In this file:
· The new coronavirus economy: A ‘gigantic experiment’ reshaping how we work and live
· 30 days that brought the world to the brink of a depression
The new coronavirus economy: A ‘gigantic experiment’ reshaping how we work and live
By Craig Timberg, Drew Harwell, Laura Reiley and Abha Bhattarai, The Washington Post
March 21, 2020
Ferrell Alvarez and Ty Rodriguez closed their restaurants in Tampa’s trendy Seminole Heights neighborhood last week. But they have a plan for riding out the coronavirus outbreak: Building a takeout business of fried chicken sandwiches and gnocchi with short ribs for Floridians hungry for comfort food amid a global crisis.
“Tuesday was the most dreadful day for me. I was crying,” Alvarez said. “The next morning I created our concept.”
As the pandemic takes hold across America, some businesses are getting crushed, like Powell’s Books in Portland, Ore., which closed its doors for at least eight weeks. Others are thriving, like Amazon, which announced 100,000 new hires to help manage the rush off online orders. Still others, like Tampa’s Rooster & the Till restaurant, are adapting — in ways that, economists say, might lead to long-term shifts in how Americans spend, work and live.
The pandemic has been a relentless destroyer of brick-and-mortar businesses as public health officials warn against in-person interactions. But the coronavirus is boosting almost anything that can be done online or with minimal human contact — grocery deliveries, online learning, takeout food, streaming video, even real estate closings done with online notaries.
The result, economists say, is likely to be dramatic losses in local retail and dining options, with millions of jobs disappearing as the biggest and wealthiest companies — especially those that do much of their business online — extend their gains. Telework, online education and streaming video already have grown sharply, while movie theaters, schools and traditional workplaces close their doors. Some will never reopen in a world where the shift from real to virtual suddenly has gone into overdrive.
While some economists caution these shifts may be temporary, others see long-term changes taking hold.
“People will change their habits, and some of these habits will stick,” said Susan Athey, an economics of technology professor at Stanford Graduate School of Business. “There’s a lot of things where people are just slowly shifting, and this will accelerate that.”
The impacts of the coronavirus are cutting across the nation’s more than $20 trillion economy, closing down sports leagues and art venues, canceling concerts and funerals, and shuttering bars, boutiques, restaurants and toy stores.
Even before the crisis, retailers last year announced a record 9,300 store closures amid widespread bankruptcy filings. As the growing pandemic forces companies like Apple, Nordstrom and Macy’s to close thousands of stores temporarily, analysts say they are bracing for a monumental shift: Deborah Weinswig, head of the retail analyst Coresight Research, said more than 15,000 stores are likely to announce closures this year.
The virus also could exacerbate an already widening gap between the country’s most successful retailers — giants such as Amazon, Walmart, Target and Costco — and the rest of the industry. Companies selling groceries and staples are thriving, while the rest are barely hanging on, a dynamic analysts say is likely to become even more pronounced as economic conditions worsen.
Amazon’s 100,000 new jobs are for warehouse workers and drivers. Walmart, meanwhile, is adding 150,000 positions to...
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30 days that brought the world to the brink of a depression
By Charles Riley, CNN Business
March 21, 2020
London (CNN Business)Monday, February 17. The novel coronavirus outbreak is raging in China, but fewer than 1,000 people have been infected outside the country. With the virus out of sight and mostly out of mind, the Dow Jones Industrial Average stands just shy of 30,000 points, driven by the longest US economic expansion in history.
What investors couldn't know is that over the next 30 days, the coronavirus would burst out of quarantine in China, with major outbreaks in South Korea and Italy, then Spain, France, Germany, the United Kingdom and the United States. It brought business to a sudden stop, sent stock markets into a meltdown and forced central banks to take emergency action on a scale even greater than during the 2008 global financial crisis.
A global recession, once unthinkable in 2020, is now a foregone conclusion and some experts warn that the pandemic could drag the world's economy into a depression. More bad news: The coronavirus outbreak may just be getting started.
Central banks and governments are now unleashing a tsunami of interest rate cuts, loan guarantees and new spending, tapping emergency powers to reassure investors, cushion the shock to companies and workers and preserve the foundations of a functioning economy for the future.
In the United States, the Trump administration is asking Congress to approve a rescue bill that would inject $1 trillion into the economy to prevent mass layoffs as huge swaths of the world's biggest economy shut down and airlines, hotels and restaurants run out of cash. In an extraordinary move, the UK government on Friday said it would pay 80% of the wages of anyone at risk of losing their job because of the pandemic.
Yet the rescue efforts may already be too late. Goldman Sachs estimates that 2.25 million Americans filed for unemployment benefits this week — that would be the biggest number on record. Meanwhile, the number of coronavirus cases marches higher. The global number of infections has topped 270,000, and more than 11,000 people have been killed worldwide. Spain, Italy, France and the United Kingdom are under partial or complete lockdowns. California, which boasts the world's fifth largest economy, has directed 40 million people to stay at home.
"The coronavirus has created unprecedented financial and societal disruption," David Kostin, chief US equity strategist at Goldman Sachs, said this week.
Most exposed to the fallout are businesses and workers in transport, the energy industry and hospitality as international aviation shuts down, oil consumption collapses and pubs, bars and restaurants are ordered to close.
"In the worst case, entire industries could be destroyed," Moody's Investor Services said in a note on Friday.
While the pandemic is still unfolding, economists are already thinking about how it will change the world. Many expect significant shifts in how supply chains are constructed and how global trade is conducted. The merits of capitalism, democratic systems of government and globalization are likely to come under intense scrutiny.
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