As U.S. economy expands, coronavirus has little impact so far

As the U.S. economy expanded at a modest to moderate pace over the past several weeks, the coronavirus has had little impact so far on U.S. economic data so far, yet there are signs the escalating coronavirus outbreak has begun to weigh on business sentiment in the United States, a report by the Federal Reserve released on Wednesday showed.

On Tuesday, the Fed cut interest rates by a half percentage point in an attempt to mitigate possible economic effects of the coronavirus on the world’s largest economy.

U.S. economy expands despite coronavirus concernsLindsay Dunsmuir for Reuters:

“The coronavirus was negatively impacting travel and tourism in the U.S….some supply chain delays were reported as a result of the coronavirus and several districts said that producers feared further disruptions over the coming weeks,” according to the report, in which the coronavirus was mentioned 48 times.

The Fed uses the survey, compiled into a report known as the Beige Book, as ground-level intelligence on the economic outlook for the months ahead as business sentiment often front-runs changes in hard economic data. Districts reported their outlook for the near-term was mostly for modest economic growth, with the coronavirus and the upcoming U.S. presidential election cited as potential risks.

Overall, the virus has had little impact so far on U.S. economic data, with consumers still spending and unemployment near a 50-year low. There were few signs yet of that abating, according to the Fed’s report, which noted a pick-up in consumer spending and hiring constrained by a tight labor market.

MacDailyNews Take: Strong consumer spending and full employment in the world’s largest economy bode well for makers of coveted goods and services such as Apple!


  1. … and elsewhere the clickbait headlines read, “Is it safe to visit Grandma?”. Nobody knows the real risk of the virus at personal level, at community level, or at global level.

    Perhaps the typical Apple investor doesn’t yet see the risks, as AAPL prices haven’t felt the pain at yet. Apple is sitting on so much cash that value investors have stuck by the stock. Streaming services are of course interpreted as being immune to any viruses. Investors could start to give up hope, however, as product shortages and new product delays begin to mount, or if a major Apple supplier or work site was found to have an outbreak. How long can Apple restrict its employees from flying to China, etc before the business falters?

    Coronavirus has had rather significant impact in some hot spots and it’s only getting started. Business events are starting to be cancelled. School closures are being considered. The first quarter economic doldrums haven’t been reported yet. Until the public has some definitive guidance to protect themselves from the virus(es), the uncertainty will continue to whipsaw emotions and hence markets. The Fed shoveling cheap cash at corporate lenders will accomplish nothing other than shielding the Great Orange Deficit Spender from near term default. The current administration has no cohesive health plan — Great Orange Liar’s hunches don’t amount to anything.

    The good thing is that modern science will eventually deliver real solutions. It could take a year or more. Meanwhile, corporations that are flush with cash will simply coast along, perhaps furlough some employees. The working classes will have to keep stringing together multiple dead end jobs to make ends meet — assuming they can stay healthy. AAPL will make out better than small companies because of its cash assets, not because it’s wisely designed its supply chain to mitigate its risks.

    Amazon stock will likely surge as a growing number of panicked consumers hoard essentials and are too scared from visiting local retailers.

Reader Feedback

This site uses Akismet to reduce spam. Learn how your comment data is processed.