The world’s economy is in a recession more severe than any global financial crisis since the Great Depression, says the International Monetary Fund. The lending agency has revised its 2020 forecast, now seeing the global economy contracting about 3 percent this year, dropping about $2.7 trillion from last year’s $90-trillion output. The 3-percent forecast far exceeds the 0.1-percent contraction the...
LAYOFFS, BAILOUTS, AND BANKRUPTCIES
The current economic panic first took a large swath of low-wage jobs – fast-food workers, hotel maids, and retail clerks. Now the layoffs are reaching higher. Businesses that sent office workers home to continue their jobs are now furloughing them as business disappears. Corporate lawyers reportedly are shrinking in numbers. Health care employees not on the front lines of the...
HIGHER EDUCATION GOING LOWER
As the pandemic spreads, the aftermath is forcing colleges to face a future that could be markedly different from the immediate past. High tuition costs, the prospect of lifelong debt, and an uncertain job market already had many students rethinking their choices in post-secondary education, wondering if college is worth the cost. Now the economic lockdown’s effects are forcing those...
U.S HOME CONSTRUCTION PLUMMETS 22 PERCENT
Builders broke ground of 1.2 million new housing units in March, compared to 1.56 million in February. That’s a decline of about 22 percent as the U.S. housing industry enters its’ busiest construction season of the year. Construction of new single-family homes dropped 17.5 percent; apartment and condo starts plummeted 32.1 percent from last month, according to the U.S. commerce...
NEW YORK FED TO CUT BACK ON REPO LOANS?
Fact or fiction? The Federal Reserve Bank of New York, which artificially propped up the equity markets by pumping in several trillion dollars beginning last September, announced last week they “soon” will begin to reduce the amount of money it makes available to trading houses with short-term “repo” loans. In either a state of denial or illusion, the bank cited...
RETAILERS ON THE ROPES
In March, U.S. industrial activity slowed by 5.4 percent from February, the biggest month-to-month drop since the end of World War II. Retail sales shrank 8.2 percent from February, the greatest single monthly decline since 1992 when records began to be kept. Spending in restaurants and bars was off by 25 percent, as were vehicle purchases. Sales at clothing stores...
DOLLAR UP AS ECONOMIES GO DOWN
On 15 April, the dollar gained an additional 0.8 percent in value against a collection of 16 other major currencies. The dollar was strong enough to pull investors away from gold, the price of which retreated 1.4 percent on the day. Several factors drove investors to the safety of the dollar: Stimulus money from the U.S. Federal Reserve has once...
PAYCHECK PROTECTION PROGRAM PROTECTS FEW
The Federal Reserve’s $349-billion Paycheck Protection Program, or PPP, which was designed to lend money to small businesses to fund their payrolls during the economic crisis, saw its funding claimed within minutes of applications becoming available. The Bank of America, which manages a portion of PPP money on behalf of the Federal Reserve, received over 10,000 applications on the first...
U.S. MARKETS
The Dow shed 592 points yesterday, in the wake of a historic crash in short-term oil prices, with benchmark West Texas intermediate crude closing at negative $37.63 on Monday… the first time oil futures had not only reached, but sunk, below zero. The market selloff continued today with indexes across Asia, Europe and the U.S., down over 2 percent on...
CURE WORSE THAN THE DISEASE?
As reported in last week’s Trends Journal, the mass shutdown of the global economy is having the most drastic effects on the poor and middle class. In the U.S., the wealthiest country in the world, aerial photographs show miles-long lines of cars seeking much-needed food bank handouts. Over 22 million Americans have filed for unemployment in a system incapable of...