Business Briefs – March 19, 2020

A Cruel Paradox: Beating Virus Means Causing U.S. Recession

WASHINGTON (AP) — The coronavirus is dealing a death blow to the longest U.S. economic expansion on record, triggering layoffs and putting intense strain on the financial system. In a cruel paradox, the steps needed to contain the outbreak — quarantines, travel restrictions and business closures — are bringing everyday business to a halt and pushing the U.S. economy into recession for the first time since 2009. Much will depend on how swiftly and aggressively the Federal Reserve, Congress and the Trump administration deliver financial aid to tens of millions of economic victims — from hourly workers with no more income to suddenly furloughed employees to businesses with loans to pay but no customers. Solving the health crisis by shutting down the economy, though, will have to come first.

Coronavirus Layoffs Spark Surge In State Jobless Claims

JEFFERSON CITY, Mo. (AP) — Applications for jobless benefits are surging in some states as coronavirus concerns shake the U.S. economy. The sharp increase comes as governments have ordered millions of workers, students and shoppers to stay home as a precaution against spreading the virus that causes the COVID-19 disease. In some states, the demand for help may outstrip the ability to pay claims. The U.S. Labor Department says 21 states began the year with unemployment insurance fund balances below the levels recommended to stay solvent in a recession. States are expected to get some help from the federal government.

Automakers Shut North American Plants Over Coronavirus Fears

DETROIT (AP) — Ford, General Motors, Fiat Chrysler, Honda and Toyota confirm they will temporarily shut down all of their North American factories due to the coronavirus threat. Ford said its plants will close after Thursday evening shifts, through March 30, while GM’s closures will start today and take several days to finish. Closures also will last through March 30. Honda plants will close for about a week starting Monday, while Toyota will close for two days next week. The move by Detroit’s three automakers will idle about 150,000 workers. They likely will receive supplemental pay in addition to state unemployment benefits. The two checks combined will about equal what the workers normally make.

FDIC Warns of Scams Saying Banks in Trouble From Outbreak

NEW YORK (AP) — One of the nation’s bank regulators is urging Americans not to withdraw large sums of cash and to beware of fraudsters claiming that banks are limiting customers’ access to their money. The Federal Deposit Insurance Corporation issued a statement Wednesday warning about an increase in scams trying to sow distrust in the U.S. financial system while the nation is dealing with the fallout of the coronavirus pandemic. The agency says it has seen an uptick in calls, text messages, letters and emails from scammers pretending to be FDIC employees and trying to gain access to bank account and other personal information.

Federal Express Will Not Require Signature for Most U.S. Deliveries

NEW YORK (Hamodia) – Due to the coronavirus crisis, Federal Express, the package delivery company which handles on an average day well over 3 million packages, will not require you to physically sign for most deliveries made in the U.S. This is being instituted to help prevent the spread of COVID-19.

The company has publicized their “Safety Above All” program since the outbreak of the coronavirus, and the announcement is the latest in a series of steps to reduce the spread of the virus.

U.S. Fed Establishes Currency Swaps With 9 Central Banks

Washington (AP) — The Federal Reserve has set up a program to exchange dollars for foreign currency with nine central banks to support dollar lending in global markets that are under pressure from the impact of the viral outbreak.

The move, announced Thursday, enables foreign banks to provide dollars to their banks that sometimes lend and trade in US currency.

It is the latest effort by the Fed to smooth the functioning of financial markets, as investors, banks, and companies rush to stockpile cash amid plunging stock markets and a sharply slowing economy. Late Wednesday, the Fed also reactivated its third lending facility dating from the financial crisis intended to provide more cash to banks in the form of short-term loans.

U.S. Mortgage Rates Climb This Week; 30-Year Loan at 3.65%

WASHINGTON (AP) — U.S. long-term mortgage rates climbed this week in a whip-sawing market amid deepening anxiety over devastation to the economy from the coronavirus pandemic.

Home loan rates had hit all-time lows two weeks ago. Mortgage buyer Freddie Mac reported Thursday that the average rate on the benchmark 30-year loan jumped to 3.65% this week from 3.36% last week.

Freddie Mac said the short-term rise was due to mortgage lenders increasing prices to deal with booming demand for refinancing into loans at historically low rates.

The average rate on the 15-year fixed-rate mortgage rose to 3.06% from 2.77%.