How staying at home in 2020 affected the transportation industry: Part 3 : Debt as a life raft

We covered transportation equipment in Part 1 of this series and petroleum and coal products in Part 2 [[ ]]. Census Bureau data show that, as their incomes dropped, companies in these industries took out new, long-term debt. And that’s what we discuss here, in Part 3.
The FRED graph above shows “Long-Term Debt Due in More Than 1 Year: Other Long-Term Loans” data for both the transportation equipment manufacturing and petroleum and coal products manufacturing industries. And the graph lets us compare these industries’ debt levels now with their levels during the Great Recession of 2008-2009.
In the second quarter of 2020, transportation equipment manufacturers increased long-term debt by $30.8 billion, up from $250.2 billion in the first quarter of 2020. Petroleum and coal products also increased their debt, by $35.5 billion.
During the Great Recession, petroleum and coal products increased their debt for consecutive quarters, so their tactic of increasing debt now

Federal Reserve Source

Author: RealEstate