The Week in Business: Everyone’s Broke, and Relief Runs Dry
What have you bought lately? Not much, I bet. Nonessentials seem beside the point right now, and the things we actually need are hard to find. I donned my mask and schlepped to three different stores to hunt down flour on Tuesday (success, finally, at a nearby bodega), but yeast? Forget about it. A record plunge in retail sales for March shows the bigger story. Here’s the latest business news, and what to know for the week ahead.
What’s Up? (April 12-18)
Out of Money
Another mind-boggling 5.2 million people filed for unemployment during the week ending April 11, bringing the total from the past four weeks to 22 million. Those losses wipe out the entire past decade’s job growth since the 2008 financial crisis. And the federal government’s stimulus bill is already proving to be a woefully inadequate stopgap. The $349 billion lending program that was supposed to help small businesses ran out of money this past Thursday, leaving millions of workers in the lurch while Congress struggles to reach a deal to replenish the funds. Lawmakers are even considering voting online to speed up the process.
Sour Sales
Most Americans aren’t exactly in a shopping mood these days, and as expected, the Commerce Department reported abysmal retail sales for March. Consumer spending online, in brick-and-mortar stores, and at bars and restaurants fell 8.7 percent from February, by far the biggest and fastest drop in the nearly three decades that sales data has been recorded. And it’s chicken-and-egg: Retail jobs make up a huge part of the economy, so if people aren’t shopping, others won’t get paychecks — and the cycle continues.
What Stimulus Checks?
Over the past few weeks, struggling Americans have awaited deposits of relief funds from the Treasury Department — up to $1,200 per adult, with an additional $500 per child. But the rollout process has hit some snafus. Some check recipients reported errors in the amount. Others are still waiting. And many people with overdrawn checking accounts saw their stimulus money garnished by their bank — which is technically legal, but defeats the purpose of Americans putting the cash toward immediate needs like rent and food. Lawmakers called on banks to pause collections processes, and most agreed to comply. But the issue highlights a more insidious problem: Many Americans need a lot more help, and quickly.
What’s Next? (April 19-25)
Every State for Itself
Even as coronavirus deaths continue to surge, President Trump unveiled guidelines this past Thursday for reopening the country’s economy, titled “Opening Up America Again.” Under his plan, most current social distancing practices could be lifted within four weeks. But ultimately, he won’t make the decisions. He told governors to “call your own shots” in determining when to reopen businesses, schools and other everyday services in their states. That means some states could reopen by May 1, or even earlier if they wanted. But public health experts say that the country should not reopen until rapid-testing kits are widely available, and that Mr. Trump’s plan could lead to a disastrous resurgence of infections.
But If You Do Feel Like 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 for purchase online this coming Friday. (Most Apple stores remain closed, of course.) Even if you’re not buying, you can take this as a good sign: The rollout shows that Apple’s supply chain in China has resumed functioning, at least somewhat, amid the coronavirus pandemic. Conveniently, the new phone offers fingerprint authentication just in time for everyone’s face masks to throw a wrench in most other devices’ facial-recognition software.
Brexit Will Not Be Stopped
The coronavirus crisis has pushed Brexit procedures back into precarious territory. Trade negotiations were suspended in March because of the pandemic, but they are set to resume this week by videoconference. And as usual, time is tight: If the two sides don’t make major headway in hammering out the economic details of their divorce by June, then Britain has said it will start preparing for a no-deal separation at the end of the year. (And yes, Britain did formally withdraw from the European Union already, but their new trade relationship — the business part of Brexit — still has to be worked out.) As if the global economy needed more uncertainty right now.
What Else?
The trial of Elizabeth Holmes, who faces fraud charges over her blood-testing start-up Theranos, has been postponed to October because of the pandemic. Elsewhere in Silicon Valley, Facebook — after much scrutiny — is moving forward with a scaled-back version of its cryptocurrency venture, Libra. And Amazon shut down its operations in France after a court ruled that the company’s warehouses were not observing proper coronavirus protection measures.
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