Prologis CEO Expects Businesses to Operate with Higher Inventory Levels Post-Crisis

Prologis, Inc. (NYSE: PLD) chairman and CEO Hamid Moghadam said he expects businesses to operate with a higher level of inventories following the coronavirus crisis.

Speaking on an April 6 business update conference call, Moghadam noted that for approximately the past 20 years supply chains have been structured for efficiency. “People have been squeezing more and more inventory out of the system. The supply chains have been longer and longer, so they’re very vulnerable to disruption,” he said.

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Economic Uncertainty from Coronavirus to Remain High, Likely into May

Nareit Senior Economist Calvin Schnure said in an April 6 REIT Report podcast interview that uncertainty surrounding the coronavirus and its impact on the economy and markets will remain high, certainly through April and likely into May.

Schnure also noted that while REITs and broader stock indices are at a deep discount compared to pre-crisis levels, they are up from lows reached several weeks ago.

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Social distancing and employment loss in leisure and hospitality

The FRED Blog has used the Current Employment Statistics from the Establishment Data Survey from the Bureau of Labor Statistics before. Past posts cover the ups-and-downs of payroll employment in the information industry and the increasing proportion of women in the workforce.
Today, we use that rich data source to learn more about the reduction in overall payroll employment in March 2020—the first reduction in ten years.
The FRED graph above compares the job losses in the goods-producing industry (mining & lodging; construction; and manufacturing) with the job losses in the service-providing industry (trade, transportation & utilities; information; financial activities; professional and business services; education and health services; leisure and hospitality; and other services).
The bulk of the recent reduction in payroll employment occurred among service-providing activities; during the onset of the 2007-2009 recession, the largest reductions in payroll employment took place among goods-producing activities.
The social distancing to manage the COVID-19 pandemic has

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