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
Which businesses are allowed to reopen right now? And which businesses are actually doing so?
As a patchwork of states start to reopen, businesses that fall into a gray area are wondering when they can reopen. In many places, salons are still shuttered. Bars are mostly closed, too, although restaurants may be allowed to ramp up, depending on the state. “It’s kind of all over the place,” said Elizabeth Milito of the National Federation of Independent Business.
Will you be able to go on vacation this summer?
There’s no chance that this summer will be a normal season for vacations either in the U.S. or internationally. But that doesn’t mean a trip will be impossible. People will just have to be smart about it. That could mean vacations closer to home, especially with gas prices so low. Air travel will be possible this summer, even if it is a very different experience than usual.
When does the expanded COVID-19 unemployment insurance run out?
The CARES Act, passed by Congress and signed by President Donald Trump in March, authorized extra unemployment payments, increasing the amount of money, and broadening who qualifies. The increased unemployment benefits have an expiration date — an extra $600 per week the act authorized ends on July 31.
You can find answers to more questions here.
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