With the United States of America having the most number of active coronavirus cases in the world, the pandemic, still spreading like wild fire, is now starting to jeopardise the first world country's economy.
A report by Washington Post states that millions of Americans are suddenly out of work and many businesses have already closed under orders from state and local governments to close to prevent the spread of the virus. A record 3.28 million Americans filed for unemployment benefits in the week ended March 21.
The US restaurant industry has reportedly lost $25 billion in sales since March 1, according to a survey of 5,000 owners by the National Restaurant Association. Nearly 50,000 stores of major U.S. retail chains have closed, according to the companies.
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.
The Organization for Economic Cooperation and Development on Friday said, economic activity in the US and other developed countries could be lowered by close to 25 per cent.
Washington Post's report also states that Nike Inc. is asking to pay half its rents. TJ Maxx is delaying payments to its suppliers. Victoria’s Secret and Men’s Wearhouse have furloughed thousands of workers. Cheesecake Factory Inc. closed 27 of the company’s locations and furloughed 41,000 hourly workers, nearly 90 per cent of its total staff.
Owners of independent and small restaurant chains have also asked their landlords for rent relief, with mixed responses. Some say landlords are offering them deferments of several months, whereas others haven’t received much help yet.
Mortgage firms are bracing for a wave of missed payments starting April 1 as borrowers lose their jobs.
Treasury Secretary Steven Mnuchin said the Trump administration aims to send out direct payments to individuals in three weeks and that banks should be able to originate same-day loans for small businesses in as little as a week.
Many business owners and individuals said they have little in the way of cash reserves or savings for bills that come due in the next few days. Some wonder whether the aid will be enough.
Financial pressures are particularly intense for small business owners; In a typical community, about half of small businesses had less than two weeks of cash liquidity, according to a 2019 report by the JPMorgan Chase Institute.
A report by Bloomberg states that it’s possible that the US scattershot, slow and ineffective response to this crisis is a result of leadership failures or the recent era of political division. President Donald Trump eliminated a pandemic response team at the National Security Council, his appointments to the Centers for Disease Control and the Food and Drug Administration have been controversial, and his messaging has generally been unhelpful and conflicting.
Comments
0 comment