COVID-19

The impact of coronavirus is being felt across the global economy

Justin Ho Feb 12, 2020
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Commuters in a Hong Kong subway station wear face masks to protect against the spread of the coronavirus ahead of the Chinese New Year on Jan. 23. Vivek Prakash/AFP via Getty Images
COVID-19

The impact of coronavirus is being felt across the global economy

Justin Ho Feb 12, 2020
Commuters in a Hong Kong subway station wear face masks to protect against the spread of the coronavirus ahead of the Chinese New Year on Jan. 23. Vivek Prakash/AFP via Getty Images
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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.”

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

What’s going on with extra COVID-19 unemployment benefits?

The latest: President Donald Trump signed an executive action directing $400 extra a week in unemployment benefits. But will that aid actually reach people? It’s still unclear. Trump directed federal agencies to send $300 dollars in weekly aid, taken from the federal disaster relief fund, and called on states to provide an additional $100. But states’ budgets are stretched thin as it is.

What’s the latest on evictions?

For millions of Americans, things are looking grim. Unemployment is high, and pandemic eviction moratoriums have expired in states across the country. And as many people already know, eviction is something that can haunt a person’s life for years. For instance, getting evicted can make it hard to rent again. And that can lead to spiraling poverty.

Which retailers are requiring that people wear masks when shopping? And how are they enforcing those rules?

Walmart, Target, Lowe’s, CVS, Home Depot, Costco — they all have policies that say shoppers are required to wear a mask. When an employee confronts a customer who refuses, the interaction can spin out of control, so many of these retailers are telling their workers to not enforce these mandates. But, just having them will actually get more people to wear masks.

You can find answers to more questions on unemployment benefits and COVID-19 here.

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