The Coronavirus outbreak has negatively affected many companies in the US. Broken supply chains and disrupted manufacturing has decreased demand for all products. The S&P lost 11.5% of its value this week. The worst week since the 2008 financial crisis. Microsoft announced that the virus has hindered computer and tablet sales, cutting their future forecasts. Apple said their sales in China dropped due to closing of stores. MasterCard also cut their forecasts because people are taking less international trips due to the fear of the virus. Investors are also less reluctant to lend them money. Jerome Powell of the Federal Reserve stated they would cut interest rates to incentivize spending and investing. He issued a statement saying these cuts would "act as an appropriate support for the economy" and "as a way to stem panic." Do you believe another economic recession is imminent?
https://www.nytimes.com/2020/02/28/business/economy/companies-coronavirus-economy.html
6 comments:
In my opinion, I do not believe that a recession is “imminent.” There are worrying signs within our current economic environment that are likely to drive down America’s economic performance, but these signs and factors do not necessarily mean that a recession is imminent.
While I do not think that a recession is imminent, I do think that economic turmoil of some stature is going to happen. China saw a major decrease in economic activity and we are do for the same. The CDC has already warned the American people for a massive disruption in their lives, but only time will tell.
I agree with Cody and Kyle that a recession is not imminent in the United States. The virus has definitely had a negative effect on a global economic platform, but I don't think the US will see as big of a decrease in economic activity as other countries. While the US economic will be damaged by the coronavirus, I don't think there is enough evidence to say a recession is coming our way.
If a recession is coming our way, I think it'll be because it was going to come anyway. Recessions are a cyclical occurrence, and while outside factors can change the way they impact our economy, I do not believe a virus will be the direct cause. It didn't happen with Ebola and it didn't happen with viruses like H1N1.
In addition, I've observed places looking just as crowded or vacant as they usually are. I think that the media is forcing this issue upon the public.
I also agree with everyone above about there probably will not be an economic recession in the United States soon. The virus has spread so much though that the global economy has been in shock because of it. This article also addresses an interesting comparison to the flu where it explains that it is a lot worse because it is all about how many people catch it.
I don't think that a recession is "imminent" but I do think there will be some factors that drive the economy to go down, but I think that with all the information we know have in 2020, it is unlikely we will have a devastating recession like in the past.
Post a Comment