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.
Key Economic Insights
- Global: The world economy continues to climb back from the depths of the COVID-19 crisis, but prospects for recovery are diverging across regions and countries, according to the IMF.
- U.S.: The path of the economy continues to depend significantly on the course of the virus and the measures undertaken to control its spread, based on Federal Reserve’s latest testimony.
- Ohio: The Columbus Innovation District aims to create 20,000 jobs with $3B economic impact.
A global recovery from the crisis hinges on making rapid progress against the pandemic and providing effective economic support until the virus is beaten back. advanced and some emerging market economies are expected to gain widespread access to vaccinations during 2021, whereas others face a much longer wait.
The winter storm freeze throughout the U.S. may become a global oil production issue as more than 40% of the nation’s crude production remains offline according to traders and executives. Brent crude briefly surged to over $65 a barrel, a level not seen since prior to the pandemic. Traders and consultants now expect a full resumption of oil production to take weeks, rather than a previous expectation of 2-3 days. Saudi Arabia announced that by 2024 its government would cease doing business with any international companies whose regional headquarters were not based within the kingdom. The European Central Bank policymakers warned that a temporary boost to inflation should not be mistaken for a sustained increase.
Applications for unemployment claims rose last week to 861,000, evidence that layoffs remain painfully high despite a steady drop in the number of confirmed viral infections. Nearly two-thirds of workers who started getting jobless benefits in October had also collected them earlier in the crisis, according to a new research by University of Chicago and JPMorgan Chase Institute, signaling another dimension of pain in the labor market nearly a year into the pandemic. In California, 96% of new unemployment claims are repeat applications from workers in accommodation, food services and arts, entertainment and recreation industries. Even with skyrocketing U.S. unemployment, businesses that relied on foreign workers and were able to remain open during the pandemic struggled to fill jobs.
The consumer price index increased 0.3% January after climbing a revised 0.2% in December. Retail sales, a measure of purchases at stores, at restaurants and online, jumped a seasonally adjusted 5.3% in January from a month earlier, and manufacturing output neared pre-pandemic levels. Nationally, office leasing demand was down 61% in January 2021 from December 2019. Americans took out a record $1.2T worth of mortgages in the final three months of 2020, locking in historically low interest rates. Borrowers with high credit scores, above 760, fueled the surge by accounting for more than two thirds of total originations for the quarter.
Walmart, the nation’s largest private employer, is raising wages for 425,000 of its nearly 1.5M employees to a range of $13 to $19 per hour. Walmart now has about 730,000 U.S. store associates, approximately half of its workforce, earning $15 or more per hour. Ford will invest $1B in a German factory as part of a plan to phase out gas-powered cars in Europe by 2030, the latest auto maker to embrace a shift to electric vehicles. An estimated 368M passengers flew in 2020, the lowest number since 1984, as U.S. air carriers faced their worst economic year in history. U.S. airliners lost a combined $46B in pre-tax dollars due to the reduced traffic.
A ‘siege of winter storms’ since late January contributed to the most widespread snow cover across the contiguous U.S. in at least 17 years. Roughly 150M Americans were at some point under a form of winter storm warning. Close to 3M households in Texas were left without electricity and blackouts spread across the central U.S., after arctic air caused disruption and outages at power plants just as heating demand soared. After creating havoc in the power and natural gas markets, the next commodity sector causing concern in Texas is the oil refining industry, where more than 3M barrels of daily oil-processing capacity has been idled in the wake of the record-setting cold.
Ohio Employment & Economic Insights
Ohio Governor Mike DeWine and Lt. Governor Jon Husted were joined by JobsOhio, The Ohio State University, Nationwide Children’s Hospital, Franklin County, the City of Columbus, and state legislators to unveil the Columbus Innovation District, which aims to create 20,000 jobs with $3B economic impact for Ohio. Ohio State is investing $647M on 270 acres of university-owned land on its West Campus.
Gov. DeWine announced Ohio has developed a central coronavirus vaccine registration website to allow people to sign up for the vaccine and is working to add providers to the system. Ohio has administered the fifth-highest number of doses nationally through the Center for Disease Control and Prevention’s Pharmacy Partnership for Long-Term Care Program.
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