US - Econ. Slowdown - How deep & long ? 06 (Oct 16 - Jul 22)

[winston]

Nearly Half of US Small Businesses Could Shut Down in 6 Months

by Paul Ausick

About 43% of small businesses believe they have less than six months before they will have to close permanently.

Nearly a quarter (24%) of small businesses already have shut down temporarily and another 40% say they will have to shut down temporarily within the next two weeks.

Almost half (46%) think it will take the U.S. economy six months to one year to return to normal.

There are more than 30 million small businesses (those with fewer than 500 employees) in the United States, and nearly 59 million people who are employed by small businesses.

Since the end of December, small business owners’ sentiment on the national economy has dropped from 60% to 25% and from 52% to 32% on their local economies. More than half (54%) rate the overall U.S. economy as “poor.”

Of the more than 30 million U.S. small businesses, about 5.3 million employ between one and four people, and more than 24 million have no paid employees.

Source: 24/7 Wall Street

https://247wallst.com/economy/2020/04/1 ... APR142020a

[winston]

US economic data show deep hit in March, collapse in April

Almost every US state has issued a stay-at-home order and many businesses have temporarily shuttered in effort to contain the virus.

WASHINGTON (Bloomberg) -- US retail sales and factory output posted historic declines in March, and other figures showed that the worst is yet to come.

The value of overall retail sales fell 8.7% from the prior month, the biggest decline in records dating back to 1992, according to Commerce Department data released Wednesday.

One bright spot: Food and beverage stores posted a record 25.6% surge as Americans stocked up on essential goods; sales also rose at health and personal care stores, general merchandise stores and nonstore retailers.

But most categories were down sharply, with clothing stores’ sales falling by half, while restaurants and bars were down 26.5%.

JPMorgan Chase & Co. said in a note that it continues to expect a 40% annualized decline in gross domestic product in the second quarter.

The Census Bureau noted irregular reporting of results, as many businesses had either curtailed or ceased operations -- presumably those hardest hit were the least able to collate and report results.”

"While personal consumption may start to come back in the third quarter, a downturn in business investment will linger. The sector may not start to recover until the end of the year at best, according to our forecast.”

"The March data is bad but the April data is likely to be even worse because for a good half of March, things were still open,” said Michael Gapen, chief US economist at Barclays Plc.

Source: Bloomberg

https://www.thestar.com.my/business/bus ... e-in-april

[winston]

Retailers in the U.S. are facing staggering drops in business

Surveys conducted by PYMNTS have found that 58 percent of small to medium-sized Main Street retailers say they may not survive the pandemic.

Source: PYMPTS

[winston]

Virus makes up to 50m American workers vulnerable

Layoffs in the United States are spreading well beyond service industries like hotels, restaurants, retail stores and entertainment, which have absorbed the brunt of the job cuts, into white collar professional occupations, including software programmers, legal assistants and sales people. Workers in other occupations, like construction, are also suffering.

Up to 50 million jobs are vulnerable to coronavirus-related layoffs, economists say — about one-third of all positions in the United States. That figure is based on a calculation of jobs that are deemed non-essential by state and federal governments and that cannot be done from home.

It’s unlikely that all those workers will be laid off or file for unemployment benefits. But it suggests the extraordinary magnitude of unemployment that could result from the pandemic.

“This crisis combines the scale of a national economic downturn with the pace of a natural disaster,” said Daniel Zhao, senior economist at Glassdoor. “And that’s really unprecedented in American economic history.”

All told, nearly 12 million people are now receiving unemployment checks, essentially matching the peak reached in January 2010, shortly after the Great Recession officially ended. That figure is less than the number of applicants in part because it lags behind the number of first-time jobless claims figure by a week. And many people who apply for unemployment aid are turned down and don’t actually receive checks.

Source: AP

https://www.thestandard.com.hk/breaking ... vulnerable

[winston]

How bad are things?

Nearly one-third of all apartment-renters didn't pay April rent. That number will be worse in May ...

The federal small business rescue loan program is now tapped out, having already exhausted its $349 billion limit. Additional funds have not been appropriated (keep in mind, small businesses employ 47% of all Americans) ...

U.S. retail sales plunged 8.7% in March ...

Manufacturing output slumped by the most in over 74 years ...

Predictions from leading economists claim that the U.S. economy will contract by 30% from April through June ...

Health experts suggest we'll see a second wave of infections as 2020 rolls on (again, barring a curative antiviral) ...

We've barely just begun Q1 earnings season, so we're missing key information about just how bad the earnings damage has been ... keep in mind, Q2 earnings reports in July will likely be just as bad or worse ...

Source: Investor Place

[winston]

Investors think the coronavirus has put the US economy into another Great Depression

by Brian Sozzi

Equities strategists would universally agree the market has factored in two quarters of outright economic ugliness in the United States at the hands of the deadly coronavirus.

Since mid-March, 26 million more people have applied for jobless benefits. This would mean an unemployment rate of 20.6% and the rate is closing in on Great Depression levels where a quarter of all jobs are lost.

“It is going to take years not months to put these pandemic jobless workers back to work at the shops and malls and factories and restaurants across the country.

What are stock market investors thinking? There's at least 33 million people out of work in the country. Investors should be running for their lives”.

The stock market fell 57.7% at the worst point of the Great Depression. The S&P 500 was only down 13.3% year-to-date through Wednesday’s close of trading.

Source: Yahoo Finance

https://finance.yahoo.com/news/investor ... 59535.html

[winston]

The US economy has wiped out all the job gains since the Great Recession

by Thomas Franck

The Labor Department reported that the number of Americans applying for state unemployment benefits totaled 4.427 million last week.

Combined with the prior four jobless claims reports, the number of Americans who have filed for unemployment over the last five weeks is 26.45 million.

That number far exceeds the 22.442 million jobs added to payrolls since November 2009, when the U.S. economy began to add jobs back after the recession.

Source: CNBC

https://www.cnbc.com/2020/04/23/the-us- ... ssion.html

[behappyalways]

2020.04.26【文茜世界財經周報】失業人口天文數字　各州重啟經濟最大考量
https://www.youtube.com/watch?v=6qjjmUp7X_I

[winston]

What do we have now?

1. Oil prices so low that they threaten to decimate the U.S. oil industry.

2. A slew of companies on the brink of declaring bankruptcy (beyond the obvious companies in the oil industry, we have retailers including J.C. Penney and Neiman Marcus).

3. A likely dramatic rise in consumer credit card defaults (in China, a proxy for what we might see here in the U.S., overdue credit-card debt swelled last month by about 50% from a year earlier).

4. The private mortgage lending market facing 3.4 million borrowers who are unable to make their mortgage payments on time. That represents $754 billion in unpaid principal, plus unpaid interest on the loans. Though lenders have received some federal relief funds, many are still feeling a dangerous squeeze.

5. Another month when a significant portion of the country will remain closed for business, increasing the risk of some smaller businesses closing doors forever without rehiring. And the parts of the country that are re-opening are doing so very slowly because the re-opening might have terrible consequences in the fight against COVID-19.

Wall Street's 30% rally suggests it's already lumping this into the "past" bucket. Or, we should just shift our gaze further out.

After the S&P's vigorous rally over the last month, its forward P/E is 19.1.

For context, that puts it 14% higher than its 5-year average of 16.7. It's also 27% higher than its 10-year average of 15.

Source: Investor Place

[behappyalways]

New orders reading in key ISM factory index is at its worst since the 1950s
https://www.marketwatch.com/story/ism-f ... ck_seemore