What have you bought recently? I don’t bet much. Insignificant things seem to be irrelevant at the moment, and the things we actually need are hard to find. I put my mask on and dragged myself to three different stores on Tuesday to hunt for flour (eventually a success at a nearby bodega), but yeast? Forget it. A record slump in retail sales for March shows the bigger story. Here you will find the latest business news and information for the coming week.
What’s going on? (April 12-18)
No more money
Another stunning 5.2 million people applied for unemployment in the week ending April 11, a total of 22 million in the past four weeks. These losses have wiped out employment growth for the past decade since the 2008 financial crisis. And the federal government’s economic stimulus package is already proving to be an absolutely inadequate emergency solution. The $ 349 billion loan program to help small businesses ran out of money last Thursday and failed millions of workers as Congress struggled to reach agreement to replenish the funds. Legislators are even considering voting online to speed up the process.
Most Americans are not in a shopping mood these days, and as expected, the Department of Commerce reported miserable retail sales in March. Online consumer spending, in brick-and-mortar stores, and in bars and restaurants, declined by 8.7 percent compared to February. This was by far the largest and fastest decline in the nearly three decades that sales data was collected. And it’s chicken and egg: retail jobs make up a large part of the economy. So if people don’t shop, others won’t get paychecks – and the cycle continues.
Which stimulus tests?
In recent weeks, struggling Americans have been waiting for Treasury aid to go up to $ 1,200 per adult and an additional $ 500 per child. But the rollout process hit some snafus. Some check recipients reported bugs in the crowd. Others are still waiting. And many people with overdrafted checking accounts saw their stimulus money garnished by their bank – which is technically legal, but negates the purpose of the Americans to use the money for immediate needs like rent and food. Legislators urged banks to halt collection processes, and most agreed to comply. The problem, however, highlights a more insidious problem: Many Americans need a lot more help and that quickly.
What’s next? (April 19-25)
Each state for itself
Even though the number of coronavirus deaths continues to increase, President Trump released guidelines for reopening the country’s economy entitled “Opening Up America Again” last Thursday. According to his plan, most current social distancing practices could be removed within four weeks. But in the end, he won’t make any decisions. He urged governors to “make their own decisions” to determine when to reopen businesses, schools, and other day-to-day services in their states. This means that some states could reopen by May 1st or even earlier if they wanted to. However, public health experts say the country should not be reopened until rapid test kits are widely available, and that Trump’s plan could lead to catastrophic infection recurrence.
But if you Do Fancy spending
At $ 399, Apple’s new iPhone SE isn’t quite recession-friendly, but it’s still the company’s cheapest smartphone in years. It will be available online next Friday. (Most Apple stores will of course remain closed.) Even if you don’t buy, you can see this as a good sign: The rollout shows that Apple’s supply chain in China is at least partially functioning again in the midst of the corona virus pandemic. Conveniently, the new phone offers fingerprint authentication at just the right time so that all face masks can insert a wrench into the face recognition software of most other devices.
The Brexit is not stopped
The coronavirus crisis has pushed Brexit procedures back into a precarious area. Trade negotiations were suspended in March due to the pandemic, but are scheduled to resume via video conference this week. And as always, time is running out: if the two sides don’t make much progress on the economic details of their divorce by June, the UK has announced it will prepare for a no-deal separation by the end of the year. (And yes, Britain has already officially withdrawn from the European Union, but its new trade relations – the business part of Brexit – have yet to be worked out.) As if the global economy now needed more uncertainty.
The lawsuit against Elizabeth Holmes, who is charged with fraud for her blood test start-up Theranos, was postponed to October because of the pandemic. Elsewhere in Silicon Valley, after a thorough review, Facebook is developing a scaled-down version of its cryptocurrency company Libra. And Amazon ceased operations in France after a court ruled that the company’s warehouses were not adequately protected against corona viruses.
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