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Consumer Confidence Plunges as U.S. Economy Collapses: Live Updates Consumer Confidence Plunges as U.S. Economy Collapses: Live Updates
(32 minutes later)
Consumer sentiment tumbled in March as the coronavirus pandemic wiped out millions of jobs and erased trillions of dollars in market value.Consumer sentiment tumbled in March as the coronavirus pandemic wiped out millions of jobs and erased trillions of dollars in market value.
The University of Michigan’s index of consumer sentiment showed the fourth-largest monthly drop in the survey’s 41-year history, according to data released Friday.The University of Michigan’s index of consumer sentiment showed the fourth-largest monthly drop in the survey’s 41-year history, according to data released Friday.
Richard Curtin, chief economist for the survey, noted that two of the larger monthly drops — in October 2008 and December 1980 — presaged long and deep recessions. The other came after Hurricane Katrina ravaged the Gulf Coast in 2005. The coronavirus is in some ways the equivalent of a hurricane hitting the entire country at once.Richard Curtin, chief economist for the survey, noted that two of the larger monthly drops — in October 2008 and December 1980 — presaged long and deep recessions. The other came after Hurricane Katrina ravaged the Gulf Coast in 2005. The coronavirus is in some ways the equivalent of a hurricane hitting the entire country at once.
Sentiment fell even further at the end of the month, putting April on track for the steepest decline on record.Sentiment fell even further at the end of the month, putting April on track for the steepest decline on record.
“As with so much else related to this episode, the numbers are going to get worse before they get better,” Stephen Stanley, chief economist for Amherst Pierpont, wrote in a note to clients.“As with so much else related to this episode, the numbers are going to get worse before they get better,” Stephen Stanley, chief economist for Amherst Pierpont, wrote in a note to clients.
The sharp drop in confidence is hardly a surprise. But it is another troubling sign of how the pandemic is rippling through the economy. If the economic collapse leads to a pullback in spending even among consumers who have not lost jobs and income, that could set off a downward spiral that could be hard to pull out of even when the immediate threat of the virus has passed.The sharp drop in confidence is hardly a surprise. But it is another troubling sign of how the pandemic is rippling through the economy. If the economic collapse leads to a pullback in spending even among consumers who have not lost jobs and income, that could set off a downward spiral that could be hard to pull out of even when the immediate threat of the virus has passed.
President Trump, who has expressed reluctance in recent days to use the Defense Production Act to mobilize private industry to produce critically needed ventilators, reversed himself Friday in a series of posts on Twitter.President Trump, who has expressed reluctance in recent days to use the Defense Production Act to mobilize private industry to produce critically needed ventilators, reversed himself Friday in a series of posts on Twitter.
Mr. Trump lashed out at General Motors on Twitter, blaming it for failing to begin work on new production of ventilators. He said that the company “MUST immediately open their stupidly abandoned Lordstown plant in Ohio, or some other plant, and START MAKING VENTILATORS, NOW!!!!!!Mr. Trump lashed out at General Motors on Twitter, blaming it for failing to begin work on new production of ventilators. He said that the company “MUST immediately open their stupidly abandoned Lordstown plant in Ohio, or some other plant, and START MAKING VENTILATORS, NOW!!!!!!
G.M. sold the Lordstown plant last year to a company that is planning to use it to make electric pickup trucks.G.M. sold the Lordstown plant last year to a company that is planning to use it to make electric pickup trucks.
Later on Friday, G.M. and Ventec Life Systems, which have been working together, said they would begin shipping ventilators as soon as next month. The automaker said it would use a factory in Kokomo, Ind., to make ventilators and Ventec said it would increase production at its plant in Bothell, Wash. G.M. will also manufacture surgical masks, ramping up to 50,000 masks per day within two weeks. The announcement said General Motors was “donating its resources at cost.”Later on Friday, G.M. and Ventec Life Systems, which have been working together, said they would begin shipping ventilators as soon as next month. The automaker said it would use a factory in Kokomo, Ind., to make ventilators and Ventec said it would increase production at its plant in Bothell, Wash. G.M. will also manufacture surgical masks, ramping up to 50,000 masks per day within two weeks. The announcement said General Motors was “donating its resources at cost.”
“Depending on the needs of the federal government, Ventec and GM are poised to deliver the first ventilators next month and ramp up to a manufacturing capacity of more than 10,000 critical care ventilators per month with the infrastructure and capability to scale further,” the statement from the companies said.“Depending on the needs of the federal government, Ventec and GM are poised to deliver the first ventilators next month and ramp up to a manufacturing capacity of more than 10,000 critical care ventilators per month with the infrastructure and capability to scale further,” the statement from the companies said.
An announcement with the White House had been planned for earlier in the week, but was canceled.An announcement with the White House had been planned for earlier in the week, but was canceled.
In a series of tweets, Mr. Trump accused the nation’s carmakers and others of dragging their feet, a contrast to his claim on Thursday that states were overstating their need for tens of thousands of ventilators. The carmakers note that they have not been given any contracts by the Federal Emergency Management Agency, and that the White House had failed to make a decision about who should be supplying the ventilators, which help critically ill patients breathe.In a series of tweets, Mr. Trump accused the nation’s carmakers and others of dragging their feet, a contrast to his claim on Thursday that states were overstating their need for tens of thousands of ventilators. The carmakers note that they have not been given any contracts by the Federal Emergency Management Agency, and that the White House had failed to make a decision about who should be supplying the ventilators, which help critically ill patients breathe.
Ford said in a statement that it was in “active conversations with the administration seeking guidance about approvals, scope, and distribution relating to a series of products, including ventilators.”Ford said in a statement that it was in “active conversations with the administration seeking guidance about approvals, scope, and distribution relating to a series of products, including ventilators.”
Google said it had removed the Infowars app from its Google Play store. The app is part of the media company owned by Alex Jones, a conspiracy theorist and conservative radio show host. Google removed the app on Friday after Mr. Jones posted a video disputing the need for social distancing and some of the isolation policies aimed at curbing the spread of the virus.
Earlier this month, The New York State attorney general issued a cease-and-desist order to Mr. Jones because of false claims on his website that his diet supplements and toothpaste could be used to fight the coronavirus.
Google also said it is donating about $800 million in financial assistance to help small businesses secure capital and continue to advertise through the company. In a blog post on Friday, Sundar Pichai, chief executive of Google’s parent company Alphabet, said it is providing $250 million in ad grants to more than 100 government agencies including the World Health Organization to disseminate information on how to prevent the spread of the coronavirus.
In addition, the company said it is creating a $200 million investment fund to support nongovernmental organizations and financial institutions to provide capital to small businesses and it is granting $340 million in ad credits to existing small and mid-sized business customers who have had an account with the company for more than a year.
Stocks fell on Friday as investors who initially cheered progress on a $2 trillion U.S. aid package saw further economic troubles ahead.Stocks fell on Friday as investors who initially cheered progress on a $2 trillion U.S. aid package saw further economic troubles ahead.
The legislation, which was passed by the Senate, is set for a vote in the House on Friday but could be delayed a day if any lawmaker insists on a recorded vote. At least one Democrat and one Republican have suggested they might do so. The plan is the largest emergency spending program in the nation’s history, but some economists have said it might not be enough to counter the potentially enormous economic damage from the coronavirus pandemic.The legislation, which was passed by the Senate, is set for a vote in the House on Friday but could be delayed a day if any lawmaker insists on a recorded vote. At least one Democrat and one Republican have suggested they might do so. The plan is the largest emergency spending program in the nation’s history, but some economists have said it might not be enough to counter the potentially enormous economic damage from the coronavirus pandemic.
The S&P 500 dropped nearly 3 percent on Friday.The S&P 500 dropped nearly 3 percent on Friday.
The drop on Friday reflected caution ahead of the weekend, when bad news about the virus’s spread or further efforts to contain it could overtake the positive sentiment stirred up by the passage of the stimulus bill, Steven Ricchiuto, the chief economist at Mizuho, said in a note to clients. The drop on Friday reflected caution ahead of the weekend, when bad news about the virus’s spread or further efforts to contain it could overtake the positive sentiment stirred up by the passage of the stimulus bill, Steven Ricchiuto, the chief economist at Mizuho, said in a note to clients.
“After the stimulus bill passes, and households and companies begin waiting for the government money to start flowing, news stories will resume a more negative tilt,” Mr. Ricchiuto wrote.“After the stimulus bill passes, and households and companies begin waiting for the government money to start flowing, news stories will resume a more negative tilt,” Mr. Ricchiuto wrote.
Wall Street had surged for the past three days, as investors bid up shares of companies that were set to receive support from the aid bill. The S&P 500’s climb of more than 17 percent over those days was its best three-day run since 1933.Wall Street had surged for the past three days, as investors bid up shares of companies that were set to receive support from the aid bill. The S&P 500’s climb of more than 17 percent over those days was its best three-day run since 1933.
Shares in Europe also fell. Investors may be concerned that European leaders were far apart on bolder measures like joint debt to fend off the looming recession facing the eurozone. They instructed a group of finance ministers to report back in two weeks.Shares in Europe also fell. Investors may be concerned that European leaders were far apart on bolder measures like joint debt to fend off the looming recession facing the eurozone. They instructed a group of finance ministers to report back in two weeks.
Declines in London, Paris and Frankfurt ranged from 2 to 4 percent on Friday. Earlier, Asian markets were generally higher, on the heels of Thursday’s 6 percent gain in U.S. stocks.
The chief executives of American Airlines and Southwest Airlines — crosstown rivals in the Dallas area — sent very different messages to their employees on Friday about a proposed federal bailout for their industry working its way through Congress. American’s boss welcomed it while Southwest’s leader was not sure his company would take the money.The chief executives of American Airlines and Southwest Airlines — crosstown rivals in the Dallas area — sent very different messages to their employees on Friday about a proposed federal bailout for their industry working its way through Congress. American’s boss welcomed it while Southwest’s leader was not sure his company would take the money.
Doug Parker, the chief executive of American, the largest U.S. airline by total passengers, told employees that the company was pleased by what it expected would be $12 billion in federal aid, or about a fourth of the total set aside for passenger airlines in the stimulus bill.Doug Parker, the chief executive of American, the largest U.S. airline by total passengers, told employees that the company was pleased by what it expected would be $12 billion in federal aid, or about a fourth of the total set aside for passenger airlines in the stimulus bill.
“We are confident those funds along with our relatively high available cash position will allow us to ride through even the worst of potential future scenarios,” Mr. Parker said in a recorded message.“We are confident those funds along with our relatively high available cash position will allow us to ride through even the worst of potential future scenarios,” Mr. Parker said in a recorded message.
But Gary Kelly, the chief executive of Southwest, the largest airline by domestic passengers, was far more circumspect in a message he sent to employees. “It gives us another option,” Mr. Kelly said. “We have opportunities to raise capital in the private markets and now we also have that opportunity with the federal government.”But Gary Kelly, the chief executive of Southwest, the largest airline by domestic passengers, was far more circumspect in a message he sent to employees. “It gives us another option,” Mr. Kelly said. “We have opportunities to raise capital in the private markets and now we also have that opportunity with the federal government.”
The bill provides passenger airlines with $25 billion in grants to cover employee pay and an equal amount in loans. In exchange, airlines must commit to maintaining staffing through September and limiting stock buybacks and dividends and executive pay. The bill allows the Treasury Department to take an equity stake in airlines that take accept money from the government, but it does not provide details on how or to what extent such authority would be exercised. The bill provides passenger airlines with $25 billion in grants to cover employee pay and an equal amount in loans. In exchange, airlines must commit to maintaining staffing through September and limiting stock buybacks and dividends and executive pay.
Companies in the United States are rushing to develop easy-to-use, finger-prick blood tests that could be done on the spot in a doctor’s office or a pharmacy clinic and detect the presence of antibodies to the coronavirus within 15 minutes.Companies in the United States are rushing to develop easy-to-use, finger-prick blood tests that could be done on the spot in a doctor’s office or a pharmacy clinic and detect the presence of antibodies to the coronavirus within 15 minutes.
The preferred diagnostic approach involves testing genetic material for the virus extracted from deep nasal swabs. It can take hours or even a day for patients to obtain results, depending on whether specimens must be shipped to a diagnostic lab. The finger-prick blood tests, by contrast, are designed to quickly identify the presence of two antibodies that the body produces in response to the coronavirus.The preferred diagnostic approach involves testing genetic material for the virus extracted from deep nasal swabs. It can take hours or even a day for patients to obtain results, depending on whether specimens must be shipped to a diagnostic lab. The finger-prick blood tests, by contrast, are designed to quickly identify the presence of two antibodies that the body produces in response to the coronavirus.
Chembio Diagnostic Systems, a firm in Medford, N.Y., that has produced rapid tests for Ebola and Zika virus is developing a similar test for coronavirus. Last week, the company received a $4 million order to supply the finger-prick tests for the virus to Brazil’s Ministry of Health and said it also planned to apply for emergency authorization from the Food and Drug Administration to market the tests in the United States.Chembio Diagnostic Systems, a firm in Medford, N.Y., that has produced rapid tests for Ebola and Zika virus is developing a similar test for coronavirus. Last week, the company received a $4 million order to supply the finger-prick tests for the virus to Brazil’s Ministry of Health and said it also planned to apply for emergency authorization from the Food and Drug Administration to market the tests in the United States.
Another company, Scanwell Health, a start-up in Los Angeles that developed an at-home test for urinary tract infections, recently acquired the rights to a finger-stick blood test for the virus developed and approved in China.Another company, Scanwell Health, a start-up in Los Angeles that developed an at-home test for urinary tract infections, recently acquired the rights to a finger-stick blood test for the virus developed and approved in China.
Public health officials in Britain said this week that they were working to validate an at-home virus antibody test that could be made available to millions.Public health officials in Britain said this week that they were working to validate an at-home virus antibody test that could be made available to millions.
Nonprofit organization are ubiquitous in the United States: built on a dream, dedicated to good works, thinly capitalized. And like so much in American life, they have been upended — perhaps temporarily, maybe forever.
Crucial spring fund-raisers and conferences have been canceled. Donors are stretched in many directions, preoccupied with their own problems, and much less flush than they were two months ago. Nonprofit groups that are paid by local governments said new rules against large gatherings were making it impossible to deliver services.
“Everyone is losing revenue, and many have skyrocketing demand. You do the math,” said Tim Delaney, chief executive of the 25,000-member National Council of Nonprofits.
In central New Jersey, it took it took Stephanie Cartier nearly three years to open No Limits, a cafe operated by people with intellectual disabilities. That was early February. It took only a few days in March to close the 65-seat restaurant indefinitely.
Customers dwindled as fears of the coronavirus increased. There was not enough cash coming in to pay the staff.
“It was the first time many of them had a job, and now it’s gone,” Ms. Cartier said. “They didn’t even work long enough for unemployment.”
The United States government is poised to take on a huge amount of debt to contain the effects of the coronavirus pandemic, with budget deficits on a scale not seen since World War II looking likely.The United States government is poised to take on a huge amount of debt to contain the effects of the coronavirus pandemic, with budget deficits on a scale not seen since World War II looking likely.
But the only thing worse for the public debt outlook would be if it didn’t. That’s why a broad range of economic analysts — including even many fiscal conservatives who generally view high public debt as a long-term threat — support aggressive action.But the only thing worse for the public debt outlook would be if it didn’t. That’s why a broad range of economic analysts — including even many fiscal conservatives who generally view high public debt as a long-term threat — support aggressive action.
The very large deficits on the way in 2020 are more likely to leave the United States in a better fiscal situation for the years ahead than an alternative in which the government is more tightfisted but fails to prevent the widespread collapse of American businesses or help workers in desperate financial straits.The very large deficits on the way in 2020 are more likely to leave the United States in a better fiscal situation for the years ahead than an alternative in which the government is more tightfisted but fails to prevent the widespread collapse of American businesses or help workers in desperate financial straits.
Economists focus not on the absolute level of the debt, but on the interest costs to service it relative to the size of the economy. So a prolonged recession tends to be worse for the debt picture than some extra spending. Moreover, signals from financial markets suggest that the government should have little trouble borrowing vast sums of money on favorable terms.
Border lockdowns in Europe are creating a labor shortage on farms, as migrant workers who usually harvest crops are unable to make the necessary trips.
In Britain, farmers are struggling to find people to pick raspberries and potatoes. Part of Germany’s prized white asparagus crop risks rotting in the ground. And in Italy, over a quarter of the strawberries, beans and lettuce due to ripen in the coming months may lack harvesters.
With seasonal workers unable to cross borders, governments have been forced to rethink how to supply farm labor. France’s agriculture minister this week appealed to hairdressers, waiters, florists and others temporarily unable to work to head to the nation’s fields and start picking. More than 40,000 people had applied by Thursday, but 200,000 are needed.
Does the stock market’s nose dive make you want to shift into full retreat — no stocks, no bonds at all?Does the stock market’s nose dive make you want to shift into full retreat — no stocks, no bonds at all?
It’s an understandable reaction. But recognize this: Getting out of stocks and bonds may shelter you from market volatility, but the alternatives carry risk, too.It’s an understandable reaction. But recognize this: Getting out of stocks and bonds may shelter you from market volatility, but the alternatives carry risk, too.
And decisions about how to allocate your money always depend on where you are in life. If you’re young, sticking to an investment allocation of both equities and income makes sense. If you’re older, shifting your portfolio to include more bonds and less stock can be a good move.And decisions about how to allocate your money always depend on where you are in life. If you’re young, sticking to an investment allocation of both equities and income makes sense. If you’re older, shifting your portfolio to include more bonds and less stock can be a good move.
The coronavirus could cause job cuts of more than one million workers in the global oil field services industry, according to a forecast from Rystad Energy. The Norway-based consulting firm estimated that the industry employs more than five million people, including drillers, engineers and technicians, and that firms will cut people because of plummeting demand, low prices for oil and safety reasons.The coronavirus could cause job cuts of more than one million workers in the global oil field services industry, according to a forecast from Rystad Energy. The Norway-based consulting firm estimated that the industry employs more than five million people, including drillers, engineers and technicians, and that firms will cut people because of plummeting demand, low prices for oil and safety reasons.
The average national price for gasoline fell on Friday to a penny under $2 a gallon for the first time since March 2016, according to GasBuddy, the travel and navigation app. Gasoline prices have been falling steadily since late February as the coronavirus outbreak has curtailed business and leisure driving.The average national price for gasoline fell on Friday to a penny under $2 a gallon for the first time since March 2016, according to GasBuddy, the travel and navigation app. Gasoline prices have been falling steadily since late February as the coronavirus outbreak has curtailed business and leisure driving.
Lockheed Martin announced on Friday that it would advance $50 million to small and medium-size businesses in its supply chain to keep them solvent as the coronavirus devastates the national economy.Lockheed Martin announced on Friday that it would advance $50 million to small and medium-size businesses in its supply chain to keep them solvent as the coronavirus devastates the national economy.
Cheesecake Factory said Friday it had furloughed 41,000 hourly workers, who won’t be paid but will keep benefits until June 1. They will also be offered one free meal a day at their restaurant. Pay for corporate and administrative employees has been cut by 10 to 20 percent.Cheesecake Factory said Friday it had furloughed 41,000 hourly workers, who won’t be paid but will keep benefits until June 1. They will also be offered one free meal a day at their restaurant. Pay for corporate and administrative employees has been cut by 10 to 20 percent.
Kroger said it had provided new jobs to more than 23,500 workers in the United States and planned to hire an additional 20,000 in the next few weeks to meet demand for food and supplies. The company said it had expedited its hiring process, which now takes an average of 72 hours.Kroger said it had provided new jobs to more than 23,500 workers in the United States and planned to hire an additional 20,000 in the next few weeks to meet demand for food and supplies. The company said it had expedited its hiring process, which now takes an average of 72 hours.
Reporting was contributed by Stanley Reed, Clifford Krauss, David E. Sanger, Niraj Chokshi, Natasha Singer, David Streitfeld, Mary Williams Walsh, Vindu Goel, Amie Tsang, Carlos Tejada, Kevin Granville and Daniel Victor. Reporting was contributed by Stanley Reed, Clifford Krauss, David E. Sanger, Niraj Chokshi, Natasha Singer, David Streitfeld, Daisuke Wakabayashi, Mary Williams Walsh, Vindu Goel, Amie Tsang, Carlos Tejada, Kevin Granville and Daniel Victor.