COVID-19 Monitor

Last Updated:August 7, 2020

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Coronavirus Leads to More Use of Contactless Credit Cards and Mobile Payments Despite Cost and Security Concerns (Business Wire Retail News) Published on: August 6, 2020 | Category: Economic Impact
  • With consumers worried about touching surfaces during the coronavirus pandemic, the use of mobile payments and contactless credit or debit cards has significantly increased in the past few months, according to research released today by the National Retail Federation and Forrester.
  • “Health experts say there is no clear evidence that COVID-19 is transmitted by cash or credit cards but retailers are putting health and safety first and have rolled out a variety of no-touch payment options in order to err on the side of caution,” NRF Vice President for Government Relations, Banking and Financial Services Leon Buck said.
  • Among U.S. consumers, 19 per cent surveyed via Forrester Consumer Technographics said they made a digital payment in a store for the first time this May. Of those, 62 per cent used their phone and 56 per cent used a contactless card.
  • “While mobile payments and contactless cards have accounted for a minority of payments in the past, the pandemic has clearly driven consumers to change their behavior and retailers to accelerate their adoption of the technology.”
The ‘shop local’ message is everywhere, but it’s tough resisting deals during a pandemic (CBC) Published on: August 6, 2020 | Category: Canadian Business
  • While recent polls suggest most Canadians support the idea, actually getting people to prioritize shopping locally over scoring the best deal and the convenience of shopping online is a tough sell during a pandemic, some experts say.
  • The Bank of Canada’s most recent survey of consumer expectations showed that virtually all indicators have deteriorated due to the impact of the pandemic, including people’s expectations for wages, spending, labour market conditions, inflation and growth in house prices.
  • American Express Canada said 83 per cent of participants in an online poll in June agreed it was time to support the small business community, while 76 per cent said they were “determined to shop local more than in the past.”
The world is spending nowhere near enough on a coronavirus vaccine (The Economist) Published on: August 6, 2020 | Category: Global Response
  • The world is hungry for a vaccine against covid-19. So far about 700,000 deaths have been recorded from the disease, and the total is increasing at a rate of roughly 40,000 a week.
  • In the face of this catastrophe, scientists look likely to produce a vaccine much faster than almost anyone could have predicted at the start of the pandemic. Yet global efforts to manufacture and distribute vaccines do not measure up.
  • Instead of seeing unproven vaccines as an extravagance, the world needs to think of them as an insurance policy. Research suggests that if ten or more vaccines are in development, there is a 90% chance of finding one which works.
New US jobless claims hover above 1m though pace slows (FT) Published on: August 6, 2020 | Category: Economic Impact
  • The pace of new applications for US unemployment aid slowed last week but remained above 1m, as businesses continue to struggle with the impact of coronavirus outbreaks in some parts of the country.
  • The drop in continuing claims indicated that “some rehiring is occurring”, economists at Oxford Economics said. “However, with the level remaining at a very elevated 16.1m, it underscores the painfully slow recovery in the labor market,” they added.
  • Health officials have warned that other states spared early in the pandemic could face an accelerated rise in cases. Economists believe regional outbreaks may slow the US economic recovery from months of widespread shutdowns.
A Financial Crisis Is Looming for Smaller Suppliers (HBR) Published on: August 6, 2020 | Category: Economic Impact
  • High-profile bankruptcies, refinancing deals, and drastic cost-cutting involving the likes of Brooks Brothers, JCPenney, Hertz, Neiman Marcus, Ford, and GM are testament to the financial distress wrought by the Covid-19 pandemic. But a less visible crisis deep within supply chains is destabilizing small and medium-sized enterprises (SMEs) and could add to the woes of the global economy.
  • Over recent decades, companies have striven to become lean organizations by reducing inventory and optimizing operations to increase efficiency. However, these measures have also made their operations more fragile by, for example, increasing their dependence on a finely tuned supply base that is vulnerable to disruptions.
  • Companies in need of cash — especially large firms — have increasingly turned to the only source of cash available: their payables.
‘I am feeling that this is the end of my career.’ Millions of US jobs are gone for good. (Chicago Tribune) Published on: August 5, 2020 | Category: Economic Impact
  • On Friday, economists expect the government to report that employers added 1.6 million jobs in July, according to data provider FactSet, and that the unemployment rate declined from 11.1 per cent to a still-high 10.5 per cent. At any other time, a million or more jobs would constitute an unheard-of increase.
  • But July’s expected gain would fall way short of June’s 4.8 million increase and would signal that hiring has sharply slowed.
  • Traditional retail stores will probably never regain their pre-pandemic levels of sales or employment as consumers increasingly turn to internet purchases.
  • And a survey by The Associated Press-NORC Center for Public Affairs Research in July found that nearly half of those who have lost jobs during the pandemic say those jobs are gone for good.
N.Y., N.J. and Conn. to require travelers from 35 states to quarantine (Axios) Published on: August 5, 2020 | Category: Global Response
  • Travelers from 35 states are now required to quarantine for 14 days when traveling to New York, New Jersey and Connecticut, per New York state’s health department.
  • New York City will set up bridge and tunnel checkpoints to enforce the quarantine order, Mayor Bill de Blasio said Wednesday, per the Wall Street Journal.
  • “The quarantine applies to any person arriving from a state with a positive test rate higher than 10 per 100,000 residents over a 7-day rolling average or a state with a 10 per cent or higher positivity rate over a 7-day rolling average,” Gov. Andrew Cuomo said in a press release.
Pandemic Lays Bare U.S. Reliance on China for Drugs (WSJ) Published on: August 5, 2020 | Category: Economic Impact, Global Response
  • The shortage of a simple, over-the-counter painkiller shows how dependent the U.S. has become on China for vital pharmaceutical supplies.
  • India, the world’s largest producer of generic medicines, depends on China for 80% of its active pharmaceutical ingredients, or API, the chemicals that give drugs their medicinal properties, according to industry data and Indian companies.
  • Overall, China makes nearly half of the planet’s API, according to Britain’s Medicine and Healthcare Products Regulatory Agency and pharmaceutical analysts.
Reimagining the $9 trillion tourism economy—what will it take? (McKinsey) Published on: August 5, 2020 | Category: Economic Impact, Global Response
  • Tourism made up 10 per cent of global GDP in 2019 and was worth almost $9 trillion, making the sector nearly three times larger than agriculture.
  • COVID-19 has caused an unprecedented crisis for the tourism industry. International tourist arrivals are projected to plunge by 60 to 80 per cent in 2020, and tourism spending is not likely to return to precrisis levels until 2024. This puts as many as 120 million jobs at risk.
  • New Zealand has offered an NZ $15,000 (US $10,000) grant per SME to cover wages, for example, while Singapore has instituted an 8 per cent cash grant on the gross monthly wages of local employees. Japan has waived the debt of small companies where income dropped more than 20 per cent.
Four trends from the bank earnings season (FT) Published on: August 5, 2020 | Category: Economic Impact
  • Government support schemes have helped suppress customer defaults on both sides of the Atlantic. Nonetheless, this year banks have booked tens of billions of dollars of provisions to cover an expected rise in defaults amid a rise in unemployment and uptick in corporate bankruptcies.
  • Led by Morgan Stanley, Goldman Sachs and JPMorgan, fixed income revenues more than doubled in the second quarter at the six largest American banks, following a gain of about a third in the first three months of the year.
  • The top six US banks managed to grow their capital marginally in the first half of 2020, despite taking a whopping $60bn of loan loss provisions during the period.
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