PNC Bank is closing 19 branches across the US in February, including locations in Illinois, Texas, Alabama, New Jersey, Ohio, Florida, and Indiana.
The bank plans to help clients transition to nearby branches. The closures come as Rep. Brendan Boyle (D-PA) called out a “banking crisis” and called for a pause in interest rate hikes by the Federal Reserve.
“I respect the independence of the Fed. They are obviously going to independently make that decision. But it doesn’t preclude me or any other member of Congress or any other citizen from speaking up and pointing out that the Fed has raised rates so steeply, so quickly that that is having a profound effect on our economy,” Boyle said.
“By their own measures, they are going to cause unemployment as a result of what they’re doing, an increase in unemployment, for which they have no real response. So, I believe a pause here is appropriate. We still, as we’ve been reminded today, don’t know the full extent of the banking crisis.”
“So, I think a pause would be a wise decision. We do not want to have a mistake of going so extreme in the rate hikes that we end up bringing about a recession that is completely unnecessary.”
Additionally, a CNBC survey found that 70% of Americans feel financially stressed, with 60% attributing their stress to inflation caused by President Biden’s policies. The year 2024 has brought forth a multitude of challenges for businesses across the United States, reflecting a landscape fraught with economic uncertainties, labor shortages, and supply chain disruptions.
The economic outlook for 2024 has been clouded by a sense of pessimism, with a significant proportion of US businesses expressing concerns about the stagnation or deterioration of economic conditions compared to the previous year.
Survey findings highlight that approximately 62% of businesses anticipate the economy to remain the same (24%) or worsen (38%) relative to 2023, a year characterized by underwhelming sales performance. Notably, this prevailing sentiment of cautiousness is more pronounced among small and medium-sized enterprises (SMEs) at 68%, compared to large enterprises at 58%.
The subdued expectations of economic improvement, particularly in the first quarter, underscore the lingering apprehensions and uncertainties surrounding the trajectory of the US economy in 2024.
Inflation and current economic conditions have emerged as the foremost macroeconomic concerns among US businesses, with 27% of respondents highlighting these as their top worries. The labor/skills shortage (20%), rising interest rates (18%), and supply chain disruptions (13%) further compound the intricate web of challenges faced by businesses.
The industry-specific nuances reveal distinct areas of apprehension, with software and IT services companies particularly perturbed by high interest rates and potential military conflicts. Notably, inflation poses the greatest threat to healthcare (33%) and retail (32%) industries, while economic challenges dominate the concerns of software and IT services (37%) and finance (29%) sectors. The prevalence of labor/skills shortages among manufacturers (30%) and retailers (32%) further underscores the multifaceted nature of industry-specific challenges.
The survey findings underscore the persistent difficulties in borrowing for US businesses, with a notable proportion facing challenges in accessing capital. The high level of difficulty in borrowing, at +16, is a cause for concern, particularly among SMEs (+18) compared to larger enterprises (+10). The correlation between pessimism over the economy and borrowing difficulties is evident, with businesses projecting a worse economic outlook aligning with an amplified degree of borrowing challenges.
The survey unveils a mixed picture concerning capital budgeting, with a slightly higher proportion of US businesses planning to increase (22%) rather than decrease (20%) their 2024 capital budgets. Notably, large enterprises are less likely to decrease (15%) their capital budgets, indicating a potential driving force for capital spending in 2024.
However, the challenges persist, particularly for software and IT services companies, which are most likely to reduce capital budgets in 2024. Additionally, the hiring sentiment for 2024 reflects a diverse landscape, with SMEs demonstrating a stronger inclination towards increasing their total number of employees compared to large enterprises. The focus of hiring varies across industries, with a notable emphasis on customer experience, IT, and product development.
