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business/technology Monday 23 March 2020
Whiplash: All at once, a steady U.S. economy screeches to halt

By PAUL WISEMAN, ALEX- their occupancy rates are
ANDRA OLSON and JOYCE 15% to 20%. Recently, he
M. ROSENBERG AP Business traveled on a plane with
Writers just 15 passengers.
WASHINGTON (AP) — Three And until the virus para-
weeks ago, EmpireCLS was lyzed the economy, Sa-
heading toward a second mantha Martin's PR business
straight year of record busi- was soaring. At Toy Fair, an
ness. A car service com- industry expo — "my Super
pany in New Jersey, Empire Bowl" — "we were bopping
couldn't even find enough up and down aisles like
chauffeurs and office work- nothing was happening."
ers to meet its needs. Then jittery clients started
Now? With stunning speed, sending emails. PR and
business in the United marketing expenses are
States — as well as in Eu- often the first budget item
rope and elsewhere — has that struggling companies
collapsed in the face of the cut. Martin offered clients
coronavirus and warnings discounts. And she asked
for everyone to stay home. her 16 staffers to take a 25%
Suddenly, no one needs a pay cut.
chauffeur. Most of her clients are stay-
"We went from full throttle ing put, for now. But Martin
to 90% revenue loss in three says she now wakes up with
weeks,'' said CEO David a knot in her stomach.
Seelinger. "We've been The shutdown of restau-
through 9/11. We've seen Few shoppers were in the St. Louis Galleria on Thursday, March 19, 2020. Most stores were shuttered. rants has stifled sales at
Associated Press
recessions. We've never D'Artagnan, a wholesaler
seen anything like this.'' growth has averaged a unemployment to shoot to only in hindsight. "Never in of high-end meat products
Seelinger spent last Sunday decent but unspectacular 8.8% by late this year. Other the course of my career that supplies the food ser-
laying off 750 of his 900 em- 2.3% since 2010. Yet the ex- economists see joblessness have I known the week a vice business.
ployees. pansion has been solid and going much higher than recession started,'' said Di- "We're going to go from 8%
"It was the most difficult day durable. Employers have that. ane Swonk, chief econo- growth to a huge decline,"
of my career,'' he said. added jobs for 113 straight As investors have grasped mist at the accounting and said Andy Wertheim, presi-
Never before has the U.S. months, the longest such the depth of the crisis, pan- consulting firm Grant Thorn- dent of the company in
economy screeched to streak on record. ic selling has set in. Since ton, who calculates that Union, New Jersey.
such a sudden, violent Just two weeks ago, the Feb. 12, the Dow Jones the downturn began in the Automakers, too, are reel-
stop. Its shutdown has in- government delivered a Industrial Average has first week of March as the ing. Until last week, the re-
flicted a case of whiplash blockbuster employment plunged 35%, wiping out economy all but locked search firm Cox Automo-
on Americans who had report: A healthy gain of vast household wealth and down. tive was forecasting 16.6
enjoyed a decade-plus of 273,000 of jobs in Febru- likely undermining people's At Stuyvesant Plaza, an of- million new-vehicle sales
gains from the job market, ary. A 3.5% unemployment confidence and willingness fice complex and shopping this year, down only slightly
the stock market and a rate, a 50-year low. to spend. center outside Albany, from 2019. Now, said Mi-
steady economic expan- What's more, public confi- "I'm not sure that anyone New York, sales from shops, chelle Krebs, a Cox analyst,
sion. The economy is cra- dence was up. Consumers honestly has any sense of restaurants and fitness cen- it appears sales could drop
tering into what looks like a were spending. Incomes how this ultimately resolves ters had posted double- as low as 14 million.
deep recession. Millions will were rising. Layoffs were and on what sort of timeta- digit increases in January "Things are changing by the
likely lose jobs by summer. rare. ble,'' said Daniel Feldman, and February. hour," said Jeff Aznavorian,
"The economy has never In just a couple of weeks, a former U.S. diplomat who And then "the world turned president of Clips & Clamps,
gone from healthy to disas- it's all ended with the shut- counsels corporations for upside down," said Ed Sw- a Michigan auto supplier.
ter so quickly," said Jason down of most business ac- the law firm Covington & yer, president of the plaza. Orders and shipments
Furman, who was President tivity nationwide, and a de- Burling. Now, he's waiving rent for might hit zero next week.
Barack Obama's top eco- structive recession seems Policymakers are strain- two weeks for his 60 ten- Aznavorian worries about
nomic adviser and is now a inevitable. Goldman Sachs ing to help. The Federal ants, hoping to help them his cash flow. Even when
professor at Harvard's Ken- expects the economy to Reserve has slashed its survive. The restaurants, sales eventually rebound,
nedy School. shrink at a sickening 24% benchmark interest rate in particular, are suffering he won't be collecting
"In the financial crisis,'' Fur- annual rate in the April- to near zero and is trying from New York state's order customer payments for
man noted, "the housing June quarter. That would to ensure that companies to close all eateries except months. He's having trouble
bubble burst in 2006, the be, by far, the worst quar- maintain access to the take-out and delivery. Sw- sleeping.
first financial tremors were terly drop on record. Just short-term credit they need yer is offering no-interest "I feel the freight train com-
in 2007 and the major finan- days before, Goldman for payrolls and other ex- loans to some of the busi- ing at me,'' he said.
cial events were spread had projected a 5% annual penses. Congress and the nesses. For now, many U.S. house-
out from February through drop in that period. White House are preparing "I feel like it's a bottomless holds are coping — work-
September of 2008. What This week, economists say an enormous stimulus pro- pit, and we just don't know ing from home and still
would take years in a finan- the government could re- gram that includes sending how bad it is and what the holding on to jobs. Some of
cial crisis has happened in port that up to 3 million checks to households and duration is," he said. them may even be manag-
days in this health crisis.'' people applied for un- ensuring some paid sick A few weeks ago, said Nich- ing to save money, "which
Since the Great Recession employment benefits last and family leave. olas Calio, CEO of Airlines will give us more resources
ended in 2009, the econ- week, which would eas- Typically, economists don't for America, an industry later,'' said Scott Hoyt, se-
omy has risen for a record ily set a record. IHS Markit recognize a recession until association and lobbying nior director of consumer
11 years. It hasn't exactly predicts 7 million job losses long after it's begun, the group, airliners were run- economics at Moody's
been a boom. Annual from April to June and for warning signs apparent ning 85% to 100% full. Now, Analytics.q