As the Federal Reserve slashes the cost of money to zero, Coronavirus is requiring closures, cutbacks and social distancing.
President Donald Trump and the Federal Reserve are trying to mellow markets as the first bear market since 2008 grips the world. The Federal Reserve’s emergency action acknowledges the economy is at risk.
Coronavirus is hurting small businesses. Jobs on main street, in oil fields of the US’s oil patch, are being lost.
Ultra-low interest rates will not help small business bosses make payroll or balance their checkbooks.
The New York Federal Reserve released its latest Empire State Manufacturing survey on Monday morning, showing the report’s index of business conditions fell to its lowest level since 2009.
The survey’s February to March decline was its largest ever. It noted that delivery times have increased and inventories have increased.
“Employment leveled off, and the average workweek declined. Input price increases were little changed, while selling prices increased at a slower pace than last month. Optimism about the six-month outlook fell sharply, with firms less optimistic than they have been since 2009.”
The report’s survey responses were based on the dates between March 2-10. Since then, economic activity has been shut down across the U.S. and the Fed slashed interest rates, announced new asset purchase program, and many other measures to steady the economy.
“The virus presents significant economic challenges,” said Fed chair Jerome Powell said. “Like others, we expect that the illness and the measures now being put in place to stem its spread will have a significant effect on economic activity in the near term.”
The most negative aspects of the New York Fed release were business conditions and optimism. Both measures are not at their lowest level since 2009.
Ian Shepherdson, Pantheon Macroeconomics, summed up the report: “In one line: Manufacturing is back in recession.”