New Economic Data Even Worse Than Anticipated -- No Exit Strategy for Kentucky in Sight
Consumer and manufacturing reports released today showed historic, and even sharper than anticipated, declines in economic activity in March. Retail sales, measured by the Commerce Department fell by 8.7%, the sharpest monthly decline in history. Factory output in the United States suffered the deepest monthly decline since 1946, tumbling 6.3%. Manufacturing output in New York state, a widely used gauge for national output, fell a staggering 78.2% to an all time low.
Retail figures showed few areas of positive news. Clothing and accessories took the largest hit with a 50.5% decline, followed by furniture, food service, and motor vehicle sales, all of which declined more than 25%. Gas Stations saw a 17.2% decline. Food and beverage retail sales increased by 25.6%, but declines in restaurant sales have still forced farmers to trash millions of pounds of produce, dump milk, and smash eggs that can not be used or stored.
Figures on retail sales have been recorded since 1990.
Major banks have warned customers to expect a flood of loan defaults. JPMorgan Chase, Wells Fargo, Bank of America, Citigroup, and Goldman Sachs set aside $20 billion for bad loans during the first quarter and are expected to set aside higher figures in the second quarter.
JP Morgan economists predict an even more devastating second quarter, which began on April 1st, with an expected GDP decline of 40%, on the top of a 10% decline in the first quarter.
All of this news comes on the heels of tomorrow's release of weekly unemployment claims which will likely push the 4-week total of Americans filling for unemployment above 20 million, the largest such figure in history.
For Kentucky, last week's unemployment data showed that the commonwealth is 8th highest in the United States in unemployment claims per capita. Despite this, even as other states have established task forces to develop strategies on getting their populations back to work, Kentucky Governor Andy Beshear has yet to do so or to indicate any timeline on when Kentucky's economy might begin restarting. Such a task force can help the state quickly rebound after the coronavirus pandemic has ended.