This report is a summary of third-party economic research and perspectives to foster communication with business and economic development stakeholders during the COVID-19 crisis.
- Global: Confirmed cases of COVID-19 have now passed 75M globally and the number of confirmed deaths globally stands at over 1.65M.
- U.S.: The Federal Reserve raised its 2021 economic outlook slightly, sees 4.2% growth next year.
- Ohio: Ohio’s unemployment rate was 5.7% in November 2020, down from a revised 6.1% in October.
European authorities are pushing for approval for the BioNTech/ Pfizer COVID-19 vaccine with plans to start a campaign across the continent 2 days after Christmas. The EU ordered up to 300M doses on behalf of its member states and agreed to be supplied with Moderna and Novavax’s vaccines. French President Macron tested positive for COVID-19, prompting a tracking effort across Europe. The Purchasing Managers’ Index for the UK for services and manufacturing sectors rose to 50.7 in December from November’s 49.0.
McKinsey estimates banks around the world could lose out on $3.7-4.7T in revenue between 2021 and 2023 when compared to earlier projections. Farmers in India marched to the capital to protest proposed legislation and upward of 250M people participated in a general strike in solidarity. The ransacking of an iPhone manufacturer in southern India could be the first of many “flashpoints” involving local workers in the supply chains of major brands, pointing to a lack of rights and recourse under new labor laws.
Unemployment claims rose to 885,000 from 862,000 a week earlier. The four-week moving average of claims, which smooths out weekly volatility, increased after trending downward since the spring. States are short billions of dollars needed to successfully provide COVID-19 vaccinations to all Americans who want to be inoculated by health officials’ June goal. The Federal Reserve will continue buying bonds at $120B per month until “further progress has been made toward the Committee’s maximum employment and price stability goals”.
S&P believes the economy can hit pre-virus levels in Q3 2021 if a new relief package valued at $1T is in place by the start of the year. The agency expects U.S. real GDP to rebound 4.2% in 2021 following an estimated 3.9% contraction in 2020. Economists expect the economy to expand at a 1.9% annual rate from January to March, down from 3.3%, but they overwhelmingly expect vaccines will be a boon in the second quarter. S&P 500 and Nasdaq hit record highs as stimulus talks continued. The package may include direct checks to Americans, enhanced federal unemployment benefits, and be attached to the broad government funding bill.
Small businesses anticipate the worst of the pandemic is still ahead, and half of small businesses see their operations continuing for a year or less in the current climate before having to permanently close according to a poll taken a month ago. Small lenders are doing far better than expected at the outset of the recession—largely thanks to government money that passed through banks on the way to households and businesses. Profit at community banks jumped 10% in the third quarter from the same time last year. Total loans rose 13.4% in the third quarter, compared with 4.9% for the industry. Deposits surged 16.7%. Noncurrent loan rates have risen slightly but are still far below levels during the last financial crisis.
More than 85M American adults (35.6%) had trouble paying typical household bills, up nearly 10M (4%) from September. The University of Michigan’s preliminary sentiment index rose from a final November reading of 76.9 to 81.4 – the second-highest level since March. Retail sales, a measure of purchases at stores, restaurants and online, dropped a seasonally adjusted 1.1% in November from the prior month. COVID-19 is accelerating the exodus from New York and California to cheaper states as cost of living played a major role in shaping peoples’ decisions on which city to move to during the pandemic.
Ohio’s unemployment rate was 5.7% in November 2020, down from a revised 6.1% in October. Ohio’s nonagricultural wage and salary employment increased 29,400 over the month. Initial jobless claims totaled 38,327 last week, up from the 36,327 the week before. The FCC announced that the Rural Digital Opportunity Fund (RDOF), an investment to expand broadband across the country, allocated over $170M to service 191,000 homes and businesses in Ohio over the next 10 years. Allen Township is part of the pilot program for SpaceX’s Starlink thanks in part to JobsOhio efforts.
The first round of COVID-19 vaccinations began with frontline medical workers. Nearly 100,000 doses were sent to Ohio with a second batch expected next week of 123,000 doses. More than 420,000 vaccines are expected to be received by Christmas while December is on pace to be the deadliest month for COVID-19 in Ohio.
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