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Data: Datastream, Worldscope, DB Global Research; Chart: Axios Visuals

The number of so-called zombie companies is spiking and could soon represent more than one in five U.S. firms, thanks to the coronavirus pandemic.

What it means: "Zombies" are firms whose debt servicing costs are higher than their profits but are kept alive by relentless borrowing.

What they're saying: "This is a macroeconomic problem because zombie firms are less productive, and their existence lowers investment in and employment at more productive firms," Deutsche Bank Securities chief economist Torsten Sløk said in a note to clients Thursday.

  • "In short, one side effect of central banks keeping rates low for a long time is that it keeps more unproductive firms alive, which ultimately lowers the long-run growth rate of the economy."

What's next: "This trend ... is likely to continue going forward given the Fed’s commitment to keeping rates low and the ongoing support from the Fed to credit markets."

Go deeper: Corporate debt issuance has already topped $1 trillion in 2020

Go deeper

Sep 22, 2020 - World

Study: China's economic policies directly harmed U.S. industries

Illustration: Eniola Odetunde/Axios

China's economic planning and targeted subsidies have increased the competitiveness of Chinese firms in the global economy to the direct detriment of U.S. industry, an academic study has found.

Why it matters: When it comes to American industries and workers, the rise of Chinese industrial policy hasn’t been a win-win — researchers found for every 100 factories opened in China, 12.5 U.S. factories in the same industry closed.

Dion Rabouin, author of Markets
2 hours ago - Economy & Business

The fragile recovery

Data: Department of Labor; Chart: Axios Visuals

The number of people receiving unemployment benefits is falling but remains remarkably high three weeks before pandemic assistance programs are set to expire. More than 1 million people a week are still filing for initial jobless claims, including nearly 300,000 applying for pandemic assistance.

By the numbers: As of Nov. 14, 20.2 million Americans were receiving unemployment benefits of some kind, including more than 13.4 million on the Pandemic Unemployment Assistance (PUA) and Pandemic Emergency Unemployment Compensation (PEUC) programs that were created as part of the CARES Act and end on Dec. 26.

Ben Geman, author of Generate
3 hours ago - Politics & Policy

The top candidates Biden is considering for key energy and climate roles

Photo: Alex Wong/Getty Images

Senate Minority Leader Chuck Schumer (D-N.Y.) has urged President-elect Joe Biden to nominate Mary Nichols, chair of California's air pollution regulator, to lead the Environmental Protection Agency, Bloomberg reports.

Why it matters: The reported push by Schumer could boost Nichol's chances of leading an agency that will play a pivotal role in Biden's vow to enact aggressive new climate policies — especially because the plan is likely to rest heavily on executive actions.