The U.S. is in trouble.
However, the Federal Reserve seems ready to act.
“There’s a lot more we can do,” said Federal Reserve Chairman Jerome Powell, as quoted CBS News 60 Minutes, as quoted by CNN. “We’ve done what we can as we go. But I will say that we’re not out of ammunition by a long shot. No, there’s really no limit to what we can do with these lending programs that we have.”
At the moment, thanks to the effects of the coronavirus shutdowns things are bad.
According to the National Bureau of Economic Research for example, found the pandemic will lead to the death of more than 100,000 small and medium sized businesses, says PYMNTS.com.
Worse, according to Restaunt.com, “As the coronavirus epidemic rages on, 3% of restaurant operators have already permanently closed their restaurants, 44% have temporarily closed their restaurants, and 11% say they anticipate they will permanently close within the next 30 days, according to new research from the National Restaurant Association.”
On top of that, the Federal Reserve Bank of Atlanta says U.S. GDP will sink by 42.8% in the second quarter of the year. “The economy is essentially still in freefall because of the shutdown, there is no question about that and the pandemic contraction in 2Q is going to be very difficult,” top White House Economic Advisor Larry Kudlow told Fox Business.
As for employment, Goldman Sachs says the unemployment rate could spike to 25%.
We’ve also learned the number of Americans filing for initial jobless claims is now up to 36.5 million. Worse, up to 42% of workers experiencing layoffs could suffer permanent job losses, says the National Bureau of Economic Research.
Retail sales are also plunging, which isn’t a shock with unemployment numbers. U.S. retail sales collapsed 16.4% in April 2020 thanks to the virus threat.
Once the threat of the virus is over, there’s hope we’ll see significant improvements to all.