Recession Is More Likely Than a Recovery
August 03, 2020 @ 14:26 +03:00
Employment Rate Points to Recession
One of the most common measures of economic health is employment. When people have jobs, they’re willing to spend—a massive driver of the U.S. economy. The Dallas Fed’s Employment Rate data suggests the bounce back in hiring has leveled off and a recession could be looming.
Mortgage Crisis Piles on Recession Fears
People without jobs struggle to pay their mortgages, so it should come as no surprise that a looming wave of defaults is the second sign of a recession on this list. Already, one in ten Americans with a mortgage have missed a payment due to the crisis. Sixteen percent of those people say they’re going to struggle to make next month’s payment as well.
Weekly Economic Index
To provide the world with a more up-to-date snapshot of current economic conditions, the New York Fed began publishing a Weekly Economic Index. In March, the index fell sharply as the pandemic took hold. It seemed to have bottomed by the end of April. The index steadily increased throughout May, but in the final week of July, it declined by just over half a percentage point.
Small Businesses Are Struggling
Small businesses account for roughly 44% of the U.S. economy and are responsible for almost two-thirds of the jobs created. Their recovery is paramount to avoiding a long and arduous recession—but the figures show they’re struggling to find stable footing. Small business revenue fell sharply in March and most of April, but as economies reopened in May, those figures began to reverse. In June and July, small business revenue was not only flat, but it was still well below pre-pandemic levels.
That’s a massive problem as the nation braces for another Covid-19 outbreak in the autumn. Most small businesses are tight on cash, so heading into another significant downturn on the back foot could be the final nail in the coffin.
This downturn is likely more pronounced at restaurants, which already operate on razor-thin margins. According to OpenTable data, the recovery among restaurant reservations across the U.S. has declined significantly in recent weeks as the number of coronavirus cases increased.
4 Charts Show a Recession Is More Likely Than a Recovery, CCN, Aug 3