Thursday, December 17, 2020

Stock Market Overview -- Consumers in "Survival Mode"

Consumers and Businesses in "Survival Mode"....

A very painful year is just around the corner, because it is estimated that about 38% of Americans will spend 2021 in survival mode, focusing on day-to-day activities to get themselves and their families through the year. 

Traditionally, the turn of the year was a moment when people used to set their new goals and resolutions, but this time around millions have been feeling the impact of the worst economic downturn this country has undergone in almost a century, so their outlook for what lies ahead is far from hopeful or optimistic.

In fact, another wave of business bankruptcies is prompting the layoffs of hundreds of thousands of workers days before Christmas, and now one out of three Americans have revealed that they cannot afford any holiday gifts this year.

The enormous financial pain of mass unemployment has created growing food and housing insecurity, with many engaging in disruptive behaviors that can be seen in the spike of social agitation in the cities, and increased levels of addiction as well as substance abuse.

Over two-thirds of Americans have experience acute financial difficulties throughout this year, due to job loss, the reduction or the removal of their household incomes or the decline of their emergency savings — confirming that a large share of the country is anticipating that many more setbacks are likely to come over the next few months.

A staggering 68% of Americans have experienced a substantial financial setback, with 23% losing their job or household income, 20% having an unexpected non-health emergency, 18% required to provide unexpected financial aid to family or friends, and 16% caring to a health emergency in their family.

Many households still remained concerned that the financial stresses could worsen next year, with 46% worried about the sanitary outbreak’s impact on the economy, while 35% are fearful of unexpected expenses, and 34% are anxious about the rising cost of food and other day-to-day essentials.

Those individuals who have been fortunate enough to remain employed through this recession are also coping with financial problems.

Roughly, one in three full-time workers have experienced a pay cut, due to the economic fallout of the health crisis.

All of these financial hardships are having a dramatic impact on holiday spending, as the “new normal“ leading millions of Americans to forgo holiday gifts this year — one in three Americans cannot afford to offer gifts to their loved ones this Christmas.

The past 12 months have been exceedingly painful for most Americans, and the prospect of more turbulence over the next 12 months is leading many to engage in damaging behavior patterns. 

The strains of living in social isolation can have a destructive effect on millions of lives, with a connection between alcohol use and stress triggered by pandemic-related shutdowns, confirmed with binge drinkers consuming an extra 19% for every week in lockdown.

Apparently, one in three Americans have been binge drinking during the current crisis, but with all things considered, it’s understandable why Americans have been so overwhelmed, and trying to find an escape, since everything continues to collapse around them.

In addition, the unemployment benefits that have helped 12 million people and their families to stay afloat are going to expire the day after Christmas, on top of all of the tragic events that we have already witnessed.

Furthermore, the CDC eviction moratorium is scheduled to lapse on New Year’s Day, so all of the delinquent renters that were kept housed during the recession, just because of the moratorium, are about to get consumed by historic tsunami of evictions.

An unprecedented bill of $70 billion in back rent and utilities will all come due on January 1st 2021, with up to 40 million people being threatened with eviction, over the coming months.

Furthermore, the new lockdowns are ravishing businesses that somehow managed to survive the first round of shutdowns, with many now in “panic mode,“ since they’re finding themselves on the verge of losing their businesses.

Roughly 17% of US restaurants have permanently shut down, since the start of the pandemic, as industry leaders warn of an “unprecedented economic decline,” with an additional 10,000 permanently closing before the end of the year.

This further confirms that the level of economic deterioration is running much faster, as we approach the end of the year.

The National Restaurant Association is lobbying Congress to pass new stimulus efforts that can stave off restaurant closures as the pandemic continues, and perhaps reverse some of the 110,000 permanent closures that have already occurred in 2020.

Eighty-seven percent of full-service restaurants have reported an average 37% decline in revenue, with 83% of them expecting sales to be even worse over the next three months as the virus continues to attack the United States.

The restaurant industry is only one of the sectors on the brink of a financial catastrophe, but actually many small businesses are drowning right now. They had very little financial cushion to begin with as many of them are hand-to-mouth operations, and simply have no place to turn to except the government for financial assistance.

However, authorities remain unbothered by the struggles of citizens and the economy as mandates in several states have even been limiting outdoor services.

Small businesses dominate the service sector, which is where human contact is an essential part of their businesses.

The closings is these businesses could compound the economic damage of the coronavirus and lengthen the recovery, more than just representing losses to the various communities. It’s far easier for a business that survives the pandemic to rehire once conditions improve than for bankrupt owners to start over from scratch.

Permanent damage has already been done, at this stage, unless something is done, but, unfortunately, the US government remains in gridlock. The wreckage is already spread everywhere, with the collective suffering of business owners, due to the congressional indifferences.

All the policies in responses to the coronavirus have reeked havoc on small businesses, while benefiting big corporations.

The road ahead is certainly not going to get any easier as things continue to unravel, with much more anxiety taking over the lives of millions as the end of the year approaches.

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