Apr 3, 2020 - Economy & Business

What's next in the economic battle against coronavirus

Dion Rabouin, author of Markets

Illustration: Aïda Amer/Axios

Thursday's initial jobless claims reading has made clear that the scope of U.S. job losses as a result of the COVID-19 outbreak will be significant, but what comes next is still very uncertain.

Driving the news: Lawmakers are divided on whether to push forward immediately with a "phase 4" relief bill to back up the $2.2 trillion CARES Act, and concern already is growing about provisions in that legislation.

  • A day before the Small Business Administration's $350 billion program to provide capital to small businesses was set to launch, many banks and lenders tasked with funding the loans and approving applicants — including JPMorgan, the biggest U.S. bank — said they still didn't have the necessary information to participate on time.
  • This could significantly delay funding to small firms and mean the difference between staying in business and shutting their doors.

Threat level: Small businesses have led the way in layoffs, and more than 6.6 million people filed initial jobless claims last week, doubling the record for claims that was set the previous week.

In addition to an unemployment rate that economists estimate has reached 10% and could more than double by the end of the month, conditions are consistently worsening in credit markets.

  • This has been the fastest two-week pace of downgrades on record, dating back to 2002, Bank of America Global Research notes, with net downgrades totaling $560 billion in March.
  • S&P Global said in a note it expects a "surge in the corporate speculative-grade default rate to above 10% in the U.S."

What we're hearing: Claudia Sahm, a former Treasury Department official and senior economist at the Fed, tells Axios she "firmly expects" job losses to continue on their current trajectory through the end of April.

  • "It’s going to be important in the decisions Congress makes in the coming weeks that they commit to stay the course through the recovery," says Sahm, who now serves as director of macroeconomic policy at the Washington Center for Equitable Growth.
  • "One relief package isn’t [enough], and there’s so many things they need to do in the next round."

State of play: "This has been an amazing policy response from many countries, both on the monetary and fiscal front," Laurence Boone, chief economist for the OECD, said during a teleconference Thursday.

  • Yet, she warns, "they have lacked coordination on many fronts."

Go deeper: Coronavirus has left us with nothing good to say about the economy

Go deeper

Black workers overrepresented in essential work during coronavirus pandemic

Reproduced from Economic Policy Institute; Chart: Axios Visuals

On a percentage basis more white workers have lost their jobs since February, but that has largely been because black workers in the U.S. are much more likely to work front-line jobs considered essential during the coronavirus pandemic.

By the numbers: Black workers make up about one in nine workers overall, but about one in six front-line-industry workers, according to a study from the Center for Economic and Policy Research.

South Korea and Taiwan show stifled consumer demand after coronavirus lockdowns

People walking through a park in Seoul on May 24. Photo: Ed Jones/AFP via Getty Images

Looking at the economies of South Korea and Taiwan leads to a discomforting takeaway: "Reopening isn’t going to be an economic cure-all," Matthew C. Klein writes for Barron's.

What it means: "Both countries contained the virus better than the U.S., yet consumers in those countries remain reluctant to spend and venture out," Klein notes.

Apr 27, 2020 - Health

The hospitals that have disclosed bailout funds so far

Mayo Clinic has received $220 million in CARES Act funding as of May 15. Photo: Cliff Hawkins/Getty Images

More than $8 billion in federal bailout funds have been disclosed by hospitals and health systems as of June 3, according to an Axios review of financial documents.

Why it matters: Hospitals do not have to repay these taxpayer funds, which are supposed to offset the lost revenue and higher costs associated with handling the coronavirus outbreak. HHS has released two datasets on the bailout money — one on the general allocation and another on the money that went to coronavirus hotspots — but the general allocation one is incomplete.