Furloughs at Macy’s, Gannett, Gap show distress

Major companies signaled a new wave of economic distress Monday, sending hundreds of thousands of workers home without pay, as the Trump administration scrambled to get stimulus money to Americans already feeling the weight of unpaid bills.

Macy’s announced it will furlough most of its 125,000 workers as sales evaporated with the shuttering of 775 stores. Kohl’s and Gap also announced furloughs of about 80,000 each. Media giant Gannett announced furloughs for newspaper employees who earn more than $38,000 a year and pay cuts across the company. Sysco, the country’s largest food distributor, also confirmed thousands of furloughs and layoffs of undisclosed number of workers worldwide.

The massive cuts have prompted some economists to predict the unemployed could top an eye-popping 40 million by mid-April, with deep economic consequences for workers struggling to make rent and mortgages amid public health isolation orders.

The rest of the economy isn’t doing much better. Oil prices sank to an 18-year low Monday from collapsing demand; Texas manufacturing activity and outlook plummeted to a record low; and a new forecast from IHS Markit estimates that “it will likely take two to three years for most economies to return to their pre-pandemic levels of output.”

“There isn’t much question that this is going to get even worse before it gets better,” said Julia Coronado, president of MacroPolicy Perspectives in New York. “The big question now is how quickly relief money can get to Americans and small businesses.”

Indeed, the tanking economy has ratcheted up the pressure on the Trump administration to turn the largest stimulus package in American history into immediate relief for businesses and workers.

The Treasury Department, in particular, faces a staggering list of tasks as it tries to rapidly create massive new federal programs aimed at shielding Americans from the economic impact.

The congressional package signed into law by President Donald Trump on Friday includes a massive increase in unemployment benefits and direct checks of $1,200 to more than 100 million American taxpayers. It also includes close to $400 billion in loans to small businesses, as well as more than $500 billion in a fund that can go to corporations, cities and states.