The views, thoughts, and opinions expressed in the text belong solely to the author, and not necessarily to the Asian American News Network or its affiliates. This article has been reposted with permission from the author.
Markets have been showing indications of another slowdown. Some of the largest banks, including Wells Fargo, JP Morgan, and Citigroup, have nearly doubled the amount of money set aside for corporate loans. This totals up to $33 billion. It has been revealed that the good news of second quarter gains was in reality due to banks collecting fees by helping companies stockpile their cash, not in helping companies in deals. Many executives in these banks have warned that the coronavirus induced recession is only at the tip of the iceberg.
The labor market is also showing signs of slowdown. Although new cases have especially surged in the South and West, economic turbulence is widespread across the nation. Congress is still debating whether to extend the $600 per week benefits that 25 million Americans are receiving. Critics are becoming more vocal that these benefits are paying minimum wage workers more than they receive from working. The US is stuck between keeping shutdowns which risk economic stagnation and opening up the public to higher spreads of the virus. Many small businesses that opened up during the downward trend of new cases have been forced to close down again.
Retail sales, while still up 7.2% this past month, has been cut down from the previous 18.2%. The strong jump in the NY Empire State Manufacturing Index to 17.2 from -0.2 is bound to drop soon as well.
The real estate market is still showing signs of life. Housing starts increased 17.3%. Due to the low 3.19% mortgage rate, mortgage applications have climbed to 5.1%. Refinancing applications jumped 11.9%, showing that a large number of people are trying to capitalize on the lowest mortgage rates in nearly 50 years.
Overall data shows that simply going back to “normal” and hoping the virus goes away is not effective. The end of the United State’s saga through trouble and turmoil is far away.
