The outbreak of the coronavirus has dealt a shock to the global economy with unprecedented speed. Following are developments on Friday related to the global economy, the work place and the spread of the virus.
COSTS MOUNT: The pandemic will cost the global economy as much as $4.1 trillion, or nearly 5% of all economic activity, according to new estimates from the Asian Development Bank.
The head of the International Monetary Fund said the recession sparked by the coronavirus pandemic is “way worse” than the 2008 global recession. At a press briefing in Geneva on Friday, IMF managing director Kristalina Georgieva described the situation as “a crisis like no other.”
AIRLINES: Delta Air Lines, American Airlines, United Airlines, Southwest and JetBlue said they applied Friday for their share of $25 billion in federal grants designed to cover airline payrolls for the next six months. None disclosed the amount they are seeking.
The grant money was part of $2.2 trillion relief bill approved last week. Delta’s CEO says his airline is burning more than $60 million cash per day, and United’s president puts it at $100 million a day. Airline revenue has cratered during the coronavirus outbreak. Delta carried 38,000 passengers last Saturday. On a normal Saturday in late March it flies 600,000.
The number of travelers screened Thursday at airports nationwide was 124,000, a 95% drop from the same day last year.
And the global airline industry passed a milestone Friday: Half of all passenger jets are now grounded as airlines cut flights sharply. Aviation-data firm Cirium said that with another 530 parked since Thursday, there are now 12,635 jets in service and 13,655 grounded. The number of commercial flights is down 75%.
SMALL BUSINESS: More than $875 million in loan applications had been processed through the new small business loan program, Treasury Secretary Steven Mnuchin said via Twitter, “almost all from community banks!” Mnuchin said in that tweet that big banks were also taking applications and would be submitting them shortly. However, there were signs that the program is off to a rough start.
CROWD CONTROL: Walmart still wants customers, just fewer of them at a time. The nation’s largest retailer said it will now allow no more than five customers for each 1,000 square feet at a given time, roughly about 20% of the average store’s capacity. To oversee the restriction, workers will mark a queue at a single-entry door, and direct arriving customers there, where they’ll be admitted one by one. Walmart joins others in trying to limit the number of customers in the store to curb the spread of the coronavirus.
HEAVY INDUSTRY: Toyota is halting production at five of its 18 plants in Japan as sales evaporate. The stoppage will last three days for most of the plants, but one plant will close until mid-April. The affected plants produce vehicles for export, including Lexus luxury models and the Prius hybrid. Other Japanese automakers, such as Honda Motor Co., have also suspended production.
The U.S. auto industry is completely shut down.
MARKETS: U.S. stocks fell Friday, leaving the S&P 500 down 26.5% since its record set in February.
The losses came after the government reported that U.S. employers cut 701,000 jobs in March, the monthly decline in nearly a decade. Because of the timing of the spread of COVID-19, the March report did not capture the extend of the damage.
