The impact of coronavirus is being felt across the global economy
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It’s been a month since China announced the death of the first victim of the new coronavirus. The outbreak has since infected more than 44,000 people and spread far beyond China.
Federal Reserve Chairman Jay Powell told lawmakers on Capitol Hill this week that he’ll be watching for the virus’s impact on the U.S. economy.
Santosh Rao, head of research at Manhattan Venture Partners, said coronavirus has the potential to disrupt the electronics supply chain.
“It’s everything: consoles, laptops, phones,” he said.
Already, we’ve seen delays in Apple’s iPhone production. TV manufacturers are also expected to slow down their assembly lines.
Some video game releases have been set back due to the outbreak. Analyst Ken Rumph at Jefferies pointed out that China supplies a lot of video game development.
“Intangible things, like doing the artwork, doing the programming that’s required, also have a supply chain,” he said.
Tourism is taking hit as fewer Chinese citizens travel abroad. And some watchmakers have pulled out of a trade show in Basel, Switzerland, because of concerns about the virus. Big automakers like GM and Toyota have yet to restart operations in China.
According to Dale Rogers, a professor of supply chain management at Arizona State University, China has grown more vital to global manufacturing in recent years.
“You know, it’s many times more important to global supply chains than it was at the beginning of the millennium,” he said.
It’s still hard to quantify exactly how much the virus has cost the American economy. Professor Menzie Chinn at the University of Wisconsin said until more recent data are published that “we’ll be relying on anecdotal evidence, informal surveys, and alternative indicators.”
A report out this week from shipping research company Sea Intelligence found that delays related to the coronavirus cost shipping companies $350 million a week in lost volume.
COVID-19 Economy FAQs
With a slow vaccine rollout so far, how has the government changed its approach?
On Tuesday, Jan. 12, Health and Human Services Secretary Alex Azar announced changes to how the federal government is distributing vaccine doses. The CDC has expanded coronavirus vaccine eligibility to everyone 65 and older, along with people with conditions that might raise their risks of complications from COVID-19. The new approach also looks to reward those states that are the most efficient by giving them more doses, but critics say that won’t address underlying problems some states are having with vaccine rollout.
What kind of help can small businesses get right now?
A new round of Paycheck Protection Program loans recently became available for pandemic-ravaged businesses. These loans don’t have to be paid back if rules are met. Right now, loans are open for first-time applicants. And the application has to go through community banking organizations — no big banks, for now, at least. This rollout is designed to help business owners who couldn’t get a PPP loan before.
What does the hiring situation in the U.S. look like as we enter the new year?
New data on job openings and postings provide a glimpse of what to expect in the job market in the coming weeks and months. This time of year typically sees a spike in hiring and job-search activity, says Jill Chapman with Insperity, a recruiting services firm. But that kind of optimistic planning for the future isn’t really the vibe these days. Job postings have been lagging on the job search site Indeed. Listings were down about 11% in December compared to a year earlier.
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