COVID-19 and the Ninth District Economy: A Dashboard

Midwest Federal Reserve: What they’re hearing and watching for our economic indicators

 

With thanks to the 7 Rivers Alliance, the Minneapolis office of the Federal Reserve reported on what they are hearing:

  • “COVID Job Shock”: there are very poor conditions based on the type of business
  • All businesses are devastated. Revenue is down a minimum of 25-50%. The variety is based on when states opened
  • Highest impacted industries:
    1. Entertainment
    2. Food/Lodging
    3. Retail
    4. Healthcare
  • Lowest impact
    1. Manufacturing
    2. Financial institutions
  • The strongest impact is on sole proprietorships and small businesses (1-10 employees)
  • Seeing revenue loss and layoffs. Wage cuts are happening up to 10%
  • Business solvency:
    1. in March, 1:3 businesses said the cannot survive more than 1-3 months. Now it is 1:4. This is likely due to the Payroll Protection Plan (PPP) funds arriving.
    2. 75% of businesses have received aid
    3. Wisconsin Stats: $8 billion in PPP received in Round 1 with an average loan size of $200k. During Round 2, $1.8 bil received and average loan size of $70k. This means small businesses got funded during Round 2.
  • They are watching metrics to see how consumers are reacting: Open Table (restaurant reservations), traffic volumes, TSA checkpoint numbers (travel)
    1. See their dashboard HERE
  • Obstacles businesses are facing to economic vitality:
    1. Restrictions on opening
    2. Consumer Confidence
    3. Worker willingness to return to work
    4. COVID vaccine being developed
  • This will not be a quick recovery
  • “It is safe to say that interest rates will remain low”
  • When asked how to help particular industries (ex. entertainment, which is still not open): when you begin to target funds, the process takes much longer
  • They are considering loans to the public sector to help support government, education, etc.

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