This article was published by The McAlvany Intelligence Advisor on Wednesday, April 8, 2020: 

Consumers and small business owners who are also Bible believers often open Psalms 31 in times like these, to read: “My hope is in the LORD … Be of good courage, and he shall strengthen your heart, all ye that hope in the LORD.”

Those who aren’t are telling pollsters that things are bad and likely to get worse.

taken by the Conference Board, the University of Michigan, the New York and the National Federation of Business (NFIB) are consistent: consumer and business sentiment is taking a dreadful hit thanks to the “social distancing” and “sheltering at home” protocols put in place last month to fight the virus.

With 250 million Americans affected, or about 75 percent of the country’s population, the results, although widely anticipated, were worse than expected.

The Bank of New York reported on Monday thatits latest Survey of Consumer Expectations, which measured consumers’ expectations that they might shortly become unemployed, jumped to the highest level seen since it began in 2013. The bank also noted a sharp decline in expectations for in income and spending.

The NFIB’s survey, which focused on small business (businesses with fewer than 500 employees), showed that owners’ optimism about the near future fell in March to 96.4, an 8.1-point decline from February, and the largest monthly drop in more than three decades. And this survey only covered the first half of the month, so, as a spokesman for the group said, “The sharp decline in employment is not reflected in the March survey data.”

The nation’s unemployment rate jumped to 4.4 percent in early April (up from 3.5 percent in March), but forecasters say the rate could jump to at least 10 percent in May, if not higher.

Surveys from the Conference Board and the University of Michigan also reflected the impact of the shutdown as well, showing deteriorating views on income, spending, access to credit, housing, and the labor market. Lower-income workers are especially worried about losing their jobs.

However, the federal government is shoveling out cash to small business owners at record rates, estimated to be $2 billion per day. At that rate the $350 billion allocated to help small businesses stay afloat during the crisis will soon be exhausted, and politicians in are now talking up making additional billions available.

Some 40 percent of small businesses are at risk of going out of business for good. Many more are just hanging on in the absence of paying customers coming through their doors. Especially at risk are small restaurants, hair salons, small grocery stores, bakeries, delicatessens, small-scale manufacturers, and internet-related businesses such as web design and computer programming.

Also at risk is the one quarter of Americans working in the “gig” economy, such as Uber and Lyft drivers, free-lance writers, online sellers, and those renting out guest rooms to visitors through platforms like Airbnb.

Both believers and non-believers are taking heart. The virus infection “curve” is beginning to flatten and attention is now being directed at efforts to restart the after its sudden stop.

Forecasters attempting to see over the horizon range from those supporting a “V-shaped” recovery – a rebound of astonishing strength, to those supporting a “U-shaped” one – a longer recovery but a robust one nevertheless. Almost no one is predicting an “L-shaped” non-recovery.

Small business owners have the advantage of being exceptionally nimble, seeing and grasping new opportunities as they arise. The free market teaches that when demand revives, supply will follow shortly thereafter by entrepreneurs seeing and acting on them.

Whatever shape the recovery takes, the new that emerges will be stronger, and leave the nation healthier, safer, and the citizens much better informed about the dangers posed by offshore supply chains that can be manipulated by the nation’s enemies. Believers will once again have their hope strengthened: “For in Him our hearts have joy; in His Holy Name is our hope.” (Psalm 33:21).



Psalm 31 (NIV)

US March NFIB small business optimism index 96.4 vs 104.5 prior

The Wall Street Journal Newsletter: Crisis of Confidence

Small-Business Confidence in U.S. Economy Dropped in March – NFIB

Fox BusinessConsumer expectations plunge as coronavirus drags on economy, New York Fed finds

Definition of small business

Definition of a Gig worker

The McAlvany Intelligence AdvisorJust how bad is the U.S. Economy? The Waffle House Index just Flashed RED

Psalm 33 (NIV)

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