There’s an unlikely silver lining to the recession that set in eight months ago: Despite the economic devastation, which tipped millions of people into unemployment, many American households are in relatively good shape, The New York Times’s Stacy Cowley reports.
Since April, consumer savings have increased, credit scores have surged to a record high and household debt has dropped.
The billions of dollars that banks set aside at the start of the crisis to cover anticipated losses on loans to customers have been largely untouched.
And lending at pawn shops and payday lenders, where business tends to boom during downturns, has been unexpectedly slow.
The pain may still be coming. Banks and other consumer lenders are bracing for financial stress next year, as millions of people remain out of work and the labor market’s rebound shows signs of stalling. But for now, households are weathering the turmoil largely because of the unusual nature of the current downturn.
Even as businesses around the world shut down this spring, executives at EDF Renewables were hopeful they would finish installing 99 wind turbines in southern Nebraska before a year-end deadline. Then, in early April, the pandemic dealt a big blow to the company.
A manager at a factory that was building the giant cylinders on which the turbines sit had died of the coronavirus, shutting down the plant. That and other setbacks — including construction workers at the site in Nebraska contracting the virus — have hampered EDF’s efforts to finish the $374 million project by the end of the year.
The American Wind Energy Association estimates that the pandemic could threaten a total of $35 billion in investment and about 35,000 jobs this year. The losses could grow if the coronavirus continues to disrupt the economy well into next year.
“Every part of the supply chain has been hit by this,” said John Hensley, the wind association’s vice president of research and analytics.
Wind turbines provide more than 7 percent of U.S. electricity and are the largest carbon-free energy source after nuclear power plants. Nebraska gets about 20 percent of its electricity from wind, and when it is complete, EDF’s project will have the capacity to meet the electricity needs of about 115,000 homes.
The wind energy business was growing about 10 percent a year before the pandemic. But industry officials now fear that projects under construction may be postponed or canceled. The industry had hoped Congress might provide aid to renewable energy, but it got little from the stimulus bills passed in the spring.
The industry did receive some help from the Treasury Department, which in May gave wind energy developers more time to complete construction in order to qualify for a federal tax credit. Businesses now have to finish projects they began in 2016 and 2017 within five years, up from four years previously.