Global markets down…Dim outlook for US economy
BEIJING (AP) -Global markets declined today after the Federal Reserve warned the coronavirus pandemic might threaten the modest economic recovery and has kept interest rates near zero. In early trading in Europe, the FTSE 100 in London lost 1.4% and Frankfurt’s DAX 2%. The CAC 40 in France declined 0.8%. Shanghai, Tokyo and Hong Kong closed lower after spending part of the day in positive territory. On Wall Street, futures for the benchmark S&P 500 index and the Dow Jones Industrial Average were 1% lower.
WASHINGTON (AP) – Having endured what was surely a record-shattering slump last quarter, the U.S. economy faces a dim outlook as a resurgent coronavirus intensifies doubts about the likelihood of any sustained recovery the rest of the year. A huge plunge in consumer spending is estimated to have sent the economy sinking at a roughly 32% annual rate in the April-June quarter. That would be roughly triple the previous record economic contraction. On Thursday, the government will issue its first of three estimates of economic activity for the April-June quarter.
FRANKFURT, Germany (AP) – Germany’s economy took a massive hit during the pandemic shutdowns. Output shrank by 10.1% percent during the April-June period. That’s the word from the country’s official statistics agency. Tough pandemic restrictions shut down everything from taverns to auto dealerships. The country has cautiously reopened and the economy has started bouncing back but economists say it is far from the pre-virus level. The country has enacted a multibillion-euro stimulus package of emergency loans, credit guarantees and tax breaks to cushion the impact.
BILLINGS, Montana (AP) – U.S. energy consumption plummeted to its lowest level in more than 30 years this spring as the economy largely shut down due to the coronavirus. The decline reported Wednesday by the U.S. Energy Information Administration was driven by less demand for coal to produce electricity and oil that’s refined into gasoline and jet fuel. Overall energy consumption dropped 14 % during April. That’s the lowest monthly level since 1989 and the largest decrease that’s been recorded by the energy administration in records dating to 1973. The largest drop previously seen was in December 2001, after the Sept. 11 attacks shocked the economy and a mild winter depressed electricity demand.
UNDATED (AP) – Spirit is the latest airline to warn about possible furloughs in October, when federal payroll-help money runs out. The budget airline could send furlough warnings to up to 30% of its 9,000 employees. Spirit got federal money in exchange for not laying off workers until October. Separately, key members of Congress say they are investigating 12 airline-industry contractors who got payroll-help money after laying off thousands of workers between them. The lawmakers want the Treasury Department to recover any money that was given to the contractors, who include some big airline catering outfits.