Oil prices fell Monday by the most in one day since the 1991 Gulf War. The price of U.S. crude fell as much as 34%, to $27.34 a barrel, the lowest price since early 2016. Here’s what’s driving the price drop.
Since breaking out of China, the coronavirus has had a chilling effect on companies related to manufacturing, travel and tourism, which then hampers other industries and weakens consumer confidence.
Just weeks since most economists bet the China-led slump would quickly reverse once the virus was contained, many are rethinking that optimism as swathes of Chinese factories stay shut and workers idled.
The Labor Department said Friday that the unemployment rate fell to 3.5% last month, matching a 50-year low, down from 3.6% in January.
A range of job market barometers will provide some of the most vital signals about the economy in the coming weeks and months.
The Federal Reserve’s latest nationwide survey of business conditions has found that the coronavirus outbreak has begun to affect tourism and disrupt manufacturing chains in parts of the United States.
If the disease known as COVID-19 becomes a global pandemic, economists expect the impact could be much worse, with the U.S. and other global economies falling into recession.
Orders to U.S. factories for big-ticket manufactured goods were pulled down by decreased demand for cars, auto parts and military aircraft, but the category that tracks business investment rose significantly.
Service providers and manufacturers are noting reluctance among clients to place orders amid the global virus scare.
Among the first tangible impacts in the U.S. is a decline in the number of Chinese tourists. Visitors from China represent a lucrative market for American airlines, hotels, luxury retailers and entertainment venues.
It was a slight improvement over December, as unseasonably warm weather boosted sales at hardware stores and furniture stores.
Jerome Powell told Congress on Tuesday that the Fed is monitoring developments stemming from the coronavirus, which he said “could lead to disruptions in China that spill over to the rest of the global economy.”
U.S. businesses sharply cut the number of open jobs in December for the second straight month, an unusual sign of weakness in an otherwise healthy job market.
Productivity, a key factor needed to boost living standards, has been lagging for most of this record-long expansion, now in its 11th year.
If much of industrial China remains on lockdown for the next few weeks, Western retailers, auto companies and manufacturers that depend on Chinese imports will start to run out of the goods they depend on.
China’s central bank announced plans Sunday to inject 1.2 trillion yuan (about $173 billion) into the economy to cushion the shock to financial markets from the outbreak of the new virus when trading resumes Monday.
Americans’ pay and benefits rose at a solid pace last year, but at a slightly slower rate than in 2018, the Labor Department said Friday.
The dangerous virus spreading through China threatens a wide range of industries with ties to the world’s second largest economy.
For the whole year, GDP increased 2.3%, the weakest performance in three years and a slowdown from a 2.9% gain in 2018.
The Federal Reserve sketched a mostly positive picture of the U.S. economy after its latest policy meeting. It also repeated its pledge to “monitor” the world economy, which may be held back in the coming months by China’s viral outbreak.
