The government aid rolled out to small and medium-size enterprises, which was exhausted after only 13 days, has been problematic at best; at worst, if not changed, it will lag the survival period of many struggling businesses. The U.S. government framework is going to have to be enlarged, include more generous terms for participation and ensure that aid flows to far more smaller firms than the current oversubscribed program has accomplished to date. … READ MORE >
Economics
Bending the curve, reopening for business and avoiding the policy errors of the 1918-19 pandemic
Deaths attributed to the Covid-19 pandemic continue to mount, and data confirms that social distancing and a rigorous system of testing and tracing are necessary to slow the spread of the disease, and are working to mitigate the health crisis. Recent modeling work suggests that the slow adoption of social distancing practices as public policy and the concurrent slow adoption by individuals has increased the death toll in the United States, and will continue to do so until a vaccine or treatment regimen is developed. … READ MORE >
Paycheck Protection Program: Demand for aid far outstrips policy package
The Small Business Administration’s Paycheck Protection Program, the signature policy response to provide bridge financing to small firms with fewer than 500 employees in one location, has exhausted the first $350 billion tranche in aid provided by Congress and the Trump administration. … READ MORE >
Most states report drops in initial jobless claims, but totals remain staggering
The number of newly out-of-work employees moved lower in the last week in all but four states, but the totals remain extremely high. … READ MORE >
RSM Monthly Index of Economic Activity turns negative for first time since Great Recession
The RSM Monthly Index of Economic Activity is pointing toward negative real GDP growth for the first time since the Great Recession of 2008-9. Our index of underlying economic activity has been pushed over the edge by what could be a seminal shift in the labor market and a structural break in the economy brought on by the outbreak of the coronavirus. … READ MORE >
Initial jobless claims point to near real-time unemployment rate of 18.1%
The slow-motion train wreck of weekly initial U.S. jobless claims continued as data for the week ending April 11 produced an additional 5.245 million applications, implying a near real-time unemployment rate of 18.1% at a minimum. Once one adds in those not captured by the data, we are almost certainly facing a 20% unemployment rate now. … READ MORE >
Retail sales declined 8.7% in March, with more distress to come
The condition of the American consumer is impaired and will be for some time. The combination of soaring unemployment and shelter-in-place policies across the economy sent U.S. retail sales down 8.7% in March. … READ MORE >
Companies tap $247.5 billion in loans under Paycheck Protection Program
Small to midsize business seeking relief from economic woes due to the Covid-19 pandemic have tapped $247.5 billion from the government’s Paycheck Protection Program through April 13, according to data released by the Small Business Administration on Tuesday. … READ MORE >
What lenders know about the Main Street Lending Program, and the questions that remain
Within moments of the announcement of the Main Street Lending Program, many lenders began to pour through the term sheets published by the Federal Reserve. While some answers were provided, further details are needed. Here is what we know. … READ MORE >
When to reopen the economy? Beware of a false optimism surrounding coronavirus.
The outbreak of the coronavirus surpassed 450,000 reported cases of infection and 1,900 deaths per day in the United States. Our RSM model of the Covid-19 spread extrapolates a half million infections and more than 15,000 deaths by this coming weekend. … READ MORE >