Dear CP client,
Happy Friday! The month of May has arrived, and many unknowns remain with the COVID-19 pandemic and the resulting global economy. All-the-while, we continue to send our best wishes and support to each of you and your family.
New Economic and Health News:
- U.S. economy shrinks 4.8% in first quarter:This is the biggest quarterly drop in over a decade (with most of the impact occurring in the last month of the quarter) and shows the beginning of an economic slowdown that’s expected to get worse as the pandemic impacts the economy. The Federal Reserve will do whatever it takes for as long as it takes to support the economy, but how quickly the world can return to some semblance of normal will be the real determinant.
- 30 million Americans became unemployed over the last six weeks: Economists forecast an unemployment rate of more than 20% over the next few months. While the pace of jobless claims is slowing, state unemployment funds are reportedly running out.
- Remdesivir (an existing virus treatment) could reduce hospital stays for COVID-19 patients:This would be a positive step forward and the FDA intends to fast-track approval.
- Pending home sales tank nearly 21% in March: Signed contracts to buy existing homes, referred to as pending home sales and used as a metric of economic health, fell 20.8% compared with February and were 16.3% lower annually, according to the National Association of Realtors.
- Meat prices are 15% higher than last year:Social distancing measures in slaughterhouses will keep supply down and prices high. Shutdowns at major processing plants started in early April. Even though it was just about a dozen closures, a few very large processors do most of the work, so that leaves few remedies when even a handful of facilities are down. This is yet another supply chain that will be re-examined. The good news? There is plenty of chicken and fresh vegetables.
- Google and Microsoft reported strong earnings but Amazon told investors that they are spending all their profits on personal protective equipment (PPE) for workers and building their own Covid-19 testing capability, and their lower profit forecast is driving some of today’s market decline. Amazon is known for prioritizing long-term business advantages over short-term gains. Kraft Heinz, Kellogg, and other makers of comfort foods with long shelf lives reported strong gains in sales.
How our lives will be changing:
- 2020 will be the YEAR OF THE CAR: Experts say that travelers will be ready to return to domestic road trips in their cars sooner than they will begin to fly again. It is possible that recovering European countries could turn away Americans for a time since they lag on the virus curve and different parts of the US are harder hit than others. In a throwback to earlier times, more people will be packing their own food in coolers, and camping may become more popular again to distance the family from crowds. The sharing economy, embodied by AirBnB, Uber and WeWork, is in deep trouble due to the coronavirus pandemic.
- Whether in an airplane or the mall, people can expect that an opened-up world will involve more intrusive security measures and surveillance. We may be forced to be more bio-secure, because one person’s infection can infect an entire community. All the new coronavirus protocols that companies are considering for their workers and customers — from contact tracing and temperature-taking to heat mapping and "immunity passports" — have privacy and civil liberties implications.
- There may be resistance to these security measures. While there's evidence that people are less concerned with privacy than before the pandemic hit — and more concerned with health — they still may not be ready for a world where their blood is tested for antibodies before boarding an airplane, as Dubai-based Emirates airlines has started doing. In the US, Delta is considering “immunity passports" that would be required for boarding, while Chile is already issuing these documents.
Locally in Ohio, the most recent Director’s Stay Safe Ohio Order gives us an idea of how this month will operate in our state. The Clear Perspectives team continues to work remotely and will maintain safe operations while providing the level of service that our clients expect. We appreciate everyone’s understanding as we’ve managed these changes and want to remind you that we are available for communications, calls, and virtual meetings any time you have a question or would like to meet.
Stay safe and enjoy your weekend. During these challenging times, we trust that all of you have found new meaning. We look forward to talking with you soon!
Carol & Tim and your Clear Perspectives team