CARY, N.C. -

Auctions are pushing more vehicles through the wholesale system. Dealerships are seeing increases in retail-vehicle sales. Finance companies are building their portfolios, too.

Might seem like a pandemic isn’t even impacting daily life, right?

While the automotive industry has been a bright spot in recent weeks, an array of business owners, economic experts and policymakers are striking a cautionary tone as the U.S. and other parts of the world try to rebound from job losses and diminished revenues because of COVID-19. Federal Reserve chair Jerome Powell looked to set the scene when he appeared at a hearing hosted by the U.S. House Financial Services Committee just before Fourth of July.

“As the economy reopens, incoming data are beginning to reflect a resumption of economic activity: Many businesses are opening their doors, hiring is picking up, and spending is increasing. Employment moved higher, and consumer spending rebounded strongly in May. We have entered an important new phase and have done so sooner than expected. While this bounce back in economic activity is welcome, it also presents new challenges — notably, the need to keep the virus in check,” Powell told lawmakers.

“While recent economic data offer some positive signs, we are keeping in mind that more than 20 million Americans have lost their jobs, and that the pain has not been evenly spread,” Powell continued. “The rise in joblessness has been especially severe for lower-wage workers, for women, and for African Americans and Hispanics. This reversal of economic fortune has caused a level of pain that is hard to capture in words as lives are upended amid great uncertainty about the future.

“Output and employment remain far below their pre-pandemic levels,” Powell went on to say. “The path forward for the economy is extraordinarily uncertain and will depend in large part on our success in containing the virus. A full recovery is unlikely until people are confident that it is safe to reengage in a broad range of activities.”

Kronos, a provider of workforce management and human capital management cloud solutions, provided some updated data this week associated with some of the trends Powell referenced.

Kronos reported that in alignment with the national Fourth of July holiday observance, total volume of shifts worked decreased by 11.4% from June 29 through July 5, mirroring — and, in fact, falling short of — the decline in shifts that occurred the week of July 4 of last year (down 26.9%).

According to the latest U.S. Workforce Activity Report from Kronos, prior to the July 4 holiday, U.S. businesses had grown shifts by 32% since shift work hit “the bottom” during the week ending April 12. Overall, shift volume remains down 24.3% since the week ending March 15 — the last week of “normal” shift work activity before the U.S. declared a national emergency.

Despite the rebound from that “bottom” in terms of shifts worked, other Kronos data released this week showed how an economic rebound still is a work in progress, so to speak.

The firm indicated the delta between employee terminations — which includes both voluntary and involuntary turnover — and new employee hiring widened during the week ending July 5. Prior to COVID-19, Kronos said this ratio stood at nearly 1 termination for every 1 new hire; yet it currently stands at 2.8-to-1, the nation’s largest delta since the 3.2-1 ratio that occurred when employee shifts hit “the bottom” the week ending April 12.

“Over the past six weeks, we have seen the national economic outlook begin to temper: The upward trendline of shifts, peppered with holiday-related declines correlating with Memorial Day and July 4, has slowed; the delta between terminations and hirings continues to swell; and industries continue to recover shifts at varying paces based on state reopenings, restrictions on travelers and inconsistent consumer demand,” Kronos vice president Dave Gilbertson said in a news release that accompanied the latest data.

“While last week’s July 4-related shift decrease was not as large as expected based on historical data, we can’t yet come to any conclusions based on a single week — especially since the holiday fell on a weekend — which may impact vacation for a second week,” Gilbertson continued. “Data over the next several weeks should indicate whether the relative strength of recovery is enough to reverse slowing shift growth amid nationwide COVID-19 case spikes.”

Global view of potential rebound

Of course, pandemic-created economic problems are not limited to just the U.S. S&P Global Ratings offered a worldwide perspective in one of its newest reports.

S&P Global Ratings indicated the COVID-19-led recession will likely weigh on credit metrics well into 2023 from the combination of lost output and debt overhang, threatening corporate solvency. The shape of recovery will differ from previous crises, with a wide range of outcomes across industries and geographies, and accelerating some secular industry shifts, according to the firm report titled, “Global Credit Conditions: The Shape of Recovery: Uneven, Unequal, Uncharted.”

S&P Global Ratings acknowledged the pandemic will likely leave “profound” scars on the world economy. Amid a deeper hit than initially anticipated in emerging markets, analysts now forecast a full-year contraction in global GDP of 3.8%.

The firm went on to state the dire effect of extended lockdowns on employment and consumer confidence also means that recovery will take longer than expected, from 2021 through 2023.

“While we estimate the global economy will begin to rebound in the second half of the year, the risk that this won’t materialize, and that the drag on consumer demand and business activity will persist, is high,” said Alexandra Dimitrijevic, global head of research at S&P Global Ratings.

“At the same time, any premature pullback in fiscal and monetary stimulus would not only hurt consumers and small businesses, but could roil financial markets, which have taken a more optimistic tone than suggested by economic and credit fundamentals,” Dimitrijevic continued.

“On a positive note, the crisis could represent an opportunity for governments to support the recovery through infrastructure investment and support a green, digital and more sustainable economy,” Dimitrijevic went on to say. “Overall, the shape of recovery will be uneven, unequal, and uncharted — but one thing is certain: global debt will likely take another step up.”

View from small businesses

Many dealerships certainly could fall into the small-business category of the economy.

On Wednesday, the National Small Business Association (NSBA) released a new survey focused on how COVID-19 is impacting America’s small businesses and what they anticipate in the coming months ahead. The survey showed modest improvements in small-business confidence and economic outlook as well as a lower overall impact of the pandemic.

“Despite these gains in outlook, COVID-19 continues to wreak widespread economic hardship and insecurity among small businesses as a result of the near-constant changing status of the pandemic,” NSBA president and chief executive officer Todd McCracken said in a news release. “Business and job growth in this turbulent environment are virtually impossible for most small businesses.”

The survey results described a small-business community slightly better off today than it was two months ago, but a far fall from where it stood economically back in January.

While the majority of small businesses (69%) said they are very concerned about the coronavirus, that number is down from 85% registered two months ago. The survey also revealed that two-in-three small-businesses say they are still experiencing reduced customer demand, however that is down from 80% in April.

Not only is the pandemic resulting in massive drops in demand, but 82% of surveyed business owners have also made workspace changes costing $11,729 on average for the initial set-up with ongoing monthly costs averaging around $1,800.

Furthermore, just one-third of small businesses are very confident they will fully recover from the pandemic and economic downturn, according to the NSBA survey taken among 630 small-business owners June 16-23.

“Small-business owners are inherently optimistic and confident in their ability to run their business, however economic insecurity can become an insurmountable hurdle,” said NSBA chair Marc Amato of Walco Electric Co. in Providence, R.I. “Absent a clear path forward, we could see a notable reversal of the more positive small-business outlook we’re seeing now.”