.C. landlords to get their eviction privileges restored, a tenants’ rights group is pushing back.
  • While landlords can’t evict tenants for not paying their rent right now, that debt isn’t going away, and Gharibnavaz says there needs to be a long-term solution.
  • “Maybe some sort of rent bank or something like that, where the renter is going to take on the burden,” he suggests.
Pandemic measures expose work-from-home inequality says StatsCan (CBC) Published on: June 8, 2020 | Category: Canadian Business, Economic Impact
  • Statistics Canada says that women, people with higher earnings and those with more education are more likely to be able to work from home and therefore less likely to suffer a loss of income due to measures to limit spread of COVID-19.
  • About 50 per cent of single women have jobs that allow them to work from home, compared with about one-third of single men, the report found, while 62 per cent of women in dual-income families hold jobs that can be done from home, compared with 38 per cent for men.
  • Statistics Canada also finds that while less than 30 per cent of primary earners with a high school diploma can work from home, roughly two-thirds of their counterparts with at least a bachelor’s degree could do so.
World Bank says coronavirus to shrink 2020 global output by 5.2% (Reuters) Published on: June 8, 2020 | Category: Economic Impact
  • The coronavirus will cause global economic output to contract by 5.2% in 2020, the World Bank said on Monday, warning that its latest forecasts would be revised downward if uncertainty over the pandemic and business lockdowns persist.
  • In its latest Global Economic Prospects report, the World Bank said that advanced economies are expected to shrink 7.0% in 2020, while emerging market economies will contract 2.5%, their first since aggregate data became available in 1960.
  • The updated forecasts show more damage to the economy than estimates released in April by the International Monetary Fund, which predicted a 3.0% global contraction in 2020.
Energy Firm BP to Cut 10,000 Jobs Worldwide Amid Coronavirus Pandemic (TIME) Published on: June 8, 2020 | Category: Economic Impact, Global Response
  • Energy company BP said Monday that its global workforce will be trimmed by 10,000 jobs as the COVID-19 pandemic slams the oil and gas industry.
  • The changes are expected to significantly impact senior levels, cutting the number of group leaders by a third. The company said it will make the senior structure flatter.
The careful economy (McKinsey) Published on: June 8, 2020 | Category: Economic Impact, Leadership
  • How financial stability, security, and safety are being redefined for an uncertain future.
  • Discretionary spending has fallen, the result of mass unemployment, wage decreases, the realities of living under shelter-in-place orders, and general uncertainty about the future.
  • Looking ahead, consumers globally have a pessimistic or unsure view of their country’s economic outlook.
  • China is a notable exception: half of consumers there expect the economy to rebound in the next few months as the country emerges from lockdown.
Shipping industry warns of trade logjam as crews remain stranded (FT) Published on: June 7, 2020 | Category: Economic Impact, Global Response
  • The international shipping industry has warned of a threat to global trade from a mounting crisis on board merchant vessels, with up to 400,000 crew stranded either at sea or at home by travel restrictions because of the Covid-19 pandemic.
  • Many crew have worked several months beyond their contracts, exceeding regulatory limits, and ship owners, unions and captains have sounded the alarm over safety.
  • Many seafarers are also struggling to obtain entry or exit visas, while the suspension of commercial flights increase the difficulties in moving crew around.
‘I don’t know if that counts as a job’: Fewer hours, less pay and more anxiety greet returning workers (Washington Post) Published on: June 6, 2020 | Category: Economic Impact
  • As millions of Americans return to work amid the worst economic crisis in a generation, they’re unexpectedly discovering their old positions are far more burdensome than they used to be.
  • And their job security — despite President Trump’s recent proclamations about an economy on the mend — remains anything but guaranteed.
  • At the same time, though, Bunker said there was a higher-than-expected spike in part-time employment, one of a few indicators that “suggests there has not been a full return to work” for some people.
Will the end of lockdown prompt the sale of the century? (FT) Published on: June 6, 2020 | Category: Economic Impact
  • Shoppers in Florida’s Tampa Bay area this week had plenty of bargains to choose from as retailers seemingly tried to outdo each other with promotions.
  • Airlines, hotels and restaurants are also offering special deals to woo consumers — millions of whom remain reluctant to leave their homes, never mind embark on a spending splurge during a global recession.
  • “Consumers are not buying, and therefore businesses have no pricing power,” said Mark Zandi, chief economist at Moody’s Analytics.
The unluckiest generation in U.S. history (Washington Post) Published on: June 5, 2020 | Category: Economic Impact
  • After accounting for the present crisis, the average millennial has experienced slower economic growth since entering the workforce than any other generation in U.S. history.
  • Millennials will bear these economic scars the rest of their lives, in the form of lower earnings, lower wealth and delayed milestones, such as homeownership.
  • Things improved in May, but the improvement just means we’re back to December 2000 levels of employment.
  • For millennials who came of age then, it’s as if all the plodding expansions and job recoveries of their namesake epoch evaporated in weeks.
Where Employment Improved—and Where It Didn’t (WSJ) Published on: June 5, 2020 | Category: Economic Impact
  • Among goods-producing industries, manufacturing showed strong gains. In the services category, jobs in food services and drinking places rose by 1.4 million, accounting for about half of the gain in total nonfarm employment.
  • On the other hand, government payrolls continued to shrink as steep declines in revenue forced cities and states to lay off workers.
  • Construction registered the strongest improvement among goods-producing industries with an increase of 464,000 jobs, or almost half the number lost in April.
  • Despite the coronavirus shutdowns, house prices continued to rise, and some real-estate brokers and economists say they see signs that demand for new homes has started to rise in recent weeks.
Canada’s trade deficit doubled to $3.3B in April as COVID-19 walloped imports and exports (CBC) Published on: June 4, 2020 | Category: Canadian Business, Economic Impact
  • Exports fell to lowest level in a decade, while imports dropped to lowest since 2011.
  • “We are really getting hammered with respect to cars and crude,” said Peter Hall, chief economist at Export Development Canada.
  • The slump in auto and energy exports because of shutdowns was also reflected in Canada-U.S. trade data, where total trade fell by $23.4 billion, representing more than 90 per cent of Canada’s trade activity decline.
Pandemic Could Scar a Generation of Working Mothers (NY Times) Published on: June 4, 2020 | Category: Economic Impact
  • Working from home has highlighted and compounded the heavier domestic burden borne by women. Now office reopenings may force new career sacrifices.
  • Day care centers are just starting to reopen, with restrictions, so who will take care of their children?
  • For many working mothers, the gradual reopening won’t solve their problems, but compound them — forcing them out of the labor force or into part-time jobs while increasing their responsibilities at home.
The real impact of COVID-19 on income (Cardify) Published on: June 4, 2020 | Category: Economic Impact
  • Over 60% of Americans experienced a decline in income during the pandemic, both in the form of job losses and salary reductions.
  • Low income segments of the population were the most likely to suffer a total loss of income (14%). Conversely, high income individuals were at a much higher risk of an income reduction, but were much less likely to suffer total income loss (4%).
  • The vast majority of income losses arise from salary reductions, not job dismissals. As a result, we believe that looking at unemployment figures to assess the financial health of consumers coming out of COVID-19 is deeply flawed and incomplete.
Coronavirus crisis could cause $25tn fossil fuel industry collapse (Guardian) Published on: June 3, 2020 | Category: Canadian Business, Economic Impact
  • The coronavirus outbreak could trigger a $25tn (£20tn) collapse in the fossil fuel industry by accelerating a terminal decline for the world’s most polluting companies.
  • The report predicts a 2% decline in demand for fossil fuels every year could cause the future profits of oil, gas and coal companies to collapse from an estimated $39tn to just $14tn.
  • It follows findings from the International Energy Agency, which forecast the Covid-19 fallout would lead to the most severe plunge in energy demand since the second world war and trigger multidecade lows for the world’s consumption of oil, gas and coal, while renewable energy continued to grow.
Amazon is sued over warehouses after New York worker brings coronavirus home, cousin dies (Reuters) Published on: June 3, 2020 | Category: Canadian Business, Economic Impact
  • Amazon.com Inc has been sued for allegedly fostering the spread of the coronavirus by mandating unsafe working conditions, causing at least one employee to contract COVID-19, bring it home, and see her cousin die.
  • The lawsuit said Amazon has made JFK8, which employs about 5,000, a “place of danger” by impeding efforts to stop the coronavirus spreading, boosting productivity at the expense of safety.
  • The lawsuit seeks an injunction requiring that Amazon comply with worker safety and public nuisance laws, and not punish employees who develop COVID-19 symptoms or are quarantined.
Millions Of Americans Skip Payments As Tidal Wave Of Defaults And Evictions Looms (NPR) Published on: June 3, 2020 | Category: Economic Impact
  • Americans are skipping payments on mortgages, auto loans and other bills.
  • Help from Congress and leniency from lenders have kept impending financial disaster at bay for millions of people. But that may not last for long.
  • Ford says the company is allowing many customers hurt financially during the pandemic-related shutdowns to skip payments.
Ottawa to pledge billions to aid cash-strapped cities (Toronto Star) Published on: June 1, 2020 | Category: Canadian Business, Economic Impact
  • Prime Minister Justin Trudeau on Monday will pledge several billion dollars in assistance to help cash-strapped cities whose bottom lines have been battered by the pandemic, the Star has learned.
  • An official originally told the Star the funding would be earmarked for infrastructure funding. That was clarified Monday. In fact it would be an advancement of their promised share of gas tax funding “much much sooner,” said the federal official who spoke on background.
  • Municipalities back in April had asked the provinces and federal government for $10 billion — $7.6 billion to cover operating losses suffered by towns and cities and a further $2.4 billion for losses related to transit operations. Toronto alone is looking at a shortfall of up to $1.5 billion this year.
Hesitancy to resume activities marks reopening challenges: POLL (ABC News) Published on: June 1, 2020 | Category: Economic Impact, Global Response
  • With two-thirds of Americans worried about a second wave of the coronavirus, a new ABC News/Washington Post poll finds nearly 6 in 10 people are unready to resume their pre-pandemic activities, underscoring continued public unease as the nation seeks a return to normalcy.
  • 59 per cent report severe economic impacts in their community — up from 43 per cent two months ago. Among those employed before the pandemic began, 24 per cent have been laid off or furloughed.
  • Further demonstrating the extent of the pandemic, 42 per cent of Americans now know someone personally who has been diagnosed with COVID-19, up nearly fourfold from 11 per cent in late March.
China’s Barely Begun Economic Recovery Shows Signs of Stalling (WSJ) Published on: June 1, 2020 | Category: Economic Impact
  • More factories are reopening, but they face falling orders from overseas customers.
  • More and more Chinese factories have reopened for work in the past three months as authorities have eased their once-aggressive coronavirus measures.
  • Taken together, China’s manufacturing surveys suggest that the pace of the economic recovery from the coronavirus disruption is slowing, due in large part to lackluster overseas buying, said Yang Weixiao, a Beijing-based economist at Kaiyuan Securities.
US online grocery shopping jumps as chains rush to add capacity (FT) Published on: June 1, 2020 | Category: Economic Impact
  • A Brick Meets Click/Mercatus survey suggested that 43m US shoppers placed 73.5m online grocery orders in May, at an average of $90 per order.
  • Sales in the period are estimated at $6.6bn, a 24 per cent increase over April — and a 450 per cent increase on the level in August last year.
  • It also found that household penetration for online grocery buying had risen to 33 per cent in May, up 2 per cent from April, and more than double what had been projected for this period before the impact of coronavirus.
Tenants Largely Stay Current on Rent, for Now (NY Times) Published on: May 31, 2020 | Category: Economic Impact
  • Despite a 14.7 percent unemployment rate and millions of new jobless claims each week, collections at many buildings are only slightly below where they were last year, when the economy was booming.
  • How can this be? The answer is a little negotiation and a lot of government money.
  • The $2 trillion CARES Act, which backstopped household finances with stimulus checks and extended unemployment benefits, has kept a surprising number of tenants current on their monthly balances.
New York governor signs bill that provides death benefits to families of frontline workers (CNN) Published on: May 30, 2020 | Category: Economic Impact, Global Response
  • New York Gov. Andrew Cuomo has signed a bill that gives death benefits to families of frontline workers who died battling the coronavirus pandemic.
  • “It is the least we can do to say thank you, and we honor you, and we remember you. You gave your lives for us. We will be there to support your families going forward,” Cuomo said at a news conference on Saturday.
Small signs of life return to US economy (FT) Published on: May 30, 2020 | Category: Economic Impact, Global Response
  • An increase in traffic and a fall in panic purchases at the supermarket are among the signs that Americans are taking their first cautious steps back to normality after coronavirus flatlined the economy.
  • There is still a long way to go after months of lockdown. But the low for the “two-month recession” probably occurred in April, says Douglas Porter, chief economist at BMO Financial Group.
  • Purchases of toilet paper and disinfectants have declined 63 and 83 per cent, respectively, according to data from Nielsen.
Canada GDP Fell at Near Record 8.2% (WSJ) Published on: May 29, 2020 | Category: Canadian Business, Economic Impact
  • Canada’s gross domestic product, or the broadest measure of goods and services produced in an economy, fell at an 8.2% annualized rate in the first quarter, to 2.10 trillion Canadian dollars ($1.53 trillion), Statistics Canada said Friday.
  • The drop in Canadian output in the first three months of 2020 was steeper relative to the U.S., its biggest trading partner and southern neighbor.
  • Commerce Department data indicate U.S. GDP fell at a 5% annual rate in the first quarter.
COVID-19 Pandemic Wreaking Havoc on Americans’ Retirement Plans While Anxiety over Continued Market Risks Remains (Business Wire) Published on: May 28, 2020 | Category: Economic Impact
  • 58% of Americans say the economic impacts of COVID-19 are having a negative effect on their financial retirement plans.
  • 54% of Americans are worried the market hasn’t bottomed out yet.
  • Over seven in 10 (72%) say the impacts of the COVID-19 pandemic are making them rethink how to protect their retirement savings from volatility.
Designing insurance for the next pandemic (FT) Published on: May 28, 2020 | Category: Economic Impact
  • But Ms. Eastwood has been told by Hiscox, the Grand’s insurer, that the policy does not cover the costs of the closure, because the government’s wide-ranging response to the pandemic falls outside the scope of the contract.
  • Along with about 400 other companies the theatre is looking at whether to sue Hiscox over the claim.
  • Insurers say the pandemic will be one of the most expensive events in the history of their industry, potentially costing them more than $200bn — with half of that in payouts.
The Health 202: Americans are not expecting a quick return to normal. Or a vaccine next year. (Washington Post) Published on: May 28, 2020 | Category: Economic Impact, Global Response
  • A spate of recent polls reveals Americans’ attitudes toward the novel coronavirus, which has taken the lives of 100,000 people in the United States. Here’s what we learned.
  • Nearly half of Americans say they or someone in their household skipped or delayed medical care because of the outbreak.
  • A third of Americans are showing signs of clinical anxiety or depression, Census Bureau data shows, the most definitive and alarming sign yet of the psychological toll exacted by the coronavirus pandemic.
U.S. Businesses See Few Signs of Recovery Through Mid-May (WSJ) Published on: May 27, 2020 | Category: Economic Impact
  • U.S. businesses saw limited evidence of a recovery in recent weeks, with economic activity continuing to decline amid the coronavirus pandemic, the Federal Reserve said Wednesday.
  • The labor market continued to deteriorate and consumer spending fell further as retailers and restaurants remained largely closed in most of the country through mid-May, the Fed said in its periodic report of anecdotes from businesses around the country known as the “beige book.”
  • Travel-industry contacts in the Boston area reported that large conventions have been canceled through early fall, costing the hotel industry 200,000 room-nights as a result.
Disney World sets reopening date (CNN) Published on: May 27, 2020 | Category: Economic Impact, Global Response
  • Disney World will reopen its gates, ending a multi-month closure of the park that left the Walt Disney Company reeling.
  • The Disney theme park, which employs some 70,000 people, plans to begin a phased reopening on July 11 for its Magic Kingdom and Animal Kingdom parks and July 15 for EPCOT and Hollywood Studios, the company said on Wednesday.
  • Disney is implementing several measures to reopen safely and prevent the spread of the coronavirus at its parks.
Experts Predict How Coronavirus May Change Hotel Stays (Huffington Post) Published on: May 26, 2020 | Category: Economic Impact, Global Response
  • One area undergoing massive changes ― and preparing for more ― is the hotel business.
  • “Travelers will certainly hear hotels talk about their sanitization and cleaning protocols, and certain properties or brands may seek cleanliness certifications,” noted Melanie Lieberman, senior travel editor at The Points Guy. “The key here will be communicating their cleanliness standards to guests.”
  • “Marriott, for example, said it’s going to use electrostatic sprayers and hospital-grade disinfectants,” Lieberman said.
  • “There will be an acceleration of self-service tech solutions in hotels,” said Konrad Waliszewski, co-founder and CEO of the travel app TripScout. “Services that would have happened anyway over the next decade ― such as self-service and contactless check-ins, mobile keys, mobile check-ins, and mobile SMS/chat for requests ― will become the norm for hotels.”
A Socially Distanced Las Vegas? What Are the Odds? (NY Times) Published on: May 26, 2020 | Category: Economic Impact
  • But when the casinos and resorts open up — tentatively early June — after weeks of being shut down, players will no longer be able to touch the cards.
  • While many cities and states grapple with the process of reopening, the stakes are high for Las Vegas, which has been hit particularly hard. About one-third of the local economy comes from the leisure and hospitality industry, more than any other major metropolitan area of the country.
  • The famed all-you-can-eat buffets will be gone. So will the nightclubs.
Furniture retailers tell customers it’s OK to touch, sit, lie down because they have coronavirus precautions in place (WRAL) Published on: May 25, 2020 | Category: Economic Impact
  • Memorial Day is traditionally a big day for retail shopping, but as stores only reopened two weeks ago ease pandemic-related restrictions were eased, business remains a bit slow as both retailers and customers continue to adjust to the new rules.
  • Kim Kyle, who run Steven Shell Furniture in Raleigh’s Cameron Village shopping center, said the store also is making its safety protocols known to make customers more comfortable.
  • “Every morning, we come in an hour early,” she said. “We wipe down every piece of furniture, especially paying attention to the handles. We are using Lysol to disinfect.”
The meat industry is trying to get back to normal. But workers are still getting sick — and shortages may get worse. (Washington Post) Published on: May 25, 2020 | Category: Economic Impact
  • Tyson Foods, the largest meat processor in the United States, has transformed its facilities across the country since legions of its workers started getting sick from the novel coronavirus.
  • It has set up on-site medical clinics, screened employees for fevers at the beginning of their shifts, required the use of face coverings, installed plastic dividers between stations and taken a host of other steps to slow the spread.
  • Despite those efforts, the number of Tyson employees with the coronavirus has exploded from less than 1,600 a month ago to more than 7,000 today, according to a Washington Post analysis of news reports and public records.
I’m a Chef in a Seaside Town. I’m Not an Epidemiologist. (The Atlantic) Published on: May 25, 2020 | Category: Economic Impact
  • Business owners like me face a summer of uncertainty, and I’m terrified.
  • Cooped up in large towns and cities, many people heading into their third month of quarantine have been trying to decide whether they should visit their favorite summer destinations this year. My answer is an unsatisfying maybe.
  • We returned later that night to an exhausted and shaken crew. In practice, the safety protocols we had agonized over had been hard for our team to enforce. While we had been away, the dining room filled with day-trippers, who crammed around our spaced-out tables.
Europe’s luxury goods capitals reopen to new reality (FT) Published on: May 24, 2020 | Category: Economic Impact
  • Pandemic forces upmarket brands to rethink pricing, store locations and supply chains.
  • As the fashion capitals of Paris, Rome and Milan stir back to life, the luxury industry faces a stark reality: Chinese tourists, who accounted for two-thirds of the sector’s sales in Europe before Covid-19, are absent and unlikely to return any time soon.
  • “The fashion industry is very physical, we need designers, tailors, fittings, fabrics, not everything can be managed remotely.” To encourage staff back to the office in Milan, Moncler is offering them bicycles, free doctor consultations and Covid-19 antibody tests.
How COVID-19 is exposing Canada’s socioeconomic inequalities (The Globe & Mail) Published on: May 23, 2020 | Category: Canadian Business, Economic Impact
  • Preliminary data support the idea that COVID-19 is hitting marginalized communities harder than others.
  • Public-health messages about staying home, which are aimed at curbing the spread of COVID-19, have largely ignored the realities faced by low-income workers, people who are homeless or other at-risk groups, said Andrew Boozary, a doctor who is executive director of health and social policy at University Health Network.
  • A recent Toronto Public Health analysis of COVID-19 cases in the city showed that neighbourhoods in Toronto with the lowest incomes, highest rates of unemployment and highest concentrations of newcomers consistently had twice the number of cases of COVID-19 and more than twice the rate of hospital admissions.
How Upbeat Vaccine News Fueled a Stock Surge, and an Uproar (NY Times) Published on: May 23, 2020 | Category: Economic Impact
  • The desperate hunt for treatments and vaccines has changed how researchers, regulators, drug companies like Moderna, investors and journalists do their jobs.
  • Nine hours after its initial news release — and after the markets closed — the company announced a stock offering with the aim of raising more than $1 billion to help bankroll vaccine development.
  • That offering had not been mentioned in Moderna’s briefings of investors and journalists that morning, and the company chairman later said it was decided on only that afternoon.
Debt investors lay claim to islands, cruise ships and theme parks (FT) Published on: May 22, 2020 | Category: Economic Impact
  • Companies pledge all manner of assets as collateral for Covid-19 rescue deals.
  • The Miami-based operator pledged the 268-acre Caribbean idyll it has owned since 1986 as collateral, along with a second island in Belize and a couple of ships.
  • So-called secured debt deals were once a rarity in the corporate bond market, but American companies are now pawning their family silver as never before.
The Covid Surcharge: Companies Confront the Unforgiving Economics of Coronavirus (WSJ) Published on: May 22, 2020 | Category: Economic Impact
  • Companies from major retailers and package carriers to local restaurants and hair salons are awakening to a new economic reality in the age of the new coronavirus: Being open for business is almost as hard as being closed.
  • Facing higher costs to keep workers and customers safe and an indefinite period of suppressed demand, businesses are navigating an ever-narrower path to profitability.
  • Walmart Inc., Target Corp. and Home Depot Inc. this week said they absorbed more than $2 billion combined in added expenses for wages, bonuses and other benefits for workers during the early months of the pandemic.
Scientists vs politicians: the reality check for ‘warp speed’ vaccine research (FT) Published on: May 22, 2020 | Category: Economic Impact, Global Response
  • Hollywood-style messages from politicians about beating the pandemic downplay the technical complexity.
  • Hope that a coronavirus vaccine might be ready “prior to the end of the year” was even quicker than the optimistic — but often repeated — timeline for a vaccine to be ready in 12 to 18 months.
  • But many scientists feel a duty to dampen the enthusiasm. They say a vaccine could take much longer because little is known about the disease and how bodies will react to attempts at immunisation.
  • In fact, some warn we may never create a vaccine for Covid-19.
New data will track reopening in real time (Reuters Breaking Views) Published on: May 21, 2020 | Category: Economic Impact
  • Novel data sources have sprung up that provide real-time information traditional statistics can’t offer. Some may have staying power.
  • Mobility reports track how much iPhone and Android users walk, drive cars, take public transit or go to workplaces compared to what used to be normal.
  • Similarly, Harvard researchers have put together a site that tracks consumer spending, small business closures and job postings at local, state and national levels. It shows lifting lockdowns may not result in a quick bounce back.
  • Despite Georgia’s aggressive reopening, for example, consumer spending is still down 20%.
Spelling out the economic recovery options as the world starts to reopen from COVID-19 (CBC) Published on: May 20, 2020 | Category: Canadian Business, Economic Impact
  • As economies around the world take their first, tentative steps toward restarting, Canadians are beginning to wonder what life may look like on the other side of this pandemic.
  • Will the recovery look like a V or more like a U? What about a Nike “swoosh” or something wobbly like a W? Or the worst case scenario — will we take the dreaded L?
  • “There’s virtually no one who thinks there will be a V-shape recovery,” said Karl Schamotta, chief market strategist at foreign exchange firm Cambridge Global Payments.
Time to buy a car? Industry hopes for coronavirus silver lining (FT) Published on: May 20, 2020 | Category: Economic Impact
  • Indications from China, which came out of lockdown as Europe and the Americas were just entering theirs, are of a sharp rise in individual car use as commuters shun public transport.
  • By the middle of April, congestion in major Chinese cities was back to 90 per cent of pre-lockdown levels, while subway use lingered at just 50 per cent, according to figures from Bernstein.
  • Premium brand Volvo reported that sales in China were 20 per cent higher than in 2019, while the whole market in April was 4.4 per cent higher than a year earlier.
Covid-19 is helping Walmart make up ground against Amazon (Quartz) Published on: May 19, 2020 | Category: Economic Impact
  • Walmart has almost 5,000 stores in the US, which they may seem like an obvious drag on its business when much of the country is sheltering in place, but that huge network of stores is helping drive the retailer’s e-commerce business amid the pandemic.
  • In its most recent quarter, the mega-retailer said its US e-commerce sales shot up 74% versus the same period last year, driven by a surge of store pickups of online grocery orders as well as delivery.
  • The option for customers to buy online but pickup at a physical store—a service that’s free but requires a $30 minimum order—has been key to Walmart’s success in e-commerce, which it was slow to develop after Amazon started to take over online retail.
The Mnuchin/Powell show (Axios) Published on: May 19, 2020 | Category: Economic Impact, Global Response
  • The Treasury Department and Federal Reserve both think the worst could be yet to come for America’s economy.
  • Fed Chair Jerome Powell reiterated his belief that a full recovery may not come until there’s a vaccine, and Treasury Secretary Steven Mnuchin said there’s the risk of “permanent damage” if states delay reopening.
U.S. workers hit McDonald’s with class action over COVID-19 safety (Reuters) Published on: May 19, 2020 | Category: Economic Impact, Global Response
  • Five McDonald’s workers in Chicago filed a class action lawsuit against the chain on Tuesday, accusing it of failing to adopt government safety guidance on COVID-19 and endangering employees and their families.
  • McDonald’s failed to provide adequate hand sanitizer, gloves and masks and has not notified its staff when an employee has become infected with the new coronavirus, according to a copy of the lawsuit provided by a spokesman for the workers.
  • The workers requested the Illinois state court issue an injunction, which would make McDonald’s stop requiring workers to reuse masks, mandate face coverings for customers and require the company to inform employees if a coworker becomes infected.
Home-Decor Retailer Pier 1 Looks To Close For Good (NPR) Published on: May 19, 2020 | Category: Economic Impact
  • Pier 1 Imports — one of America’s most prominent home-decor chains — is packing it in.
  • “Unfortunately, the challenging retail environment has been significantly compounded by the profound impact of COVID-19, hindering our ability to secure such a buyer and requiring us to wind down” said CEO and Chief Financial Officer Robert Riesbeck.
  • The coronavirus pandemic has devastated “nonessential” retail stores and cut sales at furniture and home furnishings stores by more than half.
COVID-19’s financial impact on N.J.’s hospitals is devastating, study finds (ROI New Jersey) Published on: May 19, 2020 | Category: Economic Impact
  • The financial impact of the coronavirus pandemic on New Jersey’s hospital systems is severe, according to a financial impact report from the New Jersey Hospital Association.
  • The hospitals said revenue fell 32%, or $650 million per month, due to Gov. Murphy’s executive order suspending all elective surgeries.
  • Since the virus first hit New Jersey on March 4, hospital expenses have increased 10.6% or $214 million per month, the report said.
The New Face of Restaurant Hospitality Wears a Mask (NY Times) Published on: May 18, 2020 | Category: Economic Impact
  • In fits and starts around the country, restaurants are beginning to reopen, guided by a hodgepodge of federal, state and local laws and recommendations that seems to shift daily
  • The face mask is the most ubiquitous, and perhaps divisive, tool in an arsenal of protective measures, like disposable menus and plastic partitions, that restaurants are incorporating into an emerging culture of pandemic hospitality.
  • The Hillstone Restaurant Group, which runs 45 restaurants in several states, decided that its Texas servers would not wear masks in part because the face wear didn’t match the style of service. A server sued; a judge issued a temporary restraining order and is expected to make a final ruling on May 20.
The New Airline Travel: Fewer Flights, More Layovers, Rules for Bathrooms (WSJ) Published on: May 18, 2020 | Category: Economic Impact
  • Airports and airlines are rolling out temperature checks for crew and, increasingly, passengers, as well as thermal scans to spot people with elevated body temperatures.
  • Forget about the perks of priority boarding at Air France. The carrier is one of several boarding passengers seated at the back of the aircraft first, to limit traffic jams in the aisle.
  • Some airlines are considering requiring passengers to sign health certifications, or to eventually carry “immunity passports”—documentation that a passenger has had, and recovered from, the virus.
Transit workers are paying a heavy price during the pandemic (Washington Post) Published on: May 17, 2020 | Category: Economic Impact, Leadership
  • The covid-19 deaths were piling up so fast that New York City bus driver Danny Cruz began to worry that no one understood the toll the virus was taking on his fellow transit workers.
  • By Cruz’s count, 129 New York City transit workers have died of covid-19.
  • Across the country, an estimated 430,000 public transit workers, including train operators and bus drivers like Cruz, have kept systems operating, moving essential workers such as doctors, nurses and first responders who have been hailed as heroes.
China’s once-resilient tech economy starting to crack under pressure from coronavirus economic carnage (SCMP) Published on: May 17, 2020 | Category: Economic Impact
  • In the first quarter of 2020, the number of Chinese recruitment postings across all industries fell 22.6 per cent compared with the same period last year.
  • A survey found that 5.4 per cent of tech firms experienced job cuts while 12.9 per cent have reduced contractors, interns and part-time employees.
U.S. Secret Service: “Massive Fraud” Against State Unemployment Insurance Programs (KrebsOnSecurity) Published on: May 16, 2020 | Category: Canadian Business, Economic Impact
  • A well-organized Nigerian crime ring is exploiting the COVID-19 crisis by committing large-scale fraud against multiple state unemployment insurance programs, with potential losses in the hundreds of millions of dollars, according to a new alert issued by the U.S. Secret Service.
  • A memo seen by KrebsOnSecurity that the Secret Service circulated to field offices around the United States on Thursday says the ring has been filing unemployment claims in different states using Social Security numbers and other personally identifiable information (PII) belonging to identity theft victims, and that “a substantial amount of the fraudulent benefits submitted have used PII from first responders, government personnel and school employees.”
  • The primary state targeted so far is Washington, although there is also evidence of attacks in North Carolina, Massachusetts, Rhode Island, Oklahoma, Wyoming and Florida.
Amazon planning to reopen its French warehouses from May 19 (Financial Post) Published on: May 15, 2020 | Category: Economic Impact, Global Response
  • Amazon said on Friday it aims to gradually reopen its French warehouses from May 19 as it finalizes an agreement with unions and work councils to end a dispute over coronavirus protection steps that closed the sites for more than one month.
  • The U.S. e-commerce giant’s six French warehouses, which employ about 10,000 people on permanent and interim contracts, have been closed since April 16 following court rulings that ordered it to restrict deliveries during the COVID-19 pandemic or face hefty fines.
U.S. Economy Adds to Grim Records, Signaling Yearslong Recovery (Bloomberg) Published on: May 15, 2020 | Category: Canadian Business, Economic Impact
  • U.S. retail sales and factory output registered the steepest declines on record in April, illustrating a recession so deep that it will likely take years to fully recover.
  • Revenue at retailers and restaurants fell 16.4% from the prior month, almost double the 8.3% drop in March which was previously the worst in data back to 1992, according to a Commerce Department report released Friday.
  • That compared with the median projection for a 12% decline.
How Investors Can Navigate Pandemic-Related Risk in Emerging Markets (HBR) Published on: May 15, 2020 | Category: Economic Impact, Leadership
  • In a few countries there are already early signs of political instability and civil unrest; in others the political effects will become clearer as the virus and government responses unfold over the months ahead.
  • Business environments in these locations were already complex, but the pandemic makes the politics even more complicated and the relationships and information needed to navigate them even harder to access.
  • Foreign investors will, at a minimum, face two widespread yet underappreciated risks.
Coronavirus ‘could cost global economy $8.8tn’ says ADB (BBC) Published on: May 15, 2020 | Category: Economic Impact
  • The coronavirus pandemic could cost the global economy between $5.8tn and $8.8tn (£4.7tn-£7.1tn), according to Asian Development Bank (ADB).
  • That’s more than double last month’s prediction and equates to 6.4%-9.7% of the world’s economic output.
Tesla employees who don’t return to work could lose unemployment benefits (TechCrunch) Published on: May 14, 2020 | Category: Economic Impact, Leadership
  • Furloughed Tesla employees who are called back to work could lose unemployment benefits if they choose to stay at home due to COVID-19 concerns, the company’s head of human resources Valerie Workman wrote in an email sent to workers Wednesday.
  • Musk has lobbed repeated criticisms at Alameda County and its health officials for extending a stay-at-home order to the end of May. Over the weekend, Musk threatened to pull Tesla operations out of the state and sue the county.
  • Tesla filed a lawsuit against the county Saturday seeking injunctive relief.
McDonald’s Details What Dining In Will Look Like (NY Times) Published on: May 14, 2020 | Category: Canadian Business, Economic Impact
  • The fast-food chain distributed a guide to franchise owners with instructions like putting “closed” signs on tables to promote social-distancing and cleaning bathrooms every half-hour.
  • Once a local government says that restaurants can admit dine-in guests, a McDonald’s official in that region will decide whether reopening can begin, it says. Then individual franchise owners will make a decision about whether to go through with reopening.
  • Unlike the small, independent restaurants that have been battered during the pandemic, McDonald’s was in a good position to weather the economic fallout. Its drive-throughs have stayed open, and they accounted for about two-thirds of the company’s revenue before the crisis.
Economic Shock of Virus Hit Lower-Income Households Harder, Fed Finds (WSJ) Published on: May 14, 2020 | Category: Economic Impact
  • Almost 40% of households earning less than $40,000 a year experienced at least one job loss in March, versus 19% of households earning between $40,000 and $100,000 and 13% of those earning more than $100,000, the Fed said.
  • And while 85% of those with no work disruption said they could pay the current month’s bills in full, just 64% of those who had lost a job or had their hours cut said they could cover their expenses for the month, the Fed said in the report released Thursday.
  • The survey reveals a rapidly widening gap between those households that experienced the early economic effects of the pandemic and those that were spared.
Americans Keep Clicking to Buy, Minting New Online Shopping Winners (NY Times) Published on: May 13, 2020 | Category: Economic Impact
  • While the shutdowns immediately altered how people spent their money, the patterns have continued to shift as the weeks have gone on, new data shows, shaped by waves of panic buying and even payouts of government aid.
  • The latest bump in online spending came after the government sent out stimulus payments to tens of millions of American households beginning on April 11.
  • Many e-commerce companies are now in a much stronger position than before.
Fed Chair warns of long, painful downturn if Congress does not provide more economic relief (Washington Post) Published on: May 13, 2020 | Category: Economic Impact, Global Response
  • Almost 40 percent of U.S. households making less than $40,000 a year lost a job in March, citing results from a Fed survey coming out later this week.
  • They found more than 2 per cent of U.S. small businesses have closed permanently already.
  • “A lot firms had half a month to two months worth of cash on hand. They can stretch it by cutting costs or taking a government loan, but we are now getting several months into the crisis, and we’re getting to the point where firms are going beyond the cash on hand to weather the crisis,” said Alex Bartik, an economics professor at the University of Illinois.
  • Several Fed officials said this week they think the U.S. economy will soon hit its low point and then start to rebound, but they have warned a recovery is likely to be slow.
Apple is reopening 5 stores in the US — here’s a list of the locations that have opened so far (Business Insider) Published on: May 13, 2020 | Category: Economic Impact
  • Apple has begun reopening some retail stores in the US in certain states like Alabama, Alaska, South Carolina, and Idaho.
  • Apple says the initial focus will remain on customer service through the Genius Bar, and is encouraging customers to shop virtually when possible.
  • The company will also enforce precautions like temperature checks, face masks, and social distancing at its stores.
From PepsiCo to GM, Big Advertisers Set to Cancel Commitments to TV Networks (WSJ) Published on: May 12, 2020 | Category: Economic Impact
  • TV ad spending fell in the initial weeks of the coronavirus pandemic, but was insulated from an even bigger drop.
  • That is because the majority of the roughly $42 billion spent on national TV ads in the U.S. is bound by contractual commitments that are made well in advance of a new TV season, which starts each September.
  • Marketers are worried about the ability to sell their products in a prolonged economic downturn, and aren’t certain what programming networks can put on the air, given the near-total shutdown of production in Hollywood.
Booking Holdings chief seeks government subsidies for travel (FT) Published on: May 12, 2020 | Category: Economic Impact
  • Governments should subsidise consumers’ holidays to boost the tourism industry once a Covid-19 vaccine or treatment is found, according to the head of one of the largest travel booking companies, who predicted the sector will be one of the last to recover from the pandemic.
  • It would be “years, not quarters” before travel rebounds, said Glenn Fogel, chief executive of Booking Holdings, telling the Financial Times that the industry merited its own stimulus package because of its importance to most big economies.
  • Governments should “prime the pump” in such a way because travel was an important provider of entry-level jobs, he said.
Britons spending an extra £250m a week on food, alcohol and entertainment during lockdown, suggests survey (The Independent) Published on: May 12, 2020 | Category: Canadian Business, Economic Impact
  • Despite increased spending on food, drink and isolation pursuits, consumers are spending an average of £17.9 bn less per month across the economy more broadly.
  • The survey of more than 2,000 adults aged between 35 and 54 by the financial services firm Legal and General and CEBR, an economics consultancy, found the pandemic is creating “fundamental” changes to how consumers spend their money.
  • The survey estimates that Britons are spending 24 per cent less on takeaways and 9 per cent less on tobacco.
TTC faces $520-million shortfall by Labour Day due to pandemic (Toronto Star) Published on: May 12, 2020 | Category: Canadian Business, Economic Impact
  • The TTC is facing a budget shortfall from the COVID-19 crisis that could grow to more than half a billion dollars by Labour Day, and the agency will be unable to continue providing vital transit service unless it gets financial help from the provincial and federal governments, according to a new report.
  • The document, which was authored by TTC staff and will be discussed at a special virtual meeting of the agency’s board Wednesday, estimates the agency is facing $520 million in losses and increased costs as a result of the pandemic, which has sent transit ridership and fare revenue plummeting to a fraction of pre-crisis levels.
Coronavirus: Musk defies orders to reopen Tesla’s California plant (BBC) Published on: May 12, 2020 | Category: Economic Impact, Leadership
  • Tesla has reopened its only US electric car plant in California, despite local orders against manufacturing.
  • While the state has eased restrictions to allow manufacturing, Alameda County, where the Fremont plant is located, has not.
  • US Treasury Secretary Steven Mnuchin said on Monday California “should prioritize” helping Tesla reopen because it was one of the biggest manufacturing employers in the state.
Ottawa to create bridge financing for big companies, including airlines and energy, that need help in crisis (Financial Post) Published on: May 11, 2020 | Category: Canadian Business, Economic Impact
  • Canada on Monday said it would create a bridge financing facility for large employers including in the airline and energy sectors that need help to get through the economic downturn caused by the coronavirus.
  • The bridge lending facility will be for all companies, except those in the financial sector, with an annual revenue of about $300 million seeking financing of about $60 million or more that have “significant operations or workforce in Canada.”
  • Companies that use the lending facility will have to commit to respect collective bargaining agreements, protecting workers’ pensions, and support “national climate goals.”
DIY hairdressers under covid-19 lockdown tend it like Beckham (The Economist) Published on: May 11, 2020 | Category: Economic Impact
  • Data from Google suggest that the pandemic has caused a global surge in DIY haircare.
  • Buzzcuts have seen the biggest increase. In early April, searches for “hair clippers” (or the equivalent in languages other than English) were up five-fold since February. Searches for “beards” and “moustaches” were up by 50%.
  • Hairdressers and salons have been among the first establishments to reopen in some countries easing lockdown restrictions. Not a moment too soon: after falling to 40% below usual levels at the start of April, global searches for “hairdresser” are now 70% higher than they were before the pandemic started.
Factories Close for Good as Coronavirus Cuts Demand (WSJ) Published on: May 11, 2020 | Category: Economic Impact, Global Response
  • Factory furloughs across the U.S. are becoming permanent closings, a sign of the heavy damage the coronavirus pandemic and shutdowns are exerting on the industrial economy.
  • Those factory shutdowns will further erode an industrial workforce that has been shrinking as a share of the overall U.S. economy for decades.
  • The closures suggest that a growing share of the record job losses in recent weeks won’t be temporary, said Gabriel Ehrlich, an economic forecaster at the University of Michigan.
Rise in German virus infections spurs concern (France24) Published on: May 10, 2020 | Category: Economic Impact, Global Response
  • Germany’s coronavirus spread appears to be picking up speed again, official data showed Sunday, just days after Chancellor Angela Merkel said the country could gradually return to normal.
  • The latest data raised alarm after Merkel only on Wednesday declared that Germany had left the “first phase” of the pandemic behind it and federal states announced relaxations of social restrictions.
  • German local authorities have however agreed to pull an “emergency brake” and reimpose social curbs if the infection rate rises above 50 cases per 100,000 residents over a week.
New virus outbreaks hamper efforts to reopen global economy (FT) Published on: May 10, 2020 | Category: Economic Impact
  • New Covid-19 outbreaks in South Korea, Germany and China have highlighted the challenge faced by governments seeking to loosen social restrictions, as millions of Europeans prepare for the tentative reopening of their economies today.
  • France, Spain, Denmark, Norway and the UK will all lift some measures brought in to contain the spread of the deadly virus, as leaders across the region seek to limit the worsening economic damage.
  • In Spain, just over half the population will enter “phase 1” of the country’s exit from lockdown, allowing bars and restaurants to serve customers outside and people to congregate in groups up to 10.
IMF warns of further drop in global growth due to Covid-19 (Guardian) Published on: May 9, 2020 | Category: Economic Impact, Global Response
  • The head of the International Monetary Fund (IMF) has signalled a possible downward revision of global economic forecasts, and warned the United States and China against rekindling a trade war that could weaken a recovery from the coronavirus pandemic.
  • The IMF’s April projection for a 3% contraction the global economy would mark the steepest downturn since the Great Depression of the 1930s.
  • Kristalina Georgieva, the IMF’s managing director, said the IMF had already provided emergency funding to 50 of the 103 countries that had requested aid.
  • The IMF’s chief economist, Gita Gopinath, said that the situation had worsened since March when the IMF projected that emerging markets and developing countries would need $2.5tr in external financing to manage the health and economic crisis.
Younger workers are hit hardest in the coronavirus job market, and it spells bad news for millennials and Gen Z (Business Insider) Published on: May 8, 2020 | Category: Economic Impact
  • Younger workers are bearing the economic toll of the coronavirus pandemic more so than older workers, according to a recent report by Data for Progress.
  • More than half of those polled under age 45 have lost jobs, lost hours, or been put on leave, the report found.
  • It’s bad news for millennials, who are still financially behind from the Great Recession, and Gen Z, who might find themselves on the same path as older millennials.
Health-Care Workers See Steep Job Losses From Coronavirus (WSJ) Published on: May 8, 2020 | Category: Economic Impact
  • The jobs report released Friday said the health-care sector shed a record number of jobs in April as medical facilities halted elective procedures and doctors’ and dentists’ offices closed because of shutdowns aimed at containing the coronavirus.
  • Hospitals cut nearly 135,000 jobs in April, according to the Labor Department.
  • St. Louis-based BJC HealthCare announced furloughs this week as it faced projections that operations won’t reach pre-pandemic levels before 2021, said Richard Liekweg, the system’s chief executive.
White-Collar Companies Race to Be Last to Return to the Office (NY Times) Published on: May 8, 2020 | Category: Economic Impact, Leadership
  • Google and Facebook employees were told Thursday that they could stay home until next year.
  • The moves reflect the reality that no one is sure how the coronavirus pandemic will evolve.
  • But even after the coronavirus no longer requires it, working from home is likely to retain a significant presence in corporate life.
The global food supply chain is passing a severe test (The Economist) Published on: May 7, 2020 | Category: Canadian Business, Economic Impact
  • If you live in the rich world and want an example of trade and global co-operation, look no further than your dinner plate.
  • Today, thanks to fleets of delivery lorries filling supermarket shelves, you can binge-eat as you binge-watch.
  • This capitalist miracle reflects not a monolithic plan, but an $8trn global supply chain adapting to a new reality, with millions of firms making spontaneous decisions, from switching rice suppliers in Asia to refitting freezers.
The Results Are In for the Sharing Economy. They Are Ugly. (NY Times) Published on: May 7, 2020 | Category: Economic Impact
  • The coronavirus pandemic has gutted the so-called sharing economy.
  • “While we know Airbnb’s business will fully recover, the changes it will undergo are not temporary or short-lived,” Brian Chesky, Airbnb’s chief executive, wrote in a memo to employees.
  • Thirty percent of gig-economy revenue could disappear over the next one to two years, with a portion of it unlikely to return, said Daniel Ives, managing director of equity research at Wedbush Securities.
Gap, Nordstrom prepare to reopen hundreds of stores with new protocols for workers, shoppers (Washington Post) Published on: May 6, 2020 | Category: Economic Impact
  • Nordstrom and Gap are among a growing group of national retailers that will gradually reopen their stores in the coming weeks as states emerge from coronavirus shutdowns, even as the U.S. death toll from covid-19 continues to rise.
  • But the company said stores will look and feel a bit different: Bathrooms and fitting rooms will be closed, and returned items will be quarantined for 24 hours before being placed back on shelves.
  • Shopping hours will be reduced, and the flow of customers will be “actively” monitored in stores.
A return to 1970s stagflation is only a broken supply chain away (FT) Published on: May 6, 2020 | Category: Economic Impact, Global Response
  • Central bankers insist that inflation expectations are anchored.
  • Consumer retrenchment will persist only until a Covid-19 vaccine arrives. If this takes another 12 to 18 months, as scientists believe, pent-up demand will build as never before.
  • Therein lies the inflationary risk for the post-coronavirus world. As part of a growing backlash against globalisation in general, and China in particular, nations are threatening to bring their offshore platforms back home.
One in five Wendy’s is out of beef, analyst says (CNN) Published on: May 5, 2020 | Category: Economic Impact
  • The national meat shortage has come for Wendy’s.
  • Around 1,000, or 18%, of Wendy’s 5,500 US restaurants are not serving any hamburgers or other meat-based items, according to an analysis of online menus at every location conducted by financial firm Stephens.
  • Many meat suppliers have temporarily closed their factories because workers are falling ill from Covid-19.
Wall Street ‘flying blind’ after companies scrap guidance (FT) Published on: May 5, 2020 | Category: Economic Impact
  • The number of US blue-chips offering full-year profit guidance alongside their first-quarter earnings has been cut in half, leaving Wall Street analysts struggling to assess the full impact of measures to contain the spread of coronavirus.
  • America’s earnings season has passed the halfway mark, with 283 companies in the S&P 500 having reported by Friday last week. Within that group, 53 of the 103 companies that provided earnings guidance earlier this year have scrapped it according to Credit Suisse data.
  • The bank expects just 23 per cent of S&P companies to offer guidance for the year, a little less than half the usual proportion.
Who pays the bill? The coming deluge of pandemic litigation (FT) Published on: May 5, 2020 | Category: Economic Impact
  • Trial lawyers are mobilising, seeing an almost bottomless well of negligence cases against employers, and businesses big and small.
  • Stricken companies are turning to insurers desperate for the cash. Others are trying to shed obligations.
  • Even more importantly, the vast potential liabilities will greatly exceed the ability of many defendants to pay them.
  • Once lockdowns are lifted, fear of costly suits alone could hamper the recovery.
Air Canada reports $1.05B first-quarter loss due to impact of COVID-19 pandemic (CBC) Published on: May 4, 2020 | Category: Canadian Business, Economic Impact
  • Air Canada has cut its second-quarter capacity by 85 to 90 per cent from same time last year.
  • Air Canada says it lost $1.05 billion in its first quarter compared with a profit of $345 million in the same quarter last year as governments imposed travel restrictions around the world due to the COVID-19 pandemic.
  • Air Canada is also accelerating the retirement of 79 older aircraft in a move that it says will simplify the airline’s fleet, reduce costs structure and lower its carbon footprint.
GM and SAIC’s China sales rebound in April as market recovers (Reuters) Published on: May 3, 2020 | Category: Economic Impact
  • General Motors’ sales in China saw double-digit year-on-year growth in April, its two local ventures said on Sunday, as the world’s biggest auto market recovers from the coronavirus.
  • To attract customers, GM and SAIC have hired social media celebrities to promote its new models and are offering free medical masks to customers.
  • China’s biggest automaker SAIC, which sold more than 6 million cars last year, said its sales rose 0.5% compared to the same period last year.
Global oil demand starts a long, painful and uncertain recovery (Toronto Star) Published on: May 3, 2020 | Category: Economic Impact
  • From the streets of San Antonio to Barcelona and Beijing, traffic data, sales at fuel stations, and pipeline flows all suggest that the slump in oil demand probably bottomed out around the middle of April, and has now started a modest — and very tentative — recovery.
  • But the recovery is extremely slow. Oil traders believe it’s likely to take more than a year, and perhaps much longer, before global demand reaches the pre-pandemic levels of roughly 100 million barrels a day.
  • The epicentre of the oil recovery is the same as where the public health crisis started in January: Wuhan. Weekday traffic in the Chinese city has almost returned to pre-crisis levels, although it remains depressed on weekends.
Profits and Pride at Stake, the Race for a Vaccine Intensifies (NY Times) Published on: May 3, 2020 | Category: Economic Impact, Global Response
  • Governments, companies and academic labs are accelerating their efforts amid geopolitical crosscurrents, questions about safety and the challenges of producing enough doses for billions of people.
  • Seven of the roughly 90 projects being pursued by governments, pharmaceutical makers, biotech innovators and academic laboratories have reached the stage of clinical trials.
  • The intensity of the global research effort is such that governments and companies are building production lines before they have anything to produce.
Reimagining Business After Coronavirus: How One Cleveland Restaurant’s Choices Ripple Through the Economy (WSJ) Published on: May 2, 2020 | Category: Canadian Business, Economic Impact
  • After coronavirus, he is fundamentally rethinking his business to have any chance of saving it in a post-lockdown world.
  • “This isn’t a restart. This is a startup,” said Mr. Bebenroth. “The model has changed so much,” he added. “It is a new company.”
  • Among the questions the 42-year-old chef is grappling with: Is the pandemic the end of passed-around hors d’oeuvres? What to do with a farm full of fancy purple asparagus?
As weather improves, questions about outdoor COVID-19 transmission risks grow (CBC) Published on: May 2, 2020 | Category: Canadian Business, Economic Impact
  • Please, go outside, says B.C.’s top doctor. Don’t go where everybody else is going, says Ontario’s.
  • Research about the likelihood of outdoor transmission of the new coronavirus is virtually non-existent.
  • While evidence about outdoor transmission of the virus is lacking, research “has consistently shown that transmission is strongly dependent on being in close proximity to a sick person for some period of time,” says the National Collaborating Centre for Environmental Health, a Vancouver-based team of researchers funded by the Public Health Agency of Canada.
Coronavirus Prompts Biggest U.S. Manufacturing Pullback Since Last Recession (WSJ) Published on: May 1, 2020 | Category: Economic Impact
  • The Institute for Supply Management said Friday its manufacturing index fell to 41.5% from 49.1% in March.
  • A subindex for manufacturing production fell to 27.5 in April, the lowest reading in records going back to January 1948.
  • Meanwhile, the Commerce Department reported that construction spending rose 0.9% in March from the previous month thanks to a 2.3% jump in residential construction.
The week business waved goodbye to the V-shape recovery (FT) Published on: May 1, 2020 | Category: Economic Impact
  • Remember the V-shaped recovery? Not long ago, it was the economic consensus: a short sharp shock from the pandemic followed by a rebound in the third quarter.
  • But Norwegian Air Shuttle warned this week it expected to stay in “hibernation” for the next 12 months and would only resume normal operations in 2022.
  • McDonald’s acknowledged as much this week, with chief executive Christopher Kempczinski noting that “we’re not seeing a V-shaped recovery in China”.
The 90% economy that lockdowns will leave behind (The Economist) Published on: April 30, 2020 | Category: Economic Impact, Global Response
  • Data from Womply, a firm which processes transactions on behalf of 450,000 small businesses across America, show that businesses in all sectors have lost substantial revenue.
  • The “90% economy” thus created will be, by definition, smaller than that which came before. But its strangeness will be more than a matter of size.
  • Some indication that the spending effects of a lockdown will persist even after it is over comes from Sweden.
  • Discretionary spending by Chinese consumers—the sort that goes on things economists do not see as essentials—is 40% off its level a year ago.
More than 50% of Canadian companies have lost at least one-fifth of their revenue to COVID-19, StatsCan says (CBC) Published on: April 29, 2020 | Category: Canadian Business, Economic Impact
  • Nearly one-third — 32.3 per cent — of businesses have lost 40 per cent of their revenues during the pandemic.
  • A further 21.2 per cent said revenues were down by at least 20 per cent.
  • Businesses in the accommodation and food services sector were most likely to have felt the pinch, followed by entertainment and recreation and retail trade.
  • More than 60 per cent of businesses in those parts of the economy reported losing at least one-fifth of their usual revenue.
US GDP falls 4.8% in worst economic decline since 2008 (FT) Published on: April 29, 2020 | Category: Economic Impact, Global Response
  • The blow to the American consumer, the biggest driver of US economic growth, was evident in a 7.6 per cent drop in personal consumption, which marked the biggest decline since 1980.
  • Counter-intuitively, healthcare was one of the sectors that provided the biggest drag on the economy, as hospitals stopped performing lucrative elective procedures in order to focus on dealing with coronavirus patients.
  • Some economists forecast the economy could shrink between 30 per cent and 40 per cent in the current quarter.
The iconic brands that could disappear because of coronavirus (Washington Post) Published on: April 29, 2020 | Category: Economic Impact
  • The retail industry, rife with bankruptcies and shuttered stores long before the coronavirus, is facing its biggest test yet.
  • More than 100,000 stores could disappear by the end of 2025, according to UBS.
  • “The companies with the thinnest margins are the most vulnerable,” said Hugh Ray, a bankruptcy attorney for the Dallas-based law firm McKool Smith. “The bread and butter for bankruptcy lawyers is restaurants, grocery stores, and automobile businesses with margins that are too thin to sustain much of an interruption.”
We Mapped All the Media Impacts of COVID-19 in Canada (The Canadian Journalism Project) Published on: April 29, 2020 | Category: Canadian Business, Economic Impact
  • More than 100 media outlets in Canada have made cuts in 11 provinces and territories in a six-week period, with nearly 50 community newspapers shuttering.
  • Journalists and media workers across Canada are suffering from the labour impacts, as are other sectors. Despite challenging employment conditions, they are sourcing and delivering crucial information on a protracted, history-defying news event.
Donald Trump orders meat processing plants to stay open (FT) Published on: April 29, 2020 | Category: Economic Impact, Global Response
  • Donald Trump has issued an executive order to force meat-processing factories to remain open, as concerns mount about the US food supply chain after the closure of several big plants because of Covid-19 outbreaks.
  • The US president invoked the Defense Production Act — a Korean war-era law that permits the government to compel companies to take action for national security reasons — after a spate of recent outbreaks of the virus at processing facilities raised concerns about serious food shortages.
  • Earlier on Tuesday, Trump suggested that the executive order would help shield companies from any legal liability that could arise from remaining open while they deal with coronavirus outbreaks in their plants.
Mnuchin Says Big Companies Should Apologize for Taking Small Business Loans (WSJ) Published on: April 28, 2020 | Category: Economic Impact, Leadership
  • Treasury Secretary Steven Mnuchin is seeking an apology to American taxpayers from large companies that sought coronavirus hardship funds intended for small businesses.
  • “The owners should be apologizing that they took this, not just giving the money back.”
  • Mr. Mnuchin on Tuesday rebuked companies that inappropriately tapped the roughly $660 billion in loans available through the Paycheck Protection Program and warned that they could face criminal liability if the money isn’t returned.
Which companies are most immune to the pandemic? (The Economist) Published on: April 28, 2020 | Category: Economic Impact
  • A working paper published this week by economists at the University of Hong Kong, the Chinese University of Hong Kong and the University of California, Berkeley examines which characteristics were most beneficial, and most harmful, during the stockmarket sell-off up to March 27th.
  • All else being equal, the share prices of companies with more cash, larger profits and less debt were more resilient against the pandemic.
  • Firms were also penalised for circumstances largely beyond their control. Companies owned by hedge funds, for example, fared worse than those with corporate backers.
The Federal Reserve Is Changing What It Means to Be a Central Bank (WSJ) Published on: April 27, 2020 | Category: Economic Impact, Global Response
  • By lending widely to businesses, states and cities in its effort to insulate the U.S. economy from the coronavirus pandemic, it is breaking century-old taboos about who gets money from the central bank in a crisis, on what terms, and what risks it will take about getting that money back.
  • And with large-scale purchases of U.S. Treasury securities, the Federal Reserve is stretching the boundaries for what a central bank will do to finance soaring federal debt—actions that move it deeper into political decisions it usually tries to avoid.
  • Economists project the central bank’s portfolio of bonds, loans and new programs will swell to between $8 trillion and $11 trillion from less than $4 trillion last year.
Largest US meat company warns food supply chain is breaking (FT) Published on: April 27, 2020 | Category: Economic Impact
  • The largest US meat company has warned of shortages for consumers, saying the country’s complex food chain was “breaking” as Covid-19 spreads to refrigerated packing plants.
  • Almost a third of US pork processing capacity and 14 per cent of beef capacity is now offline as the disease sweeps through the densely staffed cutting floors of packing plants, agricultural economists say.
  • On Friday, US packing plants killed 83,000 cattle, down by more than a quarter from 114,000 a year before, and 361,000 pigs, down almost 20 per cent from 449,000 a year ago the USDA reported.
Pandemic accelerates shift to meat substitutes (FT) Published on: April 26, 2020 | Category: Economic Impact
  • Plant-based alternative sales jump 200 per cent in US amid slaughterhouse closures.
  • This compares with jumps of 30 per cent and 39 per cent respectively over the same periods for fresh meat.
  • Compared with real meat, the production of plant-based protein is also more automated and less reliant on labour, so is less vulnerable to staffing shortages.
How Fed Intervention Saved Carnival (WSJ) Published on: April 26, 2020 | Category: Economic Impact, Global Response
  • That all changed on March 23 when the Federal Reserve defibrillated bond markets with an unprecedented lending program.
  • By April 1, the company had raised almost $6 billion in bond markets, paying rates far below those executives had discussed just days earlier.
  • Carnival may still founder if tourists shun cruises over the long term, and its new debt carries a far heftier price tag than previous offerings.
  • But the immediate survival of the company, which employs about 150,000 people, is no longer in question.
Investors baffled by soaring stocks in ‘monster’ depression (FT) Published on: April 25, 2020 | Category: Economic Impact, Global Response
  • The divergence between the flying stock market and the dying economy is so extreme it is leaving many analysts scrambling for explanations.
  • What was once dismissed as a mere “bear market rally” — often strong but ultimately doomed bounces that can occur in the middle of severe downturns — has now turned into a 23 per cent jump for global stocks.
  • Analysts and investors say that global efforts by central banks to soothe the financial system have been the trigger.
  • Throw in various other liquidity injections and a series of government spending packages aimed at ameliorating the effects of measures taken to contain the coronavirus outbreak, and the overall stimulus bill comes to $14tn, according to the IMF.
Congress Shovels Trillions at Virus, With No Endgame in Sight (NY Times) Published on: April 25, 2020 | Category: Economic Impact, Global Response
  • There is a growing list of detailed plans for how the federal government can bring the United States economy safely out of lockdown and back on a path to normalcy amid the coronavirus pandemic. Congress isn’t following any of them.
  • Instead, lawmakers who have spent the past two months rushing to respond to a public health and economic emergency with a series of ever-larger, taxpayer-financed spending packages appear to be locked in a reactive cycle, as the toll and financial costs of the virus mount.
  • The Congressional Budget Office said Friday that it expects economic pain from the crisis to persist for years to come, even though it believes activity will begin to rebound in the second half of the year.
Get Ready for 60-cent Loonie and Canada Downgrades, Rosenberg Warns (Bloomberg) Published on: April 24, 2020 | Category: Canadian Business, Economic Impact
  • Canada’s currency will depreciate sharply and its credit rating will suffer as the federal government is forced to “backstop everyone,” rolling out more assistance for provinces, companies and households, according to economist David Rosenberg.
  • The country is “likely facing a series of downgrades” to its AAA rating, given that the total debt in the economy is already an unprecedented 350% of GDP, he said.
  • “It will be interesting to see how a central bank that does not govern over the world’s reserve currency and a country with a massive balance-of-payments deficit will be able to have all of this largesse find its way onto the BoC balance sheet” without jeopardizing global investor confidence, he said.
Coronavirus: This is where all 50 states stand on reopening (The Mercury News) Published on: April 24, 2020 | Category: Economic Impact, Global Response
  • More than 97% of the US population is currently under a stay-at-home or shelter-in-place order as the coronavirus pandemic continues to upend life as we know it. But worries for the economy — and people’s mental health — are raising the question: When will things go back to normal?
  • This article has the latest on where states stand in their plans to reopen.
  • Alabama: Gov. Kay Ivey says the existing stay at home order will remain in effect until April 30th.
The risk of a US double-dip depression is real (FT) Published on: April 23, 2020 | Category: Economic Impact, Global Response
  • If you think one lockdown is painful enough, imagine a second.
  • Economists point out that the US is not even in a recession, which is defined as two consecutive quarters of negative growth.
  • Yet JPMorgan forecasts that the US economy will shrink by 40 per cent in the second quarter.
More Cooking, Less Shampooing: The Coronavirus Consumer Starts to Emerge (WSJ) Published on: April 23, 2020 | Category: Economic Impact
  • Consumers are cooking and cleaning more while spending less time and money on grooming and makeup, consumer-products companies say, as a picture emerges of how the coronavirus is reshaping lifestyles.
  • Procter & Gamble Co. last week said Americans were doing more laundry loads every week, washing garments after each wearing.
  • Makeup giant L’Oréal last week said the global cosmetics market was down 8% in the first quarter as consumers pull back on skin care and beauty products.
Canada Post sees ‘Christmas-level’ package volumes during COVID-19 (CityNews) Published on: April 23, 2020 | Category: Canadian Business, Economic Impact
  • The postal service says it delivered more than 1.8 million parcels to Canadians on Monday, similar to the biggest delivery days it sees during the holiday season.
  • Canada Post is advising customers to expect delays because it takes longer to process the heavy, incoming parcel volumes.
After the disease, the debt (The Economist) Published on: April 23, 2020 | Category: Economic Impact
  • To cope with the expensive legacy of the pandemic, governments will have to find the right path between stimulus and restraint
  • Public borrowing in the rich world is set to soar to levels last seen amid the rubble and smoke of 1945.
  • Across the rich world, the IMF says gross government debt will rise by $6trn, to $66trn at the end of this year, or from 105% of gdp to 122%—a greater increase than was seen in any year during the global financial crisis.
The socioeconomics of pandemics policy (Brookings) Published on: April 22, 2020 | Category: Economic Impact
  • Expansive macroeconomic policy can stimulate aggregate demand, but when social distancing is enforced, it will not stimulate production and consumption whenever this demand is satisfied through physically interactive activities.
  • Once the pandemic is over, a more profound rethinking of decisionmaking—in public policy, business, and civil society—is called for.
  • First, decisionmakers will need to supplement the current focus on economic efficiency with greater emphasis on economic resilience.
US Congress strikes $484bn deal to fund small business (FT) Published on: April 21, 2020 | Category: Economic Impact, Global Response
  • The White House and congressional leaders have reached a deal on a $484bn stimulus package that includes more than $300bn to replenish the depleted small business rescue fund.
  • In addition to $320bn for replenishing the Paycheck Protection Program — the loan programme to help US small businesses during the crisis — the bill will also include $75bn for hospitals and $25bn for expanded coronavirus testing.
  • Of the new funds to replenish PPP, $60bn will be allocated to small lenders and community-based financial institutions — a key demand from Democrats.
Several States Move to Reopen Economy as Disruptions From Coronavirus Rise (WSJ) Published on: April 21, 2020 | Category: Economic Impact
  • Attorney General William Barr says Justice Department would consider backing those who claim states’ coronavirus policies violate their rights
  • Some South Carolina retailers were open for business Tuesday, with social-distancing measures, after Republican Gov. Henry McMaster loosened restrictions put in place earlier this month.
  • In Alabama, Republican Gov. Kay Ivey said the state would have to increase testing capacity before reopening its economy.
Covid-19 will only increase automation anxiety (FT) Published on: April 21, 2020 | Category: Economic Impact
  • Furthermore, with jobless claims rising at record rates and the world economy shrinking, automation anxiety looks set to witness a revival — and with good reason. Coronavirus is likely to accelerate automation.
  • An influential study by Nir Jaimovich and Henry Siu showed that routine jobs that can easily be automated vanished with the 2008 financial crisis and didn’t come back, contributing to a jobless recovery.
  • Consumers also tend to “trade down” during a recession, opting for cheaper and less labour-intensive goods and services. For example, if US consumers switch from Whole Foods (which employs six workers per $1m of sales) to Sam’s Club (which employs two workers per $1m of sales), they increase the level of automation in the economy.
Denmark and Poland are refusing to bail out companies registered in offshore tax havens (Business Insider) Published on: April 20, 2020 | Category: Economic Impact, Global Response
  • Denmark and Poland won’t give financial aid to companies registered in offshore tax havens.
  • “Companies that seek to dodge their obligations to broader society by cutting their tax bills shouldn’t expect to get bailed out when things go wrong,” Robert Palmer, the executive director of Tax Justice UK, told Business Insider.
Doctor’s association says help from government is not enough to survive COVID-19 (CityNews) Published on: April 19, 2020 | Category: Canadian Business, Economic Impact
  • The association representing Ontario doctors says a proposal from the provincial government to offer advance payments will not be enough to keep clinics open during the COVID-19 pandemic.
  • The provincial government is offering clinics monthly payments to cover the loss of revenue from lower patient volumes and increased costs for personal protective equipment.
Disney stops paying 100,000 workers to save $500m a month (FT) Published on: April 19, 2020 | Category: Economic Impact, Global Response
  • Walt Disney will stop paying more than 100,000 employees this week, nearly half of its workforce, as the world’s biggest entertainment company tries to weather the coronavirus lockdown.
  • Suspending pay for thousands of so-called cast members will save Disney up to $500m a month across its theme parks and hotels, which have been shut in Europe and the US for almost five weeks.
  • The decision leaves Disney staff reliant on state benefits — public support that could run to hundreds of millions of dollars over coming months — even as the company protects executive bonus schemes and a $1.5bn dividend payment due in July.
Watch Out For China Buying Spree, NATO Warns (Forbes) Published on: April 18, 2020 | Category: Economic Impact, Global Response
  • Watch out for Chinese companies swooping in with buckets of cash to buy strategic stakes, or majority control in U.S. and European companies as asset prices fall due to the pandemic.
  • “The geopolitical effects of the pandemic could be significant,” said NATO Secretary-General Jens Stoltenberg in web conference of defense ministers on Wednesday.
  • “Some allies (are) more vulnerable for situations where critical infrastructure can be sold out,” he said.
Canada, U.S. extend border restrictions 30 days to control coronavirus spread (Reuters) Published on: April 18, 2020 | Category: Canadian Business, Economic Impact
  • Canada and the United States have agreed to extend border restrictions for another 30 days to help control the spread of coronavirus, Prime Minister Justin Trudeau said on Saturday.
  • Trudeau said the agreement is unchanged, and he expected shipments of medical supplies such as masks to continue to cross the border.
  • Quebec is the epicenter of Canada’s outbreak, with seniors in care homes accounting for most of the province’s 805 deaths.
US banks brace for surge in loan losses (FT) Published on: April 18, 2020 | Category: Economic Impact, Global Response
  • Big US banks made one thing clear this week: they are battening down the hatches to deal with an expected surge in loan losses as the pandemic casts serious doubts over the capacity of consumers and companies to pay their debt.
  • Loan loss charges at six big American banks reached a total of $25.4bn in the first quarter.
  • This marks a 350 per cent surge in collective provisions across Bank of America, Citigroup, JPMorgan Chase, Wells Fargo, Goldman Sachs and Morgan Stanley versus a year earlier, as charges soared to levels not seen since the financial crisis.
Seoul’s Full Cafes, Apple Store Lines Show Mass Testing Success (Bloomberg) Published on: April 18, 2020 | Category: Economic Impact, Global Response
  • While both the U.S. and South Korea confirmed their first virus cases around the same time in late January, the number of infections in the U.S. has swelled to more than 700,000 while Korea “flattened the curve” last month and cases have slowed to just over 10,000.
  • Moon’s popularity had soared in recent weeks, thanks in part to South Korea gaining global attention for its handling of the virus outbreak.
  • “We did pretty well in prevention — that’s finding the patients and taking quarantine measures — thanks to our prior experience with MERS outbreak,” said Kim Yoon, professor of health policy and management at Seoul National University’s College of Medicine, referring to the 2015 outbreak that killed 38 Koreans.
China’s economy: the risk of a second coronavirus wave (FT) Published on: April 17, 2020 | Category: Economic Impact, Global Response
  • On the same day that Chinese authorities began to relax a 77-day quarantine on Wuhan, the city that exported coronavirus across China and ultimately to every corner of the world, a small town on the country’s border with Russia was locked down for the second time in three months.
  • But now Suifenhe faces a real crisis, after Chinese nationals returning home from Russia triggered a much-feared “second wave” of infections. The city has more than 320 confirmed cases and almost 1,500 people in centralised quarantine facilities.
  • US sportswear company Nike said this week that 80 per cent of its China stores were open in cities such as Shanghai, which shows few visible signs of the pandemic.
  • Car factories in Chengdu, capital of southwestern Sichuan province, have restored operations with little disruption, other than the use of face masks and other protective gear and social distancing in the canteen.
New York Fed Leader Says U.S. Recovery Unlikely to Be Swift (WSJ) Published on: April 17, 2020 | Category: Economic Impact
  • Federal Reserve Bank of New York President John Williams said Friday that even a swift resolution to the coronavirus pandemic is unlikely to bring a fast recovery to the U.S. economy.
  • “Even as the pandemic passes, even as the restrictions are relaxed gradually over time, people may take quite a while before they are willing to get back on airplanes, on trains, or go to the theater or go to concerts or things like that,” Mr. Williams said.
  • Mr. William’s remarks came after a speech on Thursday in which he said the Fed’s effort to bolster the economy will be in place for some time to come.
U.S. airlines sitting on $10 billion owed to consumers for canceled flights, lawmakers say (Reuters) Published on: April 17, 2020 | Category: Economic Impact
  • U.S. airlines are estimated to be sitting on more than $10 billion in travel vouchers that should have been cash refunds from canceled flights, a group of senators released on Friday.
  • Many U.S. airlines are cancelling between 60% and 80% of their flights, and under federal law passengers on those flights are entitled to full refunds, Senators Ed Markey, Elizabeth Warren and Richard Blumenthal said in a statement.
  • “However, many airlines have been obfuscating this right by offering travel vouchers as the default option, requiring passengers to take burdensome steps to request refunds instead,” they said.
Could a remote-work revolution spread tech outside its clusters? (Protocol) Published on: April 17, 2020 | Category: Economic Impact
  • Champions of spreading tech opportunities into new hubs believe the coronavirus-driven shift to remote work could boost their efforts — as long as the crisis’ economic ravages don’t set them back even further.
  • About three-fourths of business executives said in a recent Gartner survey that they expected to shift some jobs to permanent remote status.
  • The trend could become part of a greater tech expansion from places like the Bay Area, Seattle, New York and Boston — the regions that attract the most venture capital funding — to areas like the Midwest and the South.
U.S. now has 22 million unemployed, wiping out a decade of job gains (Washington Post) Published on: April 17, 2020 | Category: Economic Impact, Global Response
  • More than 22 million Americans have filed for unemployment aid since President Trump declared a national emergency, a staggering loss of jobs that has wiped out a decade of employment gains and pushed families to line up at food banks as they await government help.
  • Layoffs are mounting in nearly every sector as businesses have been forced to close in an effort to stem the spread of covid-19.
  • The Small Business Administration stopped accepting loan applications on Thursday after it ran out of funds for a key program that is supposed to help businesses stay afloat and retain workers.
Tracking covid-19 excess deaths across countries (The Economist) Published on: April 16, 2020 | Category: Economic Impact, Global Response
  • In many places, official daily figures exclude anybody who did not die in hospital or who did not test positive.
  • The best way to measure the full damage caused by such a medical crisis is to look at “excess mortality”: the gap between the total number of people who died from any cause during a given period, and the historical average for the same place and time of year.
  • This suggests that the true toll was about 120% higher.
Food banks’ demand surges amid COVID-19. Now they worry about long-term pressures (Global News) Published on: April 15, 2020 | Category: Canadian Business, Economic Impact
  • The use of food banks increased 28 per cent across the country during the Great Recession, according to Food Banks Canada CEO Chris Hatch — and in just in the last few weeks of the COVID-19 pandemic, demand jumped 20 per cent on average.
  • As the spread of COVID-19 forces businesses to close and lay off employees, Hatch projected demand at the 3,000 food agencies his organization represents could surge to 30 or even 40 per cent from pre-pandemic levels, which averaged 1.1 million visits per month.
Coronavirus Fight Is Creating Mountains of Global Debt (WSJ) Published on: April 15, 2020 | Category: Economic Impact
  • Already, global authorities have announced emergency efforts totaling almost $8 trillion in direct spending, loans and loan guarantees, the International Monetary Fund (IMF) said on Wednesday.
  • That is roughly 9.5% of global output, according to Vitor Gaspar, the IMF’s fiscal-affairs director.
  • The IMF expects the world’s gross fiscal debt will grow to 96.4% of GDP this year from 83.3% in 2019. In advanced economies, it will grow even more: to 122.4% from 105.2%, the IMF said.
Leaked CDC and FEMA plan warns of ‘significant risk of resurgence of the virus’ with phased reopening (Washington Post) Published on: April 15, 2020 | Category: Economic Impact, Global Response, Leadership
  • A draft national strategy to reopen the country in phases, developed by the Federal Emergency Management Agency and the Centers for Disease Control and Prevention, emphasizes that even a cautious and phased approach “will entail a significant risk of resurgence of the virus.”
  • The framework lays out criteria that should be in place before a region can responsibly ease guidelines related to public gatherings: a “genuinely low” number of cases; a “well functioning” monitoring system capable of “promptly detecting” spikes of infections; a public health system able to react robustly to new cases and local health systems that have enough inpatient beds to rapidly scale up in the event of a surge in cases.
  • Reading the 10-page executive summary of the proposed public health response offers a window into the discussions happening inside the government about how to practically and responsibly ease toward reopening.
  • For example, the document says the first priority should be reopening places where children are cared for – including K-12 schools, day cares and summer camps – so parents can return to work.
Real-time economic data shows Canada frozen in time (The Logic) Published on: April 15, 2020 | Category: Canadian Business, Economic Impact
  • To capture the state of Canada’s economy today, The Logic compiled real-time data that shows a country fundamentally transformed.
  • Toronto Pearson International Airport has seen a rapid decline in airplane departures, dropping 87 per cent between March 3 and April 13, from 597 departures in one day to 79.
  • In total, 9.64 million Canadians are now actively online during the workday, a 110 per cent increase from the typical 4.6 million pre COVID-19, according to Wi-Fi analytics firm Plume.
There’s Been a Spike in People Dying at Home in Several Cities. That Suggests Coronavirus Deaths Are Higher Than Reported. (Pro Publica) Published on: April 14, 2020 | Category: Economic Impact
  • Coronavirus death counts are based on positive tests and driven by hospital deaths.li>But data from major metropolitan areas shows a spike in at-home deaths, prompting one expert to say current numbers were just “the tip of the iceberg.”
  • As of Tuesday afternoon, the United States had logged more than 592,000 cases of COVID-19 and more than 24,000 deaths, the most in the world, according to the Center for Systems Science and Engineering at Johns Hopkins University.
  • The official COVID-19 death count may, at least for now, be missing fatalities that are occurring outside of hospitals, data and interviews show.
  • Some state officials told ProPublica it would take weeks to provide complete death numbers because of thin staffing or antiquated computer systems.
Is Zoom’s breakout moment with individuals creating additional revenue for the company? (Cardify) Published on: April 14, 2020 | Category: Canadian Business, Economic Impact
  • Over the past few months, few companies have received as much attention and scrutiny as Zoom.
  • While it’s still early, we’ve seen a sharp increase in Zoom subscriptions on personal (not corporate) credit and debit cards.
  • The increase coincides with statewide stay-at-home orders across the country, with every state exhibiting a nearly identical pattern.
Markets and economists are still too upbeat on coronavirus (FT) Published on: April 14, 2020 | Category: Economic Impact, Global Response
  • The gap between the relatively quick V-shaped recovery that some economists and many market participants predict, and grim coronavirus-driven realities on the ground has narrowed.
  • Economists initially — and over-optimistically — embraced the idea of a quick second-quarter recovery after a sharp contraction in the first quarter.
  • Big companies lack visibility on what lies ahead, and are suspending guidance on earnings — a phenomenon that will increase during the first-quarter reporting season.
The future is not what it used to be: Thoughts on the shape of the next normal (McKinsey) Published on: April 14, 2020 | Category: Economic Impact, Global Response, Leadership
  • For some organizations, near-term survival is the only agenda item. Others are peering through the fog of uncertainty, thinking about how to position themselves once the crisis has passed and things return to normal.
  • Even before COVID-19 hit, there were signs of unease, expressed in calls for protectionism and more restrictive immigration and visa policies.
  • McKinsey research on the 2008 financial crisis found that a small group of companies in each sector outperformed their peers.
How Coronavirus Spread Through Corporate America (WSJ) Published on: April 13, 2020 | Category: Economic Impact
  • A by-the-numbers look at the outbreak’s economic toll in terms of guidance withdrawn, dividends cut, buybacks scrapped and workers furloughed.
  • Almost 300 companies withdrew their financial guidance. About 175 companies suspended stock buybacks or cut their dividend.
  • As companies closed stores or reduced services, they rushed to draw down existing credit lines or take out new ones. Nearly 260 companies did one of those things in the past month, adding almost $221 billion in new debt.
Recovery in Chinese trade far from sight as global outlook dims (Straits Times) Published on: April 13, 2020 | Category: Economic Impact
  • The contraction in China’s foreign trade is set to continue through the second quarter, as global demand remains depressed by measures to curb the ongoing coronavirus outbreak.
  • China’s shipments plateaued in 2019 due to the trade war with the US and slowing global growth, and the virus outbreak then caused the weakest start for any year since 2012 with exports dropping 17.2 per cent from a year earlier in the first two months.
  • “If China’s major export markets including the EU and the US suffered in the second quarter due to the pandemic, it’s very likely that China’s exports will be hit hard during the period,” said Betty Wang, senior economist at Australia & New Zealand Banking Group in Hong Kong.
Steering Through the Next Cycle (Oliver Wyman) Published on: April 12, 2020 | Category: Canadian Business, Economic Impact
  • This year’s report sketches out three alternative scenarios for the evolution of the pandemic and its economic impacts, ranging from a rapid rebound to a deep global recession, and assesses the implications for wholesale banks over the medium term.
  • The combination of lower revenues and elevated credit losses could drive earnings down by 100 percent in our central case to over 250 percent in our deep global recession scenario.
  • The industry has built extensive capital and liquidity buffers to withstand this kind of stress event, putting them in a position to play an important role as shock absorber for the economy.
Walmart CEO says we’re in the ‘hair color’ phase of panic buying (CNN) Published on: April 11, 2020 | Category: Economic Impact
  • First went the hand sanitizer, disinfectants and toilet paper. Now hair clippers and hair dye are flying off shelves.
  • The first wave of heightened shopping showed consumers were buying up various means to protect themselves as the virus spread in the United States — masks, cleaning products and hand sanitizers.
  • Sales of hair clippers increased 166% and hair coloring products rose 23%, from the same period a year earlier, according to Nielsen.
Electricity prices slump as businesses close across the US (FT) Published on: April 11, 2020 | Category: Economic Impact
  • The coronavirus pandemic has led to a sell-off in wholesale US electricity markets as closed restaurants and office buildings, and idled factories, lead to lower power use.
  • The state’s grid operator on Thursday said daily energy use had fallen nearly 8 per cent from late March, even adjusting for the effects of weather.
  • While it typically jumps early in the morning as people rush to work or school, now it is picking up gradually, according to analysis by the Electric Power Research Institute.
How the Virus Transformed the Way Americans Spend Their Money (NY Times) Published on: April 11, 2020 | Category: Canadian Business, Economic Impact
  • In recent weeks, more than 16 million workers in the country have filed for unemployment. And with no end to the outbreak in sight, consumer spending is likely to be fundamentally different for many months to come.
  • In a 7-day period that ended on March 18, grocery sales were up 79 percent from the previous year.
  • Spending on video game companies like Twitch and Nintendo is booming, and streaming services, including Netflix and Spotify, are enjoying gains as well.
Boeing Taps Investment Banks as It Weighs Government Aid (WSJ) Published on: April 10, 2020 | Category: Economic Impact
  • Boeing Co. has tapped investment banks for help securing a financial lifeline after the coronavirus pandemic grounded most of the world’s flights and deepened the aerospace giant’s troubles.
  • Boeing Chief Executive David Calhoun has balked at the idea of giving the U.S. government an equity stake as part of a deal, a possibility the stimulus bill envisions.
  • One possibility: Boeing could apply for the Treasury to buy a few billion dollars worth of its bonds and secure the rest of what it needs privately, perhaps from buyout firms or other well-heeled investors.
The post-pandemic question: when this ends, how do we get our country back? (CBC) Published on: April 10, 2020 | Category: Canadian Business, Economic Impact
  • Our relative success in navigating the ‘new normal’ will be measured by how quickly we can return to something like the old normal, and how much pain we might endure on the way to getting there.
  • Current measures to shut down most of the Canadian economy and calls to practice physical distancing will remain in place until the first wave has passed.
  • But 3,598 Canadians were killed at Vimy Ridge. We might consider ourselves lucky if only that many die as a result of COVID-19.
Japan to Fund Firms to Shift Production Out of China (Bloomberg) Published on: April 9, 2020 | Category: Economic Impact, Global Response
  • Japan has earmarked $2.2 billion of its record economic stimulus package to help its manufacturers shift production out of China as the coronavirus disrupts supply chains between the major trading partners.
  • China is Japan’s biggest trading partner under normal circumstances, but imports from China slumped by almost half in February as the disease shuttered factories, in turn starving Japanese manufacturers of necessary components.
  • The government’s panel on future investment last month discussed the need for manufacturing of high-added value products to be shifted back to Japan, and for production of other goods to be diversified across Southeast Asia.
How the covid-19 pandemic is changing Americans’ spending habits (The Economist) Published on: April 9, 2020 | Category: Economic Impact
  • A stockpiling splurge in early March has given way to penny-pinching.
  • Today, with stay-at-home orders in effect for 300m Americans in more than 40 states, the early rush to stock up seems to have subsided.
  • Consumers did not react uniformly to social-distancing guidelines. Households with children spent more than other households in the early days of the pandemic, but later cut back twice as fast as those without, perhaps because parents were less inclined to venture out with their kids.
  • Men seemed more reluctant than women to change their behaviour.
Europe’s Big Economies Brace for Sharpest Drop Since World War II (NY Times) Published on: April 8, 2020 | Category: Economic Impact
  • Germany and France are a harbinger of how bad it’s about to get as countries weigh the cost of coronavirus-induced lockdowns against the prospect of an extended recession.
  • France officially slid into a recession after suffering one of the worst quarterly contractions in more than 50 years.
  • For every two weeks the population remains under confinement, the economy shrinks by at least 1.5 percent, it added.
Healthcare, like banking, needs buffers to survive a shock (FT) Published on: April 7, 2020 | Category: Economic Impact, Global Response
  • Apply the lessons of the global financial crisis to make our health systems resilient.
  • Effective risk management requires an understanding of where the risk in the system resides so that the appropriate action can be taken to mitigate the risk and reduce collateral damage.
  • We are learning much the same about the inadequacy of buffers in the healthcare systems in many countries.
Container Shipping Lines Cancel Sailings to Weather Coronavirus Storm (WSJ) Published on: April 6, 2020 | Category: Economic Impact
  • Global container shipping lines have canceled more than 160 sailings over the past week as they try to maintain freight rates in the face of billions of dollars in potential losses driven by falling trade demand.
  • Sea-Intelligence estimates the biggest international carriers will see combined losses ranging from $800 million to $23 billion this year, depending on how they manage the economic impact from widespread coronavirus-driven lockdowns.
  • He predicts the pandemic will cut demand for container shipping this year by about 10% overall, about the same decline as in 2009, when the financial crisis unfolded disrupting world trade.
Some Auto Insurers Are Sending Refunds To Customers As Crash Rate Falls (NPR) Published on: April 6, 2020 | Category: Economic Impact
  • The pandemic has emptied out U.S. streets as Americans stay home to avoid spreading the coronavirus. Less driving means fewer car crashes.
  • And at least three companies have decided to pass those savings along to their customers.
  • Allstate is going to send out some $600 million in premium refunds. All 18 million drivers with Allstate auto policies will be receiving 15% of their premium, credited to their bank account, credit card or Allstate account.
Cities with strong social distancing see stronger economic recoveries (MIT Sloan Management Review) Published on: April 6, 2020 | Category: Economic Impact, Global Response
  • Critics fear social distancing edicts hurt the economy, but research on the 1918 flu pandemic reveals an aggressive response can help spur economic recovery.
  • Somewhat surprisingly perhaps, we find that areas that acted early and aggressively with non- pharmaceutical interventions do not perform worse economically, at least in the medium term — if anything, they actually come out of the pandemic stronger.
  • Lifting restrictions too early could make the economy worse by leading to a resurgence of the virus in an even more destructive pandemic.
Swiss lead way with crisis loans to small businesses (FT) Published on: April 6, 2020 | Category: Economic Impact, Global Response
  • It took Matthias Knaur only a minute or two to complete and scan the single-page form for a liquidity lifeline from the Swiss government.
  • About 30 minutes after sending it, the money was in his company’s account.
  • Switzerland unveiled its SFr20bn ($20bn) package of emergency loans to support small businesses on March 25. In its first week of operating, it disbursed more than SFr15bn to 76,034 businesses.
What top CEOs fear telling America about the coronavirus shutdown (Axios) Published on: April 6, 2020 | Category: Economic Impact
  • Top CEOs, in private conversations and pleas to President Trump, are warning of economic catastrophe if America doesn’t begin planning for a phased return to work as soon as May, corporate leaders tell Axios.
  • Several of these leaders told us they want to have a hard national conversation about tradeoffs involved in any widespread lockdowns beyond the middle of next month.
  • Business owners are asking: ‘At what point do I just lay my people off and shut down and give the landlord the key?’
Virtuous cycle (Reuters Breaking Views) Published on: April 6, 2020 | Category: Economic Impact
  • China may be hoping an illusion of economic recovery will inspire the real thing.
  • To address this insecurity, officials are pushing an alternative line of statistics that imply prosperity is just around the corner. On March 25, for example, the official Xinhua News Service claimed 88% of key agricultural enterprises had “restarted business”, that construction on 89% of key infrastructure projects had resumed, and that electricity usage had revived to 90% of pre-outbreak levels for industries like electronics and pharmaceuticals.
  • Unfortunately “restarting business” is vaguely defined. Local business publication Caixin reported in early March that many companies, pushed to restart manufacturing by officials, have turned on lights and machinery to simulate resumption – which means signs of revived energy consumption may be unreliable.
Facebook’s Road to Redemption Runs Straight Down Main Street (WSJ) Published on: April 5, 2020 | Category: Economic Impact, Global Response, Leadership
  • COO Sheryl Sandberg says past mistakes prepared social network for coronavirus response; company offers cash, tools to help mom-and-pops.
  • One-third of small businesses in America don’t have a formal web presence at all, according to Ms. Sandberg, but many of those businesses have long had a Facebook page.
  • The $100 million grant pales in comparison to a government stimulus plan, but dwarfs some of the relief efforts set up by other tech companies and many cities. Facebook will spend $40 million of that in the U.S., focused on small businesses located near 34 cities where it has operations.
Europe prepares to ease coronavirus lockdowns (FT) Published on: April 5, 2020 | Category: Economic Impact, Global Response
  • Governments across Europe have begun preparations to ease the lockdowns imposed across much of the continent to contain the coronavirus pandemic, even if restrictions that have paralysed the economy are expected to remain in force for several more weeks.
  • Angelo Borrelli, head of Italy’s Civil Protection Agency which is in charge of co-ordinating the national response to the outbreak, suggested a “phase two” of the country’s lockdown could begin next month.
  • “I don’t want to give dates, but between now and May 16 we may have further positive data that suggests we can resume activities and then start phase two,” he said.
Why America’s $1.3tn car-loan market cannot avoid a pile-up (FT) Published on: April 4, 2020 | Category: Economic Impact
  • The logic seemed to be clear: you can sleep in your car, but you cannot drive your house to work.
  • Not only are millions of people being put out of work, but governments are calling for everyone to stay at home to limit the spread of coronavirus.
  • “We have found that companies can remain in business for a while losing money, but they go out of business very quickly when they lose access to their warehouse lines of credit,” said Amy Martin, senior director at S&P Global Ratings.
Canada’s Big Six banks cut credit card interest rates to ease coronavirus impact (Reuters) Published on: April 4, 2020 | Category: Canadian Business, Economic Impact
  • Canada’s Big Six banks all said they will reduce interest rates on credit cards to provide relief to customers affected by COVID-19 pandemic.
  • Bank of Montreal said on Saturday it will temporarily reduce credit card interest rates to 10.99% for personal and small business customers receiving payment deferrals due to the outbreak.
  • Last week, Prime Minister Justin Trudeau said his government had urged banks to help alleviate the burden credit card interest rates place on Canadians.
See how your community is moving around differently due to COVID-19 (Google) Published on: April 3, 2020 | Category: Economic Impact
  • As global communities respond to COVID-19, we’ve heard from public health officials that the same type of aggregated, anonymized insights we use in products such as Google Maps could be helpful as they make critical decisions to combat COVID-19.
  • These Community Mobility Reports aim to provide insights into what has changed in response to policies aimed at combating COVID-19.
Sensing and Shaping the Post-COVID Era (BCG) Published on: April 3, 2020 | Category: Economic Impact, Leadership
  • COVID-19 and the containment polices aimed at controlling it have changed how we work and what we consume. History shows that such changes are not always temporary—crises can fundamentally reshape our beliefs and behaviors.
  • Societal crises can also have lasting effects on consumption patterns. For example, the 2003 SARS outbreak in China changed attitudes toward shopping: because many people were afraid to go outside, they turned to online retail.
  • It’s hard to predict precisely how it will shape our perspectives on society, but it’s plausible that we could see a greater focus on crisis preparedness, systems resilience, social inequality, social solidarity, and access to health care.
‘It’s going to be stark,’ Ford agrees to release COVID-19 infection modelling to public (CP24) Published on: April 2, 2020 | Category: Canadian Business, Economic Impact
  • Premier Doug Ford has reversed course on releasing Ontario’s COVID-19 modelling data, saying now that the public needs to see the data he has seen, adding “it’s going to be stark.”
  • He wouldn’t speak to the data provincial doctors will release sometime on Friday, but said it will be sobering for some.
Traffic at Walmart, Costco and Target falls for the first time in weeks as coronavirus stockpiling behavior shifts (Market Watch) Published on: April 1, 2020 | Category: Economic Impact
  • Traffic at Walmart Inc., Costco Wholesale Corp. and Target Corp. dropped for the first time in the weeks since the coronavirus pandemic ramped up in the U.S., according to Placer.ai.
  • Shopper traffic could climb again, though social distancing and e-commerce may keep consumers away from stores.
Start-Ups Are Pummeled in the ‘Great Unwinding’ (NY Times) Published on: April 1, 2020 | Category: Economic Impact
  • After a crush of travel cancellations in March, WanderJaunt, a short-term home rental start-up in San Francisco, laid off 56 of its 240 employees last week.
  • And at ClassPass, which offers a membership program for fitness classes, over 95 percent of revenue evaporated in just 10 days as studios and gyms around the world shut down.
  • Airbnb, the home rental start-up valued at $31 billion, has stopped hiring and has suspended $800 million of marketing.
China is using digital coupons to entice people to get shopping again (Quartz) Published on: April 1, 2020 | Category: Economic Impact, Global Response
  • One of the key ways China is incentivizing people is through the use of digital coupons, which are issued by some local governments and delivered to users via third-party platforms such as payment app Alipay and WeChat pay.
  • Residents log in to the apps to redeem the coupons, which can be used for dining, shopping, and travel within a short period of time.
  • In February, China’s car sales plunged 79% from a year earlier, the biggest-ever monthly decline. A gauge of factory activity in March unexpectedly rebounded into positive territory after an abysmal performance the previous month, but officials warned that the data should not be seen as a sign of economic stabilization.
Canada’s next-door neighbour is now the epicentre of global pandemic. Here’s what that U.S. surge means (CBC) Published on: March 31, 2020 | Category: Canadian Business, Economic Impact
  • When asked Monday about the travel restrictions on Canada and Europe, Trump acknowledged they would likely also remain in place at least until April 30: “The guidelines will be very much as they are.”
  • One epidemiologist and public-health specialist who checked the totals Monday estimated that the rate of infections was, in fact, about 2.9 times higher in the U.S. than in Canada.
  • That evaporation of American incomes would further batter Canada’s economy, given that three-quarters of Canada’s international exports go to the U.S.
Ex dividend (Reuters Breaking Views) Published on: March 30, 2020 | Category: Canadian Business, Economic Impact
  • Carmaker Ford Motor, fashion retailer H&M and UniCredit, the Italian bank, are among those that have cancelled or suspended their payouts in the last few weeks.
  • Official restrictions are partly to blame. The European Central Bank on Friday urged lenders it regulates to halt dividends and conserve capital.
  • Nevertheless, a dividend drought will put pressure on income-dependent investors, like pension funds, which tend to rely on the regular income to meet their obligations.
After pandemic ends, U.S. needs Recovery Authority to speed economic rebound (USA Today) Published on: March 30, 2020 | Category: Economic Impact, Global Response
  • Cutting red tape in health care has unleashed waves of energy and ingenuity to deal with the COVID-19 crisis.
  • Once the crisis is under control, the same kind of energy and resourcefulness will be needed to get America’s schools, businesses, government agencies and nonprofits up and running again.
  • What’s needed is a temporary Recovery Authority with a broad mandate to identify and waive unnecessary bureaucratic hurdles to recovery.
Leaked memo from Delta reveals plans to cut worker hours and pay, despite protections in the coronavirus stimulus package. United and other airlines are doing the same. (Business Insider) Published on: March 30, 2020 | Category: Economic Impact, Global Response
  • Despite the payroll grants offered to airlines in the coronavirus stimulus package, airline workers at Delta, American, United, Southwest, and others will, in practice, take home less money than they had before.
  • The Coronavirus Aid, Relief, and Economic Security Act, or “CARES” Act – offered $58 billion in aid to airlines, split into two parts. Up to $29 billion in loans for air carriers is available, and an additional $29 billion in payroll grants.
  • Both the loans and the grants mandate that companies accepting them not reduce workforces until after September 30, 2020 – in effect, the mandate prohibits involuntary job cuts.
Urgent Demand for Medical Equipment Is Making Air Cargo Fees ‘Absolutely Crazy’ (Bloomberg) Published on: March 30, 2020 | Category: Canadian Business, Economic Impact
  • Urgent demand for medical equipment to fight the coronavirus has sent the cost of chartering aircraft skyrocketing and turned a typically humdrum process into an ultra-competitive auction.
  • “Chartered prices have been pushed up from less than $300,000 four to six weeks back to $600,000 to $800,000 in the last few days,” Anthony Lau, chairman and founder of logistics company Pacific Air (HK) Ltd., said in an interview Friday.
  • The likes of Cathay Pacific Airways Ltd., Korean Air Lines Co. and American Airlines Group Inc. are hauling a greater amount of goods in the bellies of their passenger planes to keep up with demand. Cargo rates have risen over 10% in recent weeks.
Fauci predicts millions of coronavirus cases in US, and more than 100,000 deaths (Boston Globe) Published on: March 29, 2020 | Category: Economic Impact, Global Response
  • The coronavirus outbreak could kill 100,000 to 200,000 Americans, the US government’s top infectious-disease expert warned on Sunday, as smoldering hotspots in nursing homes and a growing list of stricken cities heightened the sense of dread across the country.
  • But spikes in infections were recorded around the country, not only in metropolitan areas but in Midwestern towns and Rocky Mountain ski havens.
  • “This is not going to get better soon,” New York Governor Andrew Cuomo said.
America’s Make-or-Break Week (WSJ) Published on: March 29, 2020 | Category: Economic Impact
  • The decisions they make this week could shape how deeply the economy is damaged by the coronavirus pandemic.
  • “Rent is due. Utilities are due. Credit card bills are due April 1.”
  • An estimated $20 billion in monthly retail real estate loans are due as early as this week, according to Marcus & Millichap, a commercial real-estate services and consulting firm.
  • Many retailers and restaurants have said they are not going to pay their April rents, which in turn poses a threat to the $3 trillion commercial mortgage market.
Microsoft: Cloud services demand up 775 percent; prioritization rules in place due to COVID-19 (ZDNet) Published on: March 29, 2020 | Category: Canadian Business, Economic Impact
  • Microsoft is sharing more guidance around capacity limits it is putting in place for its cloud resources caused by higher-than-usual demand due to the coronavirus pandemic.
  • Microsoft officials say the company has seen a 775 per cent increase in demand for its cloud services in regions enforcing social distancing and/or shelter-in place due to the COVID-19 coronavirus.
  • Last week, officials acknowledged the company has been throttling some “non-essential” Office 365 services so as to continue to meet demand.
Big companies raise record sums from bond market in dash for cash (FT) Published on: March 29, 2020 | Category: Economic Impact, Global Response
  • Global corporate bond issuance by “investment grade” companies has surged to $244bn so far in March, the highest monthly total since a record $252bn was sold in September, according to Dealogic.
  • Adding in a raft of new bank bond sales from the likes of Wells Fargo and Goldman Sachs takes the global tally to $408bn this month, separate data from Refinitiv showed.
  • Analysts warn that despite higher-rated companies bolstering their cash piles, rising corporate defaults could still ricochet through the economy. Around $9tn of outstanding corporate debt has built up over the past decade while borrowing costs have been low.
Canada ‘very concerned’ with OPEC’s decisions amid coronavirus outbreak: Trudeau (Global News) Published on: March 28, 2020 | Category: Canadian Business, Economic Impact
  • Prime Minister Justin Trudeau said Canada is “very concerned” with the Organization of the Petroleum Exporting Countries’ (OPEC) decisions amid the novel coronavirus outbreak, but that the government remains focused on helping Canadians struggling as a result of the dramatic drop in oil prices.
  • The price of oil sank nearly 20 per cent in early March after Russia refused to roll back production in response to falling demand and OPEC member Saudi Arabia signalled it will ramp up its own output.
  • The price of Western Canadian Select for crude fell below $5 USD a barrel on Friday, as demand during the COVID-19 outbreak continued to drop.
Bank of Canada ventures into uncharted territory to fight coronavirus fallout (Financial Post) Published on: March 27, 2020 | Category: Canadian Business, Economic Impact
  • Along with the interest-rate cut, the central bank said it will begin buying at least $5 billion worth of government bonds per week until the economy turns around.
  • The Bank of Canada’s trading desk has been watching markets for government bonds, mortgage-backed securities, and short-term business loans become increasingly rigid as lenders attach severe risk premiums to the interest rates they charge in normal times.
  • Poloz avoided arithmetical predictions about the future. He said the Bank of Canada will release its quarterly economic report on April 15.
Some U.S. Cities Could Have Coronavirus Outbreaks Worse Than Wuhan’s (NY Times) Published on: March 27, 2020 | Category: Economic Impact, Global Response
  • If its rate of growth in coronavirus cases continues, the New York City metropolitan area will suffer a more severe outbreak than those experienced in Wuhan, China, or the Lombardy region of Italy.
  • But as an epidemic progresses, the number of cases per capita can provide a good measure of the prevalence of coronavirus in a community.
  • By this measure, the situation in New York does not appear promising. The rate of increase in cases is far higher than it was in Wuhan or Lombardy, once they had reached similar numbers of cases.
  • Other metropolitan areas, like Detroit and New Orleans, stand out as places where a coronavirus outbreak might escalate quickly without preventive measures.
New Rochelle, Once a Coronavirus Hot Spot, May Now Offer Hope (NY Times) Published on: March 27, 2020 | Category: Economic Impact, Global Response
  • “Everybody talks about flattening the curve, and I think that’s exactly what we were able to do,” a health official said.
  • The state took drastic measures that stirred a backlash, including creating a containment zone. But now, the latest data indicates that the measures may be starting to work.
  • Over the last four days, only 38 new cases were reported to the county.
IMF chief says the global economy is already stuck in a coronavirus-fueled recession — and only a coordinated worldwide effort will save it (Business Insider) Published on: March 27, 2020 | Category: Economic Impact
  • The global economy is stuck in an unprecedented kind of recession that necessitates international cooperation, International Monetary Fund chief Kristalina Georgieva told CNBC on Friday.
  • The international organization said last week it “stands ready” to use its $1 trillion credit capacity to aid countries strapped for cash amid the outbreak.
  • “We’ve never seen the world economy standing still. Now we do,” she said. “How we go about revitalizing it is another important topic.”
Allianz liquidates two hedge funds after losses (FT) Published on: March 27, 2020 | Category: Economic Impact
  • Allianz Global Investors, the asset management group owned by Germany’s largest insurance group, is liquidating two hedge funds that suffered huge losses during the March market rout.
  • Initially the hedge fund industry was resilient as coronavirus spread and market volatility rose. The average hedge fund lost just 1.4 per cent in February, according to Hedge Fund Research.
  • But as the turmoil deepened and market liquidity declined in many areas, some popular and previously reliable trades went awry. Hedge funds were now down 8.6 per cent in March, and nearly 10 per cent for the year.
Canada can ignore drug, device patents during outbreak under new law (Reuters) Published on: March 26, 2020 | Category: Canadian Business, Economic Impact
  • Canada’s emergency legislation on the coronavirus crisis gives the health minister powers to circumvent patent law and ensure medical supplies, medication or vaccines can be produced locally.
  • Ventilators could be the legislation’s first target, pharmaceutical consultancy PDCI Market Access said in a note to clients.
  • Canada’s main pharmaceutical lobby group, Innovative Medicines Canada, said it was concerned that the legislation did not require the government to check in with the original manufacturer to see what it can supply before authorizing others to step in.
China goes back to work (The Economist) Published on: March 26, 2020 | Category: Economic Impact, Global Response
  • Measures aimed at preventing another surge of covid-19 have added to the complexities of manufacturing in China. The German manager of an optical-wire factory in Jiangsu province has divided his workers into ten separate units to minimise the risk of cross-infections. The units are kept apart from each other in the factory, the canteen and their dormitories.
  • Nevertheless, on the supply side, the overall picture is encouraging. Large companies report that they are fully operational.
  • Resuscitating demand is proving more difficult. It involves two things that are harder for the government to manage: global growth and public anxiety about the disease.
  • State-owned firms account for about three-quarters of corporate debt in China. The government need not spell out that it stands behind them. Investors know that.
The Coronavirus War Economy Will Change the World (Foreign Policy) Published on: March 26, 2020 | Category: Economic Impact, Global Response
  • There are models less reliant on the private sector than the DPA; one important peacetime predecessor is the New Deal-era Works Progress Administration. This sort of public scheme would be able to put to work the large numbers of workers who are facing unemployment in the coming weeks and months.
  • As one financial analyst pointed out, “lockdown economics” is in many ways the exact opposite of the wartime economics of total mobilization.
  • But this is not a problem of prioritizing expenditures or limited resources. The issue is sustaining circulation. In the short run, the demands of disease prevention (quarantine measures) and care (hospitalization) will put the livelihood of those dependent on other forms of capitalist production at risk. Only massive government intervention to protect the channels of economic circulation can resolve this tension in a way that does not sacrifice the former for the latter.
  • Despite being framed as exceptional wartime or postwar measures, many provisions rapidly became entrenched.
  • There is no precedent for the asymmetric mix of mobilization and demobilization of labor that we are witnessing right now.
Canada doubles value of coronavirus stimulus package, promises cash, loan delays (Reuters) Published on: March 26, 2020 | Category: Canadian Business, Economic Impact
  • Canada has almost doubled the value of an aid package to help people and businesses deal with losses from the coronavirus outbreak, with Ottawa handing out more money than forecast, Finance Minister Bill Morneau said on Wednesday.
  • A portal will be set up by April 6 for people who have lost jobs or are unable to work to apply for monthly payments, which will run for four months.
  • Sports equipment maker Bauer Hockey plans to modify its hockey visors into face shields for healthcare workers, while retailers Canada Goose Holdings, and Gap Inc said they would produce medical gear.
MPs suspend Parliament for hours after opposition rejects proposed new government powers (The Globe and Mail) Published on: March 25, 2020 | Category: Canadian Business, Economic Impact
  • Opposition parties vowed to reject Liberal government plans to authorize months of unlimited spending without Parliamentary approval, derailing efforts for quick approval of billions in support for workers and businesses.
  • The Prime Minister did not provide any specific details as to how the draft bill might be changed.
  • “We want to build in some measures that ensure that parliamentary oversight is going forward, that there are some mechanisms for Parliament to do its job,” Andrew Scheer told CTV’s Power Play early Tuesday evening as negotiations continued. “We have to be able to know there are some safety measures there on behalf of the Canadian people.”
U.S. Domestic Passenger Flights Could Virtually Shut Down, Voluntarily or by Government Order (WSJ) Published on: March 24, 2020 | Category: Economic Impact, Global Response
  • Major U.S. airlines are drafting plans for a potential voluntary shutdown of virtually all passenger flights across the U.S., according to industry and federal officials.
  • Government agencies also consider ordering such a move as the nation’s air-traffic control system continues to be ravaged by the coronavirus contagion.
  • Airlines are preparing for the possibility that contagion-driven staffing emergencies at air-traffic control facilities could force the issue, making it impossible to continue operating in parts of the country.
  • Another option to keep cargo shipments flowing would be a White House decision to call up portions of what is called the Civil Reserve Air Fleet, essentially commercial jets designated to help the Pentagon with logistics and other needs during national emergencies.
Trump Considers Reopening Economy, Over Health Experts’ Objections (NY Times) Published on: March 24, 2020 | Category: Economic Impact, Global Response
  • Officials have said the federal government’s initial 15-day period for social distancing is vital to slowing the spread of the virus, which has already infected more than 40,000 people in the United States.
  • Any push to loosen the new limits on commerce and movement would contradict the consensus advice of public health officials, risking a surge in infections and deaths from the virus.
  • The recent rise of cases in Hong Kong, after there had been an easing of the spread of the virus, is something of an object lesson about how ending strict measures too soon can have dangerous consequences.
The Impact Of Coronavirus On Global Activity (FitBit) Published on: March 23, 2020 | Category: Economic Impact
  • As the COVID-19 pandemic continues to evolve, it’s had a major impact on physical activity levels for our 30 million plus active Fitbit users around the globe.
  • The severity of the decline in steps varied from country to country, with European countries showing a more dramatic change, ranging from a 7% to 38% decline in step counts during the week ending March 22, 2020.
  • There are also reasons for optimism, as you can see that step counts are starting to rise again in China, Japan, and Hong Kong.
Negotiations falter over $2tn US stimulus deal (FT) Published on: March 23, 2020 | Category: Economic Impact
  • The Trump administration and congressional leaders struggled to reach a deal on fiscal stimulus measures worth nearly $2tn to help the US weather the coronavirus pandemic, leaving the fate of the package up in the air as jittery markets opened around the world.
  • The negotiations hit an impasse on Sunday after Democrats on Capitol Hill objected that the proposed deal offered big business an overly generous bailout with limited conditions and scant oversight.
  • They also argued it would not release enough new funds to hospitals.
Dow futures plunge as coronavirus slams market, Fed official warns unemployment could hit 30% (Market Watch) Published on: March 23, 2020 | Category: Economic Impact
  • U.S. stock-index futures fell by the most allowable for the day Sunday evening as the cases of coronavirus globally neared 330,000 and the market appeared unhappy with a lack of government action to address the current and expected fallout from the COVID-19 pandemic.
  • On top of that, a U.S. central bank official estimated that the unemployment rate could surge from just over 3% to 30% at its peak as businesses shutter in an effort to clamp down on the spread of the deadly illness.
Denmark’s Idea Could Help the World Avoid a Great Depression (The Atlantic) Published on: March 21, 2020 | Category: Economic Impact, Global Response
  • This week, the Danish government told private companies hit by the effects of the pandemic that it would pay 75 percent of their employees’ salaries to avoid mass layoffs.
  • The plan could require the government to spend as much as 13 percent of the national economy in three months.
  • The philosophy here is that the government wants companies to preserve their relationship with their workers. It’s going to be harder to have a strong recovery if companies have to spend time hiring back workers that have been fired.
Coronavirus and Politicians vs. the Economy (Cato Institute) Published on: March 20, 2020 | Category: Economic Impact
  • The government does not have enough money to keep the economy afloat until a vaccine arrives, maybe a year from now.
  • The nation’s 130 million private‐​sector workers would have generated $16 trillion of income this year.
  • Consider a scenario where half of private‐​sector workers are idled for three months. That would lose the economy $2 trillion of income.
Volvo back to ‘normal’ in China as it shuts EU and US car plants (FT) Published on: March 20, 2020 | Category: Economic Impact, Global Response
  • Volvo Cars said its Chinese business had returned to “normal”, offering a ray of hope to European and US carmakers that have shuttered operations in the face of the global coronavirus pandemic.
  • Carmakers have in the past week announced the closures of every large European plant and more than 100 facilities across North and South America in a wave of measures to impede the spread of the virus.
  • “We need to plan for normality after Easter, to give people a light at the end of the tunnel,” said Mr Samuelsson. “Let’s hope that will be the case. Continuing to Christmas would be a disaster.”
To solve the economic crisis, we will have to solve the health-care crisis (Washington Post) Published on: March 20, 2020 | Category: Economic Impact, Global Response
  • This is not an economic crisis; it is a health-care crisis.
  • In an economic crisis, you could imagine a situation in which people lose their jobs and are unable to spend money.
  • In these conditions, cash to consumers cannot jump-start consumption. Relief to producers will not jump-start production.
  • The federal government should announce a Manhattan Project-style public-private partnership to find and produce a vaccine.
Is It Time to Rethink Globalized Supply Chains? (MIT Sloan Management Review) Published on: March 19, 2020 | Category: Economic Impact, Leadership
  • The COVID-19 pandemic should be a wake-up call for managers and prompt them to consider actions that will improve their resilience to future shocks.
  • The transformation of supply chains to global multistage production networks took place in a benign environment of falling trade barriers and an implicit willingness to accept increasing interdependence and the associated risks.
  • Over the past decade, we have had a number of black swan events. Although such occurrences are supposed to be exceedingly rare, in the past decade we have had several of them: the introduction by China of export quotas on rare earth elements in 2010; the 2011 Tohōku East Japan earthquake and tsunami; the flooding in Thailand later that year; the U.S.-China trade war; and now the coronavirus contagion.
ECB to launch €750bn bond-buying programme (FT) Published on: March 19, 2020 | Category: Economic Impact, Global Response
  • Pandemic Emergency Purchase Programme will cover sovereign and corporate debt.
  • The ECB also decided to expand the range of assets eligible for purchase to non-financial commercial paper and to ease its collateral standards to allow banks to raise money against more of their assets, including corporate finance claims.
  • Another option for the ECB to repair market confidence would be to lift its self-imposed limits to not buy more than a third of the eligible sovereign bonds of any single country and to purchase sovereign bonds in proportion to the weight of each country’s investment in its capital.
  • The latest €750bn package comes on top of last week’s €120bn extra purchases and means the ECB will buy more than €1tn of bonds in the next nine months — its highest ever pace of purchases.
GM, Ford and FCA shutter all North American factories over coronavirus fears (TechCrunch) Published on: March 18, 2020 | Category: Economic Impact, Global Response
  • Detroit’s big three automakers are to shut down all factories due to fears over the coronavirus.
  • Over the last few days, United Auto Workers has been pushing the automakers to shut down their factories over concerns of worker safety.
  • Early today, Honda announced it was pausing all operations at its 12 North American factories, including transmission and engine plants in Ohio, Indiana, Alabama, Canada and Mexico. Ford and GM followed several hours later. Now, in the afternoon, FCA also decided to close its factories.
Plight of Retail Workers: ‘I’m Scared to Go to Work’ (NY Times) Published on: March 18, 2020 | Category: Economic Impact, Global Response, Leadership
  • Dozens of employees staffed the cash registers, cosmetics counter and shoe department. Many were frightened. Three days before, the company said that a worker at the store had tested positive for the coronavirus.
  • The retail industry has endured a recent raft of bankruptcies and closures, as well as the pressure of new tariffs in the past year. It makes the prospect of losing weeks of business to the coronavirus even more chilling for many stores.
  • The Retail Industry Leaders Association, an industry trade group, has been urging state and local officials to not unilaterally declare most of retail, outside of grocery stores and pharmacies, as nonessential. The group said officials should first consult with retailers before ordering stores to close.
How covid-19 is interrupting children’s education (The Economist) Published on: March 18, 2020 | Category: Economic Impact
  • Almost a billion children have seen their schools close.
  • In 2013 Britain’s Health Protection Agency looked at flu outbreaks that coincided with school closures. It found that shutting them slowed the transmission of the virus, even if it also slowed the transmission of knowledge.
  • For poor children, schools may provide the most nutritious meal of the day. Around 26m children in American schools—roughly half of all students—qualify for free or reduced-price lunches.
France ready to nationalise virus-stricken companies (FT) Published on: March 17, 2020 | Category: Economic Impact, Global Response
  • France has rolled out an emergency €45bn rescue package for its coronavirus-stricken economy and pledged an array of possible measures, including nationalisation and an extended ban on short selling, if it needs to save important companies.
  • In addition the French state will guarantee €300bn of bank loans to businesses to ensure they do not collapse for want of liquidity, while eurozone members had collectively offered €1tn in such national guarantees.
  • France has also joined Spain, Italy and Belgium in banning the short selling of stocks to calm investors rattled by heavy price falls.
3 charts that helped change coronavirus policy in the UK and US (World Economic Forum) Published on: March 17, 2020 | Category: Economic Impact, Global Response
  • Suppression involves a combination of four interventions: social distancing of the entire population, case isolation, household quarantine and school and university closure.
  • But when these measures are relaxed, the modelling predicted cases would rise again, so interventions may need to be in place until a vaccine is developed – 18 months or longer.
  • Around three weeks after the combined interventions are introduced, the scientists predict there would be a reduction in the peak need for intensive care beds – and this would continue to decline while the policies stay in place.
  • However, once the interventions are relaxed (around September in the above chart), the infections would begin to rise again, leading to a predicted peak epidemic later in the year.
The state of the restaurant industry (OpenTable) Published on: March 17, 2020 | Category: Economic Impact
  • As the COVID-19 pandemic keeps people home and some cities, states, and countries limit restaurant operations, our community of nearly 60,000 restaurants faces unprecedented challenges.
  • We’ve summarized the data we have from the restaurants on our platform and are updating it daily.
  • This data shows year-over-year seated diners at restaurants on the OpenTable network across all channels: online reservations, phone reservations, and walk-ins.
The places a COVID-19 recession will likely hit hardest (Brookings) Published on: March 17, 2020 | Category: Economic Impact
  • As recession forecasts proliferate, it’s not necessarily true that all areas will be hit equally hard.
  • To illustrate this, we mapped the employment geography of an array of industries vulnerable to disruption by virus-related demand declines, shutdowns, and layoffs.
  • Zandi composed a list of five especially vulnerable sectors: mining, oil and gas, transportation, employment services, travel arrangements, and leisure and hospitality.
The economic policy response to COVID-19: What comes next? (Brookings) Published on: March 16, 2020 | Category: Economic Impact, Global Response
  • The federal policy response thus far has focused on public health.
  • In addition, send $1000 checks per adult to households (with an income cap that can be applied later as part of 2020 taxes) (~$200 billion) with checks for dependents of $500, which may take longer to mail (~$50 billion) due to the necessity to match dependents to households.
  • The Families First Act expands access to paid sick leave and unemployment insurance, but far more people are losing income, tips, commissions, and hours than are helped through this legislation.
  • It is increasingly clear, though, that there will be substantial economic fallout.
Amazon ramps hiring, opening 100,000 new roles to support people relying on Amazon’s service in this stressful time (Amazon) Published on: March 16, 2020 | Category: Canadian Business, Economic Impact
  • We are opening 100,000 new full and part-time positions across the U.S. in our fulfillment centers and delivery network to meet the surge in demand from people relying on Amazon’s service during this stressful time, particularly those most vulnerable to being out in public.
  • In the U.S., we will be adding an additional $2 USD per hour worked through April from our current rate of $15/hour or more, depending on the region, £2 per hour in the UK, and approximately €2 per hour in many EU countries.
  • We continue to consult with medical and health experts, and take all recommended precautions in our buildings and stores to keep people healthy.
Coronavirus is taking a brutal toll on China’s economy (Quartz) Published on: March 16, 2020 | Category: Economic Impact
  • The country clocked a 20.5% decline in retail sales for January and February compared with the same period a year before, according to China’s National Bureau of Statistics.
  • “Almost the whole February saw retail sales halted. Apart from daily necessities and food, other categories of retail goods have all been impacted hugely by the epidemic.”
  • Industrial output, an important indicator for measuring economic performance, also shrank by 13.5% for the two months, compared with a median forecast of a 3% decline from analysts polled by Bloomberg.
  • First-quarter GDP data will be out a month from now.
Most airlines face bankruptcy by end of May, industry body warns (FT) Published on: March 16, 2020 | Category: Economic Impact
  • In the past 24 hours, United Airlines of the US, IAG — parent of British Airways, Aer Lingus and Iberia — Air France-KLM, easyJet, Finnair, Air New Zealand and Aeroflot all unveiled drastic measures to cut costs after several countries, including Germany and Spain, closed their borders.
  • Willie Walsh, head of IAG, will postpone his retirement to steer the group through the health emergency.
  • “By the end of May 2020, most airlines in the world will be bankrupt. Co-ordinated government and industry action is needed — now — if catastrophe is to be avoided.”
The Implications of Hitting the Hard 0% Interest Rate Floor (Ray Dalio) Published on: March 16, 2020 | Category: Economic Impact
  • Hitting this 0% floor also means that virtually all the reserve country central banks’ interest rate stimulation tools (including cutting rates and yield curve guidance) won’t work.
  • Our biggest economic risk comes from the possibility that our elected officials (who are the ones who control fiscal policy) will handle it badly. That is because it’s tough enough to know what to do during a big crisis and then do it boldly even when there aren’t divisive politics.
  • Thus far, meaningful debt supports to industries that would go broke due to this shock have been absent (other than SBA-subsidized loans, which look to be small).
Distrust is contagious: How the coronavirus could upend America’s business relationships to China (Fortune) Published on: March 16, 2020 | Category: Economic Impact
  • The contagion is having a similarly grim effect on the U.S.-China economic relationship—where accumulated mistrust and resentment have ­created unhealthy conditions of a different kind.
  • At minimum, the chaos has prompted U.S. investors and executives to rethink the wisdom of concentrating supply lines in China and relying heavily on Chinese consumers.
  • Proponents of a more distant relationship, including some of President Trump’s top economic advisers, have seized on the contagion as proof of the dangers of doing business in a secretive, Communist-controlled economy.
Fed Takes Emergency Steps as Virus Pushes Economy Toward Recession (WSJ) Published on: March 16, 2020 | Category: Economic Impact, Global Response
  • The Fed, in a series of statements, said it would cut the federal-funds rate to a range between 0% and 0.25%, down 1 percentage point, and would buy $700 billion in Treasury and mortgage-backed securities, among other actions.
  • The Fed said it was activating with five other central banks, including the European Central Bank and the Bank of England, swap lines to smooth out disruptions in overseas dollar-funding markets, effectively encouraging foreign central banks to use existing facilities to supply dollars to their own financial systems.
  • But they say Congress will have to provide a much bigger package—perhaps on the order of $400 billion—to prevent the world’s largest economy from spiraling into a much bigger crisis.
  • Also on the table: suspension of student-loan payments, infrastructure projects and aid to state and local governments.
The Workers Who Face the Greatest Coronavirus Risk (NY Times) Published on: March 15, 2020 | Category: Economic Impact, Leadership
  • As the coronavirus continues to spread throughout the United States, people with jobs that put them in physical contact with many others are at the greatest risk of becoming sick.
  • Many people who do service jobs like cashiers and fast-food workers face elevated risks. Walmart, Starbucks and Uber are among the many companies that have had workers fall sick.
Apple Reopens All 42 China Stores After Virus Closures (Bloomberg) Published on: March 13, 2020 | Category: Economic Impact
  • Apple Inc. has reopened all 42 of its stores in China after it was forced to close them last month due to the coronavirus outbreak in the country.
  • Since shutting the stores, Apple gradually reopened them and 38 of the 42 stores were operating as of last week.
U.S. suspends travel from Europe as coronavirus forces Italy to tighten lockdown (Reuters) Published on: March 12, 2020 | Category: Economic Impact, Global Response
  • U.S. President Donald Trump said the United States will suspend all passenger travel from continental Europe on Friday to limit the spread of the coronavirus after the outbreak was formally declared a pandemic, sending global markets into a tailspin.
  • Trump’s announcement came after Italy, the worst-affected country in Europe, enacted the most severe controls on a Western nation since World War Two, shutting bars, hairdressers and restaurants along with other restrictions already in place.
  • The U.S. travel restrictions on Europe would apply from midnight on Friday, Trump said, adding that similar restrictions on travelers from China and South Korea had helped limit the spread of the virus.
The Coronavirus Customer-Service Crisis (The Atlantic) Published on: March 11, 2020 | Category: Canadian Business, Economic Impact
  • When stores are dealing with unending lines and impatient, nervous customers, workers can’t always maintain a six-foot distance from people and clean their hands regularly.
  • “The sense of frustration and helplessness is growing. It’s making it really depressing to be at work.”
  • Over the past week, Instacart has experienced demand spikes of up to 20 times its normal order volume in California and Washington, where community spread of the coronavirus has dominated news coverage.
  • As the crisis deepens, a whole gamut of customer-service workers are being pulled into the fray.
Coronavirus has disrupted supply chains for nearly 75% of U.S. companies. (Axios) Published on: March 11, 2020 | Category: Canadian Business, Economic Impact
  • Of the companies surveyed that expect supply chain impacts (80% said yes), most expect the severity of the disruptions will increase after the first quarter of this year.
  • For a majority of U.S. businesses, lead times have doubled, and that shortage is compounded by the shortage of air and ocean freight options to move product to the United States — even if they can get orders filled.
  • Manufacturers in China report operating at 50% capacity with 56% of normal staff.
Trudeau Ready to Backstop Businesses in Response to Virus (Bloomberg) Published on: March 11, 2020 | Category: Canadian Business, Economic Impact
  • Justin Trudeau announced C$1.1 billion ($800 million) in new financial measures to help mitigate the effects of the widening coronavirus outbreak in Canada, adding he’s prepared to use federal financing agencies to stimulate the economy further if needed.
  • The prime minister said Wednesday the immediate plan includes providing faster unemployment insurance benefits to people who self-isolate, more funding for coronavirus research and financial assistance to provinces for medical supplies.
Coronavirus fallout: Bank of England launches 4 key measures (FT) Published on: March 11, 2020 | Category: Economic Impact, Global Response
  • The Monetary Policy Committee voted unanimously to reduce its benchmark interest rate by 50 basis points to 0.25 per cent, equalling its lowest levelsince the second world war.
  • The Term Funding scheme for Small and Medium-sized Enterprises (TFSME) offers funding at interest rates at, or very close to, the benchmark rate. It is expected to last one year and to provide in excess of £100bn in funding.
  • The last measure came from the BoE’s Prudential Regulation Authority, which laid out an expectation that banks should not use any funds freed up by the other measures to increase dividends or bonuses.
New trade barriers could hamper the supply of masks and medicines (The Economist) Published on: March 11, 2020 | Category: Economic Impact, Global Response
  • Some governments are erecting trade barriers to safeguard their supplies.
  • On March 3rd France’s president, Emmanuel Macron, announced that the state would seize all masks, restricting sales abroad.
  • Despite calls from the WHO for countries to work together to ease the problem, this is proving difficult even within a close-knit trading bloc like the EU.
Coronavirus updates: New York sets up containment zone, Australia bans travel to Italy (CNET) Published on: March 11, 2020 | Category: Economic Impact, Global Response
  • An area of New York state has been designated a containment zone, Australia bans travel to Italy and the EU wants to set up a fund to address the outbreak.
  • The zone falls within “a 1 mile radius around the site of the most cases in New Rochelle,” Cuomo said on Twitter, adding that the city has the “biggest cluster of coronavirus cases in the state.”
  • King County, home to Seattle, has confirmed 33 new cases of coronavirus and three more deaths, bringing total deaths in the county to 20 and in the state of Washington to 22.
Coronavirus: Italy suspends mortgage payments amid lockdown (The Independent) Published on: March 10, 2020 | Category: Economic Impact, Leadership
  • Payments on mortgages are to be suspended in Italy due to the coronavirus outbreak, the country’s government has announced.
  • Giuseppe Conte, the prime minister, said that everyone in Italy would be confined to the area where they live unless they are able to demonstrate a need to work, health conditions, or other limited reasons in order to travel elsewhere.
Trump to Propose Steps to Ease Economic Fallout From Coronavirus (WSJ) Published on: March 10, 2020 | Category: Economic Impact, Global Response
  • Measures may include payroll-tax cut, relief for hourly wage earners, president says.
  • He said he would hold a news conference Tuesday afternoon to lay out the proposals in more detail.
  • On Friday, Mr. Kudlow said possible fiscal measures included deferring taxes for the industries hardest hit by the virus—primarily hospitality and travel, an administration official said.
COVID-19: Implications for business (McKinsey) Published on: March 9, 2020 | Category: Economic Impact, Global Response
  • Those infected often display only mild symptoms (or no symptoms at all), so it is easy for public-health systems to miss such cases.
  • For example, 55 percent of the cases on board the Diamond Princess cruise ship did not exhibit significant symptoms.
  • We believe that the prevalent pessimistic narrative (which both markets and policy makers seem to favor as they respond to the virus) underweights the possibility of a more optimistic outcome to COVID-19 evolution.
Corporate America Races to Respond to a Crisis That Upends Work (WSJ) Published on: March 8, 2020 | Category: Economic Impact, Leadership
  • Employers separate their teams, require personal travel disclosures and offer cash for supplies.
  • On Monday, Bank of America Corp. will begin splitting up some employees on its equities and fixed-income teams between New York and Connecticut, creating redundancy so that if an employee gets sick and a whole team has to self quarantine, a backup team could keep functioning in its place.
  • Stripe Inc., a San Francisco-area financial-technology company, has switched to videoconferencing for job interviews in place of on-site meetings.
Canada set to lose millions of tourism dollars due to COVID-19: Joly (CTV News) Published on: March 7, 2020 | Category: Canadian Business, Economic Impact
  • She said that Chinese tourists visiting Canada amounts for an average of $2 billion in tourism revenue each year, and the current downturn is forecasted to result in a loss of $550 million by June.
  • Among the measures being taken: the government is going to be encouraging Canadians to explore their own country, diverting tourism promotion dollars towards domestic travel instead of continuing to target big international markets like China.
Editorial: On coronavirus, Canada’s leaders are getting it right (Ottawa Citizen) Published on: March 7, 2020 | Category: Canadian Business, Economic Impact
  • First, public health agencies have provided frequent, factual updates on COVID-19.
  • Second, their tone has been non-political.
  • But at the moment, there is unusual trust between Canadians and their governments on coping with COVID-19.
Foreign Investment Set to Fall on Coronavirus Outbreak (WSJ) Published on: March 6, 2020 | Category: Economic Impact, Global Response
  • Businesses will likely cut their overseas investments by between 5% and 15% this year in response to the coronavirus outbreak, but there may also be a longer-lasting movement of production back to their home countries, the United Nations said Friday.
  • It added that a majority of the largest 5,000 companies by revenues had revised their earnings expectations over the past month, and lowered their projections by 9% on average.
How are North American employers protecting employees from coronavirus? (Benefits Canada) Published on: March 6, 2020 | Category: Canadian Business, Economic Impact
  • The survey, which polled 158 employers, found more than half (59 per cent) have deployed communications campaigns geared toward preventing spread of the disease, while 44 per cent have increased access to hand sanitizers for their North American employees and 38 per cent are reviewing and or/revising HR policies and procedures.
  • However, only five per cent are evaluating and/or reserving for potential increased liabilities in their health plans.
Beyond the Coronavirus Crisis: Prepare Now (Bain) Published on: February 10, 2020 | Category: Economic Impact, Leadership
  • Tertiary industries (services) took the biggest hit, with transportation, hospitality/food and beverage, and the financial sector all down 3 or more percentage points.
  • While essentials—namely, groceries, nondiscretionary consumer products and pharmaceuticals—will remain strong, offline consumption will feel the worst effects.
  • Proactively update your M&A and partnership plans to include potential acquisitions, divestitures, partnerships and bold moves.