Supply chain In a very short period of time, the COVID-19 outbreak has had a significant impact on economies throughout the world and across all industries and sectors. The earliest stages of the U.S. consumer supply chain are heavily dependent upon China. That means the work stoppage caused by the virus ... READ MORE >
coronavirus
Bank of Canada lowers policy rate in response to health crisis
The Bank of Canada on Wednesday reaffirmed its commitment to the G-7 to address the threat to the economic growth posed by the outbreak of the coronavirus. Canada’s central bank moved aggressively to drop its policy rate by 50 basis points, to 1.25%, following action taken by the Federal Reserve on ... READ MORE >
Jobs report preview: Last estimate before coronavirus impact
We expect an increase of 178,000 in total employment when the Bureau of Labor Statistics releases its first estimate of nonfarm payrolls on Friday, with the unemployment rate holding steady at 3.6%. Before the global public health emergency, hiring was slowing in transport, trade, manufacturing and ... READ MORE >
Initial unemployment claims, coronavirus and recession probabilities
Over the next few weeks, policymakers will receive high frequency data that will capture supply and demand shocks that are going to cascade throughout the economy. The most important is the initial jobless claims data that will most likely reflect job losses in trade and transportation – disruptions that ... READ MORE >
As coronavirus spreads, demand destruction will set in
Most economic analysis around the impact of the coronavirus has centered on supply shocks, but little has been said about demand destruction. We are now beginning to observe some demand destruction around the public health crisis, and we expect that this will be the major narrative once data begins to ... READ MORE >
The Fed cut its policy rate by a half percentage point. Expect more to come.
The Federal Reserve on Tuesday reduced its policy rate to a range between 1.0% and 1.25% as the central bank implemented a preemptive cut to bolster financial conditions as the coronavirus continues to spread. The use of monetary firepower is a clear signal to policymakers and investors that there will be ... READ MORE >
Anatomy of a meltdown: Financial markets finally take notice of supply shocks
Financial markets across the international economy are extracting a powerful toll on portfolio valuations amid a volatile landscape. Financial market volatility has reached the point where global central banks will have little choice other than to put into place greater monetary accommodation to bolster ... READ MORE >
Coronavirus reveals vulnerability in the life science supply chain
As the coronavirus continues to spread and the supply shock to the global economy grows, there is increasing concern about how the outbreak could affect the life sciences industry, especially the availability and quality of drugs and medical equipment. U.S. Food and Drug Administration Commissioner ... READ MORE >
ISM manufacturing index declines in February
The Institute for Supply Management’s manufacturing index — a key gauge of U.S. factory activity — dropped to 50.1 in February from 50.9 a month earlier, falling slightly below economists' expectations. Sluggish global growth amid the spread of the coronavirus was a factor in that drop. Figures above ... READ MORE >
Revising growth expectations down because of shocks from coronavirus
We are revising down our 2020 growth forecast because of supply, demand, and financial shocks rippling through the global and U.S. economies amid the spread of coronavirus. While we do not foresee a recession at this time because of expected fiscal and monetary stimulus measures, we believe economic ... READ MORE >