US economic data reveals damage; job losses hit Trump resort
The outbreak of the coronavirus has dealt a shock to the global economy with unprecedented speed. Following are developments Wednesday related to the global economy, the work place and the spread of the virus.
NUMBERS TELL A GRIM STORY: Data just emerging paints a devastating picture of the extent to which the outbreak has seized the economy, as well as the livelihood of Americans.
— Not since the U.S. demobilized after World War II has the country seen such a rapid winding down of its industrial might. The numbers were not unexpected, but still shocking. “We all knew this was coming, but it does not make the heartache any less real for the furloughed workers, the people in related industries or suppliers,” wrote Wells Fargo economists Tim Quinlan and Sarah House.
— The Federal Reserve Bank of New York’s index for state manufacturing plummeted 56.7 points in April, the largest monthly decline in its history dating back to 2001. At 78.2 this month, it is also the lowest it's ever fallen.
— Consumer confidence as measured in a monthly index put out by Refinitiv/Ipsos registered its largest monthly decline ever in April. According to the Refinitiv/Ipsos Primary Consumer Sentiment Index, consumer confidence tumbled 12.3 points to 47.8.
JOBS EVAPORATE: Jobs are vanishing at an astounding rate. More job cuts and furloughs arrive daily.
— The Trump golf resort in South Florida where President Donald Trump initially wanted to host this year’s Group of Seven summit has temporarily laid off 560 workers. The laid off workers at the Trump National Doral Miami are mostly food and beverage workers, golf attendants, housekeepers and bell hops. None are unionized.
— Royal Caribbean Cruises Ltd. said Wednesday it is laying off or furloughing about 26% of its 5,000 U.S. corporate employees. The Miami-based company said it has also cut many of its crew contracts. Royal Caribbean has canceled all sailings through May 11. In addition, sailings in Canada, Alaska and New England are canceled until July 1 because of port closures.
— Best Buy becomes the latest national chain to announce massive furloughs. The company will begin furloughing about 51,000 of its hourly employees, including nearly all of its part-time hourly employees and a small portion of its full-time hourly employees starting Sunday. Best Buy will begin voluntary, temporary reduced work weeks as well.
— Honda will furlough most of its salaried and support workers in the U.S. for two weeks as the automaker deals with falling sales and stay-home orders due to the coronavirus. The company wouldn’t say how many workers will be furloughed. The company has about 31,000 U.S. workers, with over three quarters of them in manufacturing. Many salaried workers are at in the Marysville, Ohio, and Los Angeles areas.
EYEING RESTART: Automakers are looking ahead to when they can gradually resume production that has ground to a halt to protect workers from the virus.
— Volkswagen says it will resume production at passenger car plants in Europe next week, starting at plants in Zwickau, Germany and in Bratislava, Slovakia. The Wolfsburg, Germany-based company said on Wednesday that other plants in Germany and in the U.S., Portugal, Spain and Russia will resume production in the week starting April 27. Factories in South Africa, Argentina, Brazil and Mexico will follow in May.
AIR TRAVEL: A rescue package for U.S. airlines has been reached, though the large-scale shutdown is has hit millions of people working in industries that rely on robust travel.
— United Airlines said Wednesday it expects to get $5 billion in federal cash and loans to meet payroll costs through September. That’s a little less than the $5.8 billion and $5.4 billion that American and Delta expect in figures they issued the day before.
Airline stocks were mixed Wednesday on news that 10 carriers including all the biggest ones struck deals with the Trump administration to get coronavirus-relief funds. The aid will cover only 76% of airlines’ their payroll costs, and J.P. Morgan analyst Jamie Baker said he doesn’t see how airlines will avoid “massive layoffs” in October unless federal payroll protection is extended.
STIMULUS CHECKS: The relief money has started rolling out. Millions are anxiously awaiting theirs.
— The IRS said that despite complaints by some users, the “Get My Payment” application it launched Wednesday is operating “smoothly and effectively.” The application allows taxpayers to check on the status of their economic relief payment or provide the banking information necessary so their payment can be sent to them by direct deposit.
The IRS said that as of midday Wednesday, more than 6.2 million taxpayers had received their payment status and almost 1.1 million have provided information for direct deposit. It said that if site volume gets too high, users are sent to an online “waiting room” until space becomes available but the site has not crashed.
— Amazon threatened Wednesday to suspend all activity in France after a French court found it wasn’t doing enough to protect its workers. The online giant also announced plans to appeal Tuesday’s emergency ruling, which requires Amazon to stop selling non-essential goods for a month while it works out new worker safety measures. Sales of food, medicine and hygiene supplies are still allowed under the ruling.
EARNINGS: Twenty-three S&P 500 constituents are scheduled to report quarterly earnings this week. Everyone will be looking closely at companies with operations in China to see how those operations emerged from the outbreak.
— The largest banks and financial players began to roll out quarterly earnings Wednesday. Those institutions anticipate a flood of loan defaults as households and business customers take a big financial hit from the coronavirus pandemic.
— Global stocks and oil prices tumbled Wednesday on grim economic data from the U.S. and after the International Monetary Fund said the global economy will log its worst year since the Great Depression.
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