As a matter of fact, things started to shake at the end of the year 2019 when the corona pandemic (which started as an epidemic and quickly turned to pandemic) has taken the world by storm. First, it rampaged Chinese people and the 14 trillion dollar economy of china, and then it spread its wings all over the world gradually. The countries that were hit hard by this outbreak include The United States of America, Italy, France, the United Kingdom, and India. Most of these countries have gone for a “complete lockdown” option.
Let us get the facts straight! The United States stands at the top of the list when it comes to the biggest economies in the world, and India stands at the third spot. On the other hand, the United Kingdom is the second biggest economy in Europe while France, Italy, and Spain stand third, fourth, and fifth in the list, respectively. The world’s top economies are under the pump, and the corona pandemic is still on the loose. Businesses have been affected badly while stock markets have also taken major blows.
According to stats, American stock markets have already suffered losses upto billions of dollars during this pandemic. On the other hand, many European economies and Asian economies shared the same fate. What’s more stressful is that the corona pandemic is not over yet, and things are getting from bad to worse. Moreover, this nightmare is far from over, and it is damaging the financial roots of every country on the planet, and things are not looking promising. The year 2020 can prove to be “heavy” on our pockets, and here is how:
Weakened economic growth for The United States and other countries
It is needless to say that major global or local events disturb the stock markets, and covid-19 is one of the biggest global events of this century, and it has already struck low blows to economies all around the globe. Starting with China, the birthplace of covid-19, its economy has been jolted by the outbreak. It has been the worst economic upset in Chinese history since the death of Mao Zedong in 1976. Industrial output in china faced a huge downfall of 13.5%. Moreover, investments in fixed assets have been reduced by 25% in China. The prediction came from the Chinese economic experts that the Chinese 14 trillion dollar economy might be reduced by 6% in the first quarter of this year, and the actual numbers are not that different from the predicted ones.
Talk about the united states, the early predictions made by experts have been proved wrong by this outbreak. US stock markets have been facing rapid ups and downs. The “ups” are rare and weaker, while the “downs” are stronger and frequent. One day, markets face a downfall of 8% and the next day it rises up by 4% and the next day it falls again by 6%.
One would have thought that blue-chip companies might not be affected by the corona pandemic, but this is not true either. Google, Microsoft, Apple, and Amazon have seen a reduction of 20% in their recent peak values before this disaster. Apart from that, many semiconductor corporations have faced a reduction of up to 30% or even more, and many “giant” software companies have also been hit with serious blows. Apple Inc. announced that it is becoming impossible for the company to achieve their quarterly goals.
Traveling industry has been one of those “poor mates” who have been affected most by this pandemic. JetBlue had withdrawn its quarterly for forecasts once this pandemic became global. United Airlines faced a 70% reduction in their bookings while bookings.com and Expedia have also suffered at the hand of the corona pandemic. Things are not looking good for corporations and stock markets. It is obvious that companies, investors, and shareholders are likely to suffer heavy losses in the year 2020.
Unemployment may “sneak up” its head again
Along with many other issues, this pandemic has also made so many people jobless. It is understandable that the unemployment percentage has gone up during this crisis because not every company or business can pay salaries to its employees. Small businesses will find it very difficult to keep “feeding” their employees during these dark times. Google, Yahoo, Tesla, Microsoft, Apple, Samsung, and other similar “giants” or well-established corporations have this luxury to take care of their employees. Companies like Google or yahoo can find their way with “work from home” methodology, but manufacturing corporations can’t enjoy this luxury.
This has made so many people jobless, and with the current situation, these numbers will keep rising. Talk about China, the unemployment ratio climbed from 5.2% (December 2019) to 6.3% in February 2020. Not only china, but unemployment has also struck the United States very badly. Until mid of march 2020, 3.3 million people filed unemployment claims in the united states. These numbers increased to 6.6 million approximately by the end of the march 2020, out of which, almost 3 million claims were insured. These stats were recorded at the end of the month, and this figure is rising continuously.
This has added a burden on the shoulders of the government. The numbers are increasing, and the government has to take care of these people now. A lot of people who were working on a “daily wage” basis are the ones who have been affected most during this period. Things can get worse if the plague is not put to a halt.
The “stuttering” real estate
Where people have gone jobless, so many people may become homeless as well. The real estate industry has been on the receiving end as well. Due to the financial crisis, people are facing difficulties while paying their rent. Of course, the sources of income have been either “closed” or reduced significantly, and paying monthly rents has become very difficult, to say the least.
On the other hand, tenants are worried about their rents. Millions of people in the united states are earning a major portion of their incomes through rental incomes. Either its rental income from houses, malls, apartments, or business premises, everyone is feeling the heat, and things can get worse.
Not only this, buying and selling ratio has also decreased significantly. People are reluctant to let visitors (potential buyers) into their homes, and buyers are also afraid of doing the same. At this very moment, everybody is looking for “survival,” and buying a property is not in their priorities. On the other hand, some frustrated sellers are selling their properties at lower prices to meet up their expenses.
Realtors are also suffering due to the current crisis. Of course, they earn their income through commissions from buyers and sellers, and “trade” is not happening nowadays. Fritz Frigan, the executive director of lease and sales in Halstead property, said that every weekend, there used to be 5,500-6,000 open houses. But this figure reduced to 3900 for scheduling on 14 and 15 March 2020, and many of these 3900 were canceled as well. Now, everyone knows that the real estate industry is one of the leading industries in the United States, as well as across the globe. This industry can face major financial crises in the year 2020.
An imbalance between work and life
Although it is hard to measure in terms of money that how an imbalanced work-life combination can affect the economy. Experts have expressed their fears that Respect, family, and work-life imbalance are leading to economic problems as well. Mostly, middle class and working-class Americans or American families are suffering due to this imbalance. People sitting at the top may not feel its effects, but a middle-class American can only earn a handsome amount of money by working “more” hours. This affects the work-life balance and can develop psychological issues due to stress and anxiety in people. Reeves from the Brookings Institute said, “family is an economic issue as well as a social issue.” He further added that It is obvious that people feel more stable and comfortable with their families when their wages or salaries are higher, and they are likely to increase with time. With the current economic instability, this can lead to further economic problems for the middle-class.
With the globalization, countries are interconnected. Trading between the countries has gone to a level where things can get very messy due to political differences. 7.2% of the total exports of the United States goes to china (2018). While imports from China are much more than exports. The United States imported 21.2% of its total imports from China in the year 2018. But, due to the current political tension between these countries, things can get worse. Moreover, many American companies have their manufacturing plants in China, for example, Apple Inc., and it is needless to say that Apple is one of the biggest companies in the united states. If restrictions are imposed on exports and imports due to political differences between both countries, these companies can suffer major losses.
What can be done?
The best thing an average person can do right now is “saving the money” as much as possible. Try to reduce your expenses as much as possible. If you have borrowed amount, interest rates can rise in the future due to the economic stability, and settling your debts will do a lot of good for you. If you are a real estate owner, holding your properties and not selling them “cheaply” will bear fruits once this nightmare is over. Just hold on tight!