The outbreak of the coronavirus has dealt a shock to the global economy with unprecedented speed. Following are developments Friday related to the global economy, the work place and the spread of the virus.
CENTRAL BANKS AND GOVERNMENT: The coronavirus pandemic has skewered almost all economic models.
— Finland has slashed growth expectations. After projecting a 1% GDP expansion in 2020 GDP late last year, it now anticipates a contraction of at least 5.5%. Finnish economists say that retreat could hit 12% if lockdowns continue for another six months.
— The International Monetary Fund has given Pakistan $1.5 billion in emergency financing to bolster its sagging economy. Pakistan has issued 12,000 rupees (roughly $70) to more than 10 million families hit hardest by a month-long lockdown.
— India’s central bank reduced its interest rate by 25 basis points, from 4% to 3.75%. The Reserve Bank of India expects a sharp turnaround, with its growth trajectory hitting 7.4% in 2021-22.
SOCIAL MEDIA DISTANCING: Social media companies have actively sought to quash misinformation that has led to dangerous behavior. This while the pandemic disrupts internal operations across the tech sector.
— Facebook employees will work remotely until at least the end of May. CEO Mark Zuckerberg said in a post that employees who feel they can’t return to offices will be allowed to work remotely through at least the summer.
— Apple shares sank Friday after Goldman Sachs cut its outlook for the company for the third time and recommended clients get rid of the stock. “We are now modeling a deeper reduction in unit demand through mid 2020 and then a shallower recovery into early 2021,” wrote analyst Rod Hall. Goldman believes services growth will slow substantially in 2021 and as a percentage of revenue will actually stagnate.
Apple has begun to rely heavily on services as sales of pricey iPhones slow, particularly during the pandemic. The company last week released a cheaper iPhone that may resonate more with cash-strapped households.
— Digital news publisher Vox Media, which is furloughing about 100 people, or 9% of its staff, without pay from May to July, and is cutting pay temporarily between 15% and 25% for those who earn at least $130,000. Salaries for both its CEO and president will be cut in half. The company, which publishes New York magazine and blogs including Vox, Eater and SB Nation, expects revenue declines in the tens of millions.
RETAIL PAIN: Darkened storefronts tell the story of what has happened to the retail sector and emerging economic data paints an even darker picture.
— In a letter to Congress, the Retail Industry Leaders Association, which counts among members Best Buy, Walmart and The Gap, asked Congress to allow furloughed and laid off retail workers to accept part-time work shifts without a reduction in state unemployment benefits.
The association, along with more than 30 industry groups including the National Retail Federation, and the American Booksellers Association, are also seeking a federally-backed fund to provide relief to companies and workers.
“If we haven’t stabilized the (retail) industry, there isn’t going to be an economic recovery,” said Tom McGee, CEO of the International Council of Shopping Centers.
THE CAR BIZ: Manufacturing has come to a standstill and it is unknown when major industrial players will be able to restart plants.
— Ford Motor Co. now expects to post a $2 billion first-quarter loss. The automaker has enough cash to get through the end of September even if production doesn’t resume. Ford’s U.S. factories have been shut down for about four weeks, cutting off the company’s main source of revenue. It is hoping to restart factories in the second quarter.
WORK IN A TIME OF PANDEMIC: The outbreak has disrupted the labor force in unprecedented ways, damaging livelihoods as well as supply chains.
— European Union countries are flying in migrants for the spring harvest. Portugal is encouraging college students and laid-off people to till the soil during the pandemic. The Farm Ministry noted Friday that students already get tax breaks if they work during summer vacation and that they could provide a stopgap for any labor shortage.
— Four employees tied to a Tyson Foods poultry plant in southwest Georgia have died of complications from COVID-19. Three of the employees worked at a plant in Camilla, while the fourth person worked in a supporting job outside the plant, said spokesman Gary Mickelson. Two other Tyson Foods workers have died from the virus at its plant in Columbus Junction, Iowa, he said.
MARKETS: Stocks around the world rose on Friday as investors latched onto strands of hope about progress in the fight against the coronavirus.
PANTRY KING: Procter & Gamble posted its biggest revenue spike in decades Friday. The company makes Bounty paper towels, Charmin tissue and other household goods suddenly in high demand as billions of people shelter at home.
First quarter organic sales jumped 10% in the U.S., and 6% globally.