Economists Agree: No Quick Rebound From Recession Is Likely
WASHINGTON (AP) — Devastated by the coronavirus, the U.S. economy is sinking. And the plunge is accelerating.
Now, as some businesses in a few states start to trickle back to work, hopes are beginning to arise that the economy, damaged as it is, might be poised to rebound by the second half of the year. If more employees and consumers were to gradually return to working and spending, the idea goes, the economy might be able to mount a sharp comeback.
Yet most economists have the same response: Keep such expectations in check.
Among their concerns is that the coronavirus could flare up again after the economy is re-opened, forcing reopened businesses to shut down again. Another is that people — employees and consumers alike — will remain too wary of contracting the coronavirus to return to anything resembling normal economic behavior. If that were the case, no meaningful economic recovery would likely take hold.
The U.S. economy shrank at a 4.8% annual rate in the January-March quarter, the government estimated Wednesday, as the coronavirus pandemic shut down much of the country and began triggering a recession that will end the longest expansion on record.
Lyft to Lay Off 17% of Staff
(The Washington Post) – Lyft is laying off 17% of its staff, the company announced Wednesday, after the coronavirus crisis wrought havoc on the ride-hailing business and cut substantially into its revenue.
The layoffs will amount to nearly 1,000 jobs. In an email to the company’s thousands of employees, chief executive Logan Green announced the “difficult news,” including the furloughing of 5% of the staff and reducing salaries for three months.
“The COVID crisis has taken an enormous toll on the entire world,” he wrote. “Our guiding principle for decision-making is to ensure we emerge from the crisis in the strongest possible position to achieve the company’s mission.”
Boeing to Cut 10% of Work Force As 1Q Revenue, Profit Slide
(AP) – Boeing outlined plans Wednesday to cut about 10% of its workforce, slow production of new planes and raise more cash to survive a downturn in business that started with the grounding of its best-selling jet and has accelerated with a deep slump in air travel caused by the coronavirus pandemic.
Executives said the job cuts would be accomplished through attrition, paying people to leave, and layoffs.
Boeing announced the moves as it reported a first-quarter loss of $641. It earned $2.15 billion in the same period last year. Revenue fell 26%, to $16.91 billion.
Pandemic Brings Fortunes to Amazon — and Headaches Too
(AP) – Amazon has spent years honing the business of packing, shipping and delivering millions of products to doorsteps around the world.
Now it has a captive audience.
With much of the globe in various stages of a lockdown because of the coronavirus pandemic, the world’s largest online retailer has become a lifeline to many shoppers. But it is also grappling with delivery delays and mounting complaints from workers who worry about contagion while on the job.
The company’s website hit 2.54 billion visitors for the entire month of March, according to online research company Comscore. That marks a 65% jump from the same period last year. Amazon will report quarterly earnings on Thursday, providing a first glimpse into its financial performance during the pandemic.
Microsoft’s Cloud Business Helps Offset Pandemic Woes
REDMOND, Wash. (AP) — Ongoing demand for Microsoft’s cloud computing services help softened the blow of the coronavirus pandemic on the software giant’s other products during the first three months of the year.
The company on Wednesday reported fiscal third-quarter profit of $10.75 billion, up 22% from the same period last year. Net income of $1.40 per share beat Wall Street expectations of $1.27 a share.
The software maker posted revenue of $35.02 billion in the January-March period, up 15% from last year. Analysts had been looking for revenue of $33.8 billion, according to FactSet.
Fitch Cuts Italy’s Gov’t Debt Grade
(AP) – Ratings agency Fitch cut Italy’s government debt grade, the first downgrade to a major economy to reflect the surge in public debt that is expected to hit countries dealing with the vast costs of the coronavirus lockdown. Fitch expects the outbreak to shrink the Italian economy by 8% this year and that there’s a risk of a deeper downturn.
U.S. Pending Home Sales Sank 20.8% in March
BALTIMORE (AP) — U.S. home sales showed signs of collapsing in March, as the number of contract signs plunged sharply because of the coronavirus outbreak.
The National Association of Realtors said Wednesday that its pending home sales index, which measures signed buyer contracts, plummeted a seasonally adjusted 20.8% in March from the prior month to a reading of 88.2. That is the lowest level since May 2011, when the housing market was still dealing with foreclosures and crashing prices from the Great Recession. Pending sales have fallen 16.3% from a year ago.