This blog is the second in a series that discusses how the current pandemic affects the financial positions of publicly traded U.S. corporations, the potential implications of these financial developments, and the federal policy response. The first blog discussed the financial positions before the pandemic started. It documented that many nonfinancial publicly traded companies entered 2020 with historically elevated levels of leverage. This second blog explains how we use stock returns to project the potential earnings losses due to Covid-19; this will be used in our next blog to project the evolution of firms’ financial positions.

How can I receive my economic impact payment if, for example, I didn't file taxes in 2018 or 2019; or, I wasn't required to file, but I have a dependent under the age of 17?

We know that tens of millions of people are currently out of work in the United States. More than 26 million workers filed for unemployment benefits between mid-March and mid-April alone. The most popular measure of the strength of the labor market is the unemployment rate. Forecasts for how much it will rise in the coming months vary widely, but many economists now expect an increase to at least 15%, and perhaps much more.

Despite its popularity, the official unemployment rate does not capture all workers facing adverse employment conditions. To count as unemployed, one must be out of work and either on temporary layoff or actively looking and available for new work. This leaves out many people who want to work but did not look for work in the period covered by the data, as well as people who may remain employed but at substantially reduced hours.

The Labor Department has alternative, broader measures of labor market underutilization that track these...

According to the most recent AgLetter, Seventh District farmland values in the first quarter of 2020 were 1 percent higher than a year ago, despite challenges for the farm sector related to Covid-19. Moreover, values for “good” agricultural land in the first quarter of 2020 were largely the same as in the fourth quarter of 2019.

 

This blog is the first in a series that will discuss how the current pandemic affects the financial positions of publicly traded U.S. corporations, the potential implications of these financial developments, and the federal policy response. This first blog discusses the financial positions before the pandemic started. We document three facts: (1) the share of nonfinancial public companies with large amounts of leverage was elevated, suggesting financial fragility; however, (2) interest expenses were small for most firms due to the low level of interest rates; and (3) most firms had significant liquidity.

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Daniel Aaronson is a vice president and director of microeconomic research in the economic research department at the Federal Reserve Bank of Chicago. His recent research includes studies on female labor supply over the development transition, the long run impact of access to credit, and job loss associated with automation. His past research has been published in journals such as the Journal of Political Economy, American Economic Review, Review of Economics and Statistics, Economic Journal, Journal of Labor Economics, and Journal of Human Resources and has also been featured in Chicago Fed research publications, including Economic Perspectives and Chicago Fed Letter.

Prior to his current position, Aaronson served as an economist, senior economist, and economic advisor in the economic research area. He began his career at the Chicago Fed in 1996. He is currently an adjunct professor at Northwestern University’s Kellogg School of Management.

Aaronson...

The first two columns in the table below denote how many series of the 105 used to construct the NFCI and adjusted NFCI (ANFCI) indicated tighter-than-average or looser-than average conditions in the most recent week. The latter two columns indicate how many of the 105 indicators have tightened or loosened in the past week.

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The Chicago Fed’s National Financial Conditions Index (NFCI) provides a comprehensive weekly update on U.S. financial conditions in money markets, debt and equity markets and the traditional and “shadow” banking systems. Because U.S. economic and financial conditions tend to be highly correlated, we also present an alternative index, the adjusted NFCI (ANFCI). This index isolates a component of financial conditions uncorrelated with economic conditions to provide an update on financial conditions relative to current economic conditions.

The NFCI and ANFCI are updated on a weekly basis at 8:30 a.m. ET on Wednesday, and cover the time period through the previous Friday. When a federal holiday falls on a Wednesday or earlier in the week, the NFCI and ANFCI will be updated on Thursday.

Nearly 7 out of 10 respondents indicated that COVID-19 was a significant disruption to the economic conditions of the communities they serve and that recovery is expected to be difficult.  Income loss, business impacts, health concerns, and basic consumer needs were the most frequently cited impacts of COVID-19.  Over one-third of respondents indicated it will take longer than 12 months for their communities to return to pre-COVID-19 conditions.  72 percent of respondents indicated COVID-19 is significantly disrupting their organization or business, with 41 percent expecting to bounce back quickly after the recovery begins.  25 percent of respondents indicated their business or organization could operate for less than three months in the current environment before exhibiting financial distress. 

This article looks at the relationships between internet searches for unemployment-related terms, unemployment insurance (UI), and the public health orders issued in the U.S. during the Covid-19 pandemic. We find that Google searches for unemployment-related subjects surged before the record increase in initial UI claims, which in turn peaked before the public health orders were implemented. As of mid-April 2020, these orders covered the vast majority of the U.S. population. Since then, the rates of increase in both search activity and initial UI claims have slowed.

In this Chicago Fed Letter, we explore the relationships between daily Google searches for unemployment-related subjects, weekly initial unemployment insurance claims, and public health orders (stay-at-home, shelter-in-place, and nonessential business closure orders) imposed by U.S. state and local governments in response to the Covid-19 pandemic. A sizable increase in search interest in unemployment and...

The Chicago Fed Survey of Business Conditions (CFSBC) is a survey of business contacts located in the Seventh Federal Reserve District. The Chicago Fed produces diffusion indexes based on the quantitative questions in the survey that are released at 10:00 a.m. ET on scheduled days, normally in the second week of each calendar month.

The Chicago Fed Survey of Business Conditions (CFSBC) is a survey of business contacts located in the Seventh Federal Reserve District. The Chicago Fed produces diffusion indexes based on the quantitative questions in the survey that are released at 10:00 a.m. ET on scheduled days, normally in the second week of each calendar month.

Let me start by expressing my deepest sympathies for all of those who have been touched by the coronavirus. We are all well aware of the situation in Michigan and the hardships you face. And our sincere gratitude goes to the health care providers, workers in essential services, and all of the others who are doing so much to get us through this difficult time.

I’m glad to be able to share my views on the U.S. economy, discuss the Fed’s initial responses to the crisis, and talk about some of the challenges that lie ahead. Of course, as usual, the views I’ll express today are mine and do not necessarily reflect the views of the Federal Open Market Committee (FOMC) or others in the Federal Reserve System.

I don’t need to describe the stay-at-home restrictions and shutdowns in nonessential activities that have been implemented around the world in efforts to reduce—and hopefully stop—the spread of the Covid-19 virus. We are all living with them and seeing their...