The U.S. economy grew slowly over the summer, adding to fears of a looming recession — but also keeping alive the hope that one might be avoided.
Gross domestic product, adjusted for inflation, returned to growth in the third quarter after two consecutive quarterly contractions, according to government data released Thursday. But consumer spending slowed as inflation ate away at households’ buying power, and the sharp rise in interest rates led to the steepest contraction in the housing sector since the first months of the pandemic.
The report underscored the delicate balance facing the Federal Reserve as it tries to rein in the fastest inflation in four decades. Policymakers have aggressively raised interest rates in recent months — and are expected to do so again at their meeting next week — in an effort to cool off red-hot demand, which they believe has contributed to the rapid increase in prices. But they are trying to do so without snuffing out the recovery entirely.
The third-quarter data — G.D.P. rose 0.6 percent, the Commerce Department said, a 2.6 percent annual rate of growth — suggested that the path to such a “soft landing” remained open, but narrow.
loss of purchasing power over time, meaning your dollar will not go as far tomorrow as it did today. It is typically expressed as the annual change in prices for everyday goods and services such as food, furniture, apparel, transportation and toys.
What causes inflation? It can be the result of rising consumer demand. But inflation can also rise and fall based on developments that have little to do with economic conditions, such as limited oil production and supply chain problems.
Is inflation bad? It depends on the circumstances. Fast price increases spell trouble, but moderate price gains can lead to higher wages and job growth.
Can inflation affect the stock market? Rapid inflation typically spells trouble for stocks. Financial assets in general have historically fared badly during inflation booms, while tangible assets like houses have held their value better.
President Biden cheered the report in a statement Thursday morning. “For months, doomsayers have been arguing that the U.S. economy is in a recession, and congressional Republicans have been rooting for a downturn,” he said. “But today we got further evidence that our economic recovery is continuing to power forward.”
By one common definition, the U.S. economy entered a recession when it experienced two straight quarters of shrinking G.D.P. at the start of the year. Officially, however, recessions are determined by a group of researchers at the National Bureau of Economic Research, who look at a broader array of indicators, including employment, income and spending.
Most analysts don’t believe the economy meets that more formal definition, and the third-quarter numbers — which slightly exceeded forecasters’ expectations — provided further evidence that a recession had not yet begun.
But the overall G.D.P. figures were skewed by the international trade component, which often exhibits big swings from one period to the next. Economists tend to focus on less volatile components, which have showed the recovery steadily losing momentum as the year has progressed. One closely watched measure suggested that private-sector demand stalled out almost completely in the third quarter.
Mortgage rates passed 7 percent on Thursday, their highest level since 2002.
“Housing is just the single largest trigger to additional spending, and it’s not there anymore; it’s going in reverse,” said Diane Swonk, chief economist at the accounting firm KPMG. “This has been a stunning turnaround in housing, and when things start to go really quickly, you start to wonder, what are the knock-on effects, what are the spillover effects?”
The third quarter was in some sense a mirror image of the first quarter, when G.D.P. shrank but consumer spending was strong. In both cases, the swings were driven by international trade. Imports, which don’t count toward domestic production figures, soared early this year as the strong economic recovery led Americans to buy more goods from overseas. Exports slumped as the rest of the world recovered more slowly from the pandemic.
Both trends have begun to reverse as American consumers have shifted more of their spending toward services and away from imported goods, and as foreign demand for American-made goods has recovered. Supply-chain disruptions have added to the volatility, leading to big swings in the data from quarter to quarter.
Few economists expect the strong trade figures from the third quarter to continue, especially because the strong dollar will make American goods less attractive overseas.
The Federal Reserve has embarked on an aggressive campaign to raise interest rates as it tries to tame the most rapid inflation in decades, an effort the central bank sees as necessary to restore price stability in the United States.
But what the Fed does at home reverberates across the globe, and its actions are raising the risks of a global recession while causing economic and financial pain in many developing countries.
Other central banks in advanced economies, from Australia to the eurozone, are also lifting rates rapidly to fight their inflation. And as the Fed’s higher interest rates attract money to the United States — pumping up the value of the dollar — emerging-market economies are being forced to raise their own borrowing costs to try to stabilize their currencies to the extent possible.
Altogether, it is a worldwide push toward more expensive money unlike anything seen before in the 21st century, one that is likely to have serious ramifications.
warned the damage could be particularly acute in poorer nations. Developing economies had already been dealing with a cost-of-living crisis because of soaring food and fuel prices, and now their American imports are growing steadily more expensive as the dollar marches higher.
The Fed’s moves have spurred market volatility and worries about financial stability, as higher rates elevate the value of the U.S. dollar, making it harder for emerging-market borrowers to pay back their dollar-denominated debt.
It is a recipe for globe-spanning turmoil and even recession. Despite that, the Fed is poised to continue raising interest rates. That’s because the Fed, like central banks around the world, is in charge of domestic economy goals: It’s supposed to keep inflation slow and steady while fostering maximum employment. While occasionally called “central banker to the world” because of the dollar’s foremost position, the Fed goes about its day-to-day business with its eye squarely on America.
loss of purchasing power over time, meaning your dollar will not go as far tomorrow as it did today. It is typically expressed as the annual change in prices for everyday goods and services such as food, furniture, apparel, transportation and toys.
What causes inflation? It can be the result of rising consumer demand. But inflation can also rise and fall based on developments that have little to do with economic conditions, such as limited oil production and supply chain problems.
Is inflation bad? It depends on the circumstances. Fast price increases spell trouble, but moderate price gains can lead to higher wages and job growth.
Can inflation affect the stock market? Rapid inflation typically spells trouble for stocks. Financial assets in general have historically fared badly during inflation booms, while tangible assets like houses have held their value better.
The threat facing the global economy — including the Fed’s role in it — is expected to dominate the conversation next week as economists and government officials convene in Washington for the annual meeting of the International Monetary Fund and World Bank.
In a speech at Georgetown University on Thursday, Kristalina Georgieva, the managing director of the I.M.F., offered a grim assessment of the world economy and the tightrope that central banks are walking.
“Not tightening enough would cause inflation to become de-anchored and entrenched — which would require future interest rates to be much higher and more sustained, causing massive harm on growth and massive harm on people,” Ms. Georgieva said. “On the other hand, tightening monetary policy too much and too fast — and doing so in a synchronized manner across countries — could push many economies into prolonged recession.”
Noting that inflation remains stubbornly high and broad-based, she added: “Central banks have to continue to respond.”
The World Bank warned last month that simultaneous interest-rate increases around the world could trigger a global recession next year, causing financial crises in developing economies. It urged central banks in advanced economies to be mindful of the cross-border “spillover effects.”
“To achieve low inflation rates, currency stability and faster growth, policymakers could shift their focus from reducing consumption to boosting production,” David Malpass, the World Bank president, said.
Trade and Development Report said.
So far, major central banks have shown little appetite for stopping their inflation-busting campaigns. The Fed, which has made five rate increases this year, has signaled that it plans to raise borrowing costs even higher. Most officials expect to increase rates by at least another 1.25 percentage points this year, taking the policy rate to a range of 4.25 to 4.5 percent from the current 3 to 3.25 percent.
Even economies that are facing a pronounced slowdown have been lifting borrowing costs. The European Central Bank raised rates three-quarters of a point last month, even though the continent is approaching a dark winter of slowing growth and crushing energy costs.
according to the World Bank. Food costs in particular have driven millions further into extreme poverty, exacerbating hunger and malnutrition. As the dollar surge makes a range of imports pricier for emerging markets, that situation could worsen, even as the possibility of financial upheaval increases.
“Low-income developing countries in particular face serious risks from food insecurity and debt distress,” Ngozi Okonjo-Iweala, director-general of the World Trade Organization, said during a news conference this week.
Understand Inflation and How It Affects You
In Africa, officials have been urging the I.M.F. and Group of 20 nations to provide more emergency assistance and debt relief amid inflation and rising interest rates.
“This unprecedented shock further destabilizes the weakest economies and makes their need for liquidity even more pressing, to mitigate the effects of widespread inflation and to support the most vulnerable households and social strata, especially young people and women,” Macky Sall, chairman of the African Union, told leaders at the United Nations General Assembly in September.
To be sure, central bankers in big developed economies like the United States are aware that they are barreling over other economies with their policies. And although they are focused on domestic goals, a severe weakening abroad could pave the way for less aggressive policy because of its implications for their own economic outlooks.
Waning demand from abroad could ease pressure on supply chains and reduce prices. If central bankers decide that such a chain reaction is likely to weigh on their own business activity and inflation, it may give them more room to slow their policy changes.
“The global tightening cycle is something that the Fed has to take into account,” said Megan Greene, global chief economist for the Kroll consulting firm. “They’re interested in what is going on in the rest of the world, inasmuch as it affects their ability to achieve their targets.”
his statement.
But many global economic officials — including those at the Fed — remain focused on very high inflation. Investors expect them to make another large rate increase when they meet on Nov. 1-2.
“We’re very attentive” to international spillovers to both emerging markets and advanced economies, Lisa D. Cook, a Fed governor, said during a question-and-answer session on Thursday. “But our mandate is domestic. So we’re very focused on inflation as it evolves in this country.”
Raghuram Rajan, a former head of India’s central bank and now an economist at the University of Chicago, has in the past pushed the Fed to take foreign conditions into account as it sets policy. He still thinks that measures like bond-buying should be pursued with an eye on global spillovers.
But amid high inflation, he said, central banks are required to pay attention to their own mandates to achieve price stability — even if that makes for a stronger dollar, weaker currencies and more pain abroad.
“The basic problem is that the world of monetary policy dances to the Fed’s tune,” Mr. Rajan said, later adding: “This is a problem with no easy solutions.”
Last year, Klaussner Home Furnishings was so desperate for workers that it began renting billboards near its headquarters in Asheboro, N.C., to advertise job openings. The steep competition for labor drove wages for employees on the furniture maker’s production floor up 12 to 20 percent. The company began offering $1,000 signing bonuses to sweeten the deal.
“Consumer demand was through the roof,” said David Cybulski, Klaussner’s president and chief executive. “We just couldn’t get enough labor fast enough.”
But in recent months, Mr. Cybulski has noticed that frenzy die down.
Hiring for open positions has gotten easier, he said, and fewer Klaussner workers are leaving for other jobs. The company, which has about 1,100 employees, is testing performance rewards to keep workers happy rather than racing to increase wages. The $1,000 signing bonus ended in the spring.
“No one is really chasing employees to the dollar anymore,” he said.
By many measures, the labor market is still extraordinarily strong even as fears of a recession loom. The unemployment rate, which stood at 3.7 percent in August, remains near a five-decade low. There are twice as many job openings as unemployed workers available to fill them. Layoffs, despite some high-profile announcements in recent weeks, are close to a record low.
Walmart and Amazon have announced slowdowns in hiring; others, such as FedEx, have frozen hiring altogether. Americans in July quit their jobs at the lowest rate in more than a year, a sign that the period of rapid job switching, sometimes called the Great Resignation, may be nearing its end. Wage growth, which soared as companies competed for workers, has also slowed, particularly in industries like dining and travel where the job market was particularly hot last year.
More broadly, many companies around the country say they are finding it less arduous to attract and retain employees — partly because many are paring their hiring plans, and partly because the pool of available workers has grown as more people come off the economy’s sidelines. The labor force grew by more than three-quarters of a million people in August, the biggest gain since the early months of the pandemic. Some executives expect hiring to keep getting easier as the economy slows and layoffs pick up.
“Not that I wish ill on any people out there from a layoff perspective or whatever else, but I think there could be an opportunity for us to ramp some of that hiring over the coming months,” Eric Hart, then the chief financial officer at Expedia, told investors on the company’s earnings call in August.
The State of Jobs in the United States
Economists have been surprised by recent strength in the labor market, as the Federal Reserve tries to engineer a slowdown and tame inflation.
Taken together, those signals point to an economic environment in which employers may be regaining some of the leverage they ceded to workers during the pandemic months. That is bad news for workers, particularly those at the bottom of the pay ladder who have been able to take advantage of the hot labor market to demand higher pay, more flexible schedules and other benefits. With inflation still high, weaker wage growth will mean that more workers will find their standard of living slipping.
But for employers — and for policymakers at the Federal Reserve — the calculation looks different. A modest cooling would be welcome after months in which employers struggled to find enough staff to meet strong demand, and in which rapid wage growth contributed to the fastest inflation in decades. Too pronounced a slowdown, however, could lead to a sharp rise in unemployment, which would almost certainly lead to a drop in consumer demand and create a new set of problems for employers.
Recent research from economists at the Federal Reserve Banks of Dallas and St. Louis found that there had been a huge increase in poaching — companies hiring workers away from other jobs — during the recent hiring boom. If companies become less willing to recruit workers from competitors, and to pay the premium that doing so requires, or if workers become less likely to hop between jobs, that could lead wage growth to ease even if layoffs don’t pick up.
There are hints that could be happening. A recent survey from another career site, ZipRecruiter, found that workers have become less confident in their ability to find a job and are putting more emphasis on finding a job they consider secure.
“Workers and job seekers are feeling just a little bit less bold, a little bit more concerned about the future availability of jobs, a little bit more concerned about the stability of their own jobs,” said Julia Pollak, chief economist at ZipRecruiter.
Some businesses, meanwhile, are becoming a bit less frantic to hire. A survey of small businesses from the National Federation of Independent Business found that while many employers still have open positions, fewer of them expect to fill those jobs in the next three months.
More clues about the strength of the labor market could come in the upcoming months, the time of year when companies, including retailers, traditionally ramp up hiring for the holiday season. Walmart said in September that this year it would hire a fraction of the workers it did during the last holiday season.
The signs of a cool-down extend even to leisure and hospitality, the sector where hiring challenges have been most acute. Openings in the sector have fallen sharply from the record levels of last year, and hourly earnings growth slowed to less than 9 percent in August from a rate of more than 16 percent last year.
Until recently, staffing shortages at Biggby Coffee were so severe that many of the chain’s 300-plus stores had to close early some days, or in some cases not open at all. But while hiring remains a challenge, the pressure has begun to ease, said Mike McFall, the company’s co-founder and co-chief executive. One franchisee recently told him that 22 of his 25 locations were fully staffed and that only one was experiencing a severe shortage.
“We are definitely feeling the burden is lifting in terms of getting people to take the job,” Mr. McFall said. “We’re getting more applications, we’re getting more people through training now.”
The shift is a welcome one for business owners like Mr. McFall. He said franchisees have had to raise wages 50 percent or more to attract and retain workers — a cost increase they have offset by raising prices.
“The expectation by the consumer is that you are raising prices, and so if you don’t take advantage of that moment, you are going to be in a pickle,” he said, referring to the pressure to increase wages. “So you manage it by raising prices.”
So far, Mr. McFall said, higher prices haven’t deterred customers. Still, he said, the period of severe staffing shortages is not without its costs. He has seen a loss in sales, as well as a loss of efficiency and experienced workers. That will take time to rebuild, he said.
“When we were in crisis, it was all we were focused on,” he said. “So now that it feels like the crisis is mitigating, that it’s getting a little better, we can now begin to focus on the culture in the stores and try to build that up again.”
LOUGHTON, England — After nearly two decades of renting in one of the world’s most expensive cities, the Szostek family began the week almost certain that they would finally own a home.
Transplants to London who fell in love as housemates, Laetitia Anne, an operations manager from France and her husband, Maciej Szostek, a chef from Poland, had long dreamed of being homeowners. They had waited out the uncertain pandemic years and worked overtime shifts to save up for the deposit for a mortgage on a three-bedroom apartment in a neighborhood outside London. Their 13-year-old twins were excited they could finally paint the walls.
That was before British financial markets were upended, with the pound briefly hitting a record low against the dollar on Monday and interest rates soaring so rapidly that the Bank of England was forced to intervene to restore order. The economic situation was so volatile that some mortgage lenders temporarily withdrew many products.
By Tuesday evening, the Szostek family learned the bad news: The loan that they were close to securing had fallen through. Suddenly, they were scrambling to find another lender as interest rates climb higher.
loss of purchasing power over time, meaning your dollar will not go as far tomorrow as it did today. It is typically expressed as the annual change in prices for everyday goods and services such as food, furniture, apparel, transportation and toys.
What causes inflation? It can be the result of rising consumer demand. But inflation can also rise and fall based on developments that have little to do with economic conditions, such as limited oil production and supply chain problems.
Is inflation bad? It depends on the circumstances. Fast price increases spell trouble, but moderate price gains can lead to higher wages and job growth.
Can inflation affect the stock market? Rapid inflation typically spells trouble for stocks. Financial assets in general have historically fared badly during inflation booms, while tangible assets like houses have held their value better.
Rising home prices and income inequality priced many out of the market, but for strivers who aspired to homeownership, the latest ruptures to the economy hit hard. The release of the new government’s sweeping plan for debt-funded tax cuts led to a big uptick in interest rates this week that roiled the mortgage market. Many homeowners are calculating their potential future mortgage payments with alarm, amid soaring energy and food prices and a general cost-of-living crisis.
Before they were informed they were no longer eligible, the family had been in the final stages of applying for a five-year fixed-rate mortgage on an apartment priced at £519,000, or around $576,000, in the leafy parish of Loughton, a town about 40 minutes north of London by train where the streets fill with students in the afternoon and the properties span from lower-end apartments to million-pound mansions.
according to the Financial Conduct Authority. And more than a third of all mortgages are on fixed rates that expire within the next two years, most likely exposing those borrowers to higher rates, too. By contrast, the vast majority of mortgages in the United States are locked in for 30-year fixed terms.
And the abrupt surge in interest rates could threaten to set off a housing market crisis, analysts at Oxford Economics wrote in a note on Friday, adding that if mortgage rates stayed at the levels now being offered, that would suggest that house prices were around 30 percent overvalued “based on the affordability of mortgage payment.”
“This just adds a significant further strain to finances in the order of hundreds of pounds a month,” said David Sturrock, a senior research economist at the Institute for Fiscal Studies, adding that the squeeze on household budgets will affect the broader economy.
Uncertainty and even panic was clear this week, with many homeowners seeking financial advice. Mortgage brokers said they were receiving a higher volume of inquiries than normal from people stressed about refinancing their loans.
“You can feel the fear in people’s voices,” said Caroline Opie, a mortgage broker working with Ms. Anne who said she had not seen this level of worry in a long time. One couple this week even called her the morning of their wedding, she said, to set an appointment to refinance their mortgage next week.
the war in Ukraine. “Something has got to give,” he said. “Prices are too high anyway.”
To save for the deposit, Mr. Szostek, 37, picked up construction shifts and cleaning jobs when restaurants closed during Covid-19 lockdowns. A £5,000 inheritance from Ms. Anne’s grandfather went into their deposit fund. At a 3.99 percent interest rate, the mortgage repayments were set to be about £2,200 a month.
“I wanted to feel at home for real,” said Ms. Anne, adding she would have been the first in her family to own a property. Mr. Szostek called it “a lifelong dream.”
On Wednesday night, that dream still seemed in reach: The mortgage dealer Ms. Opie had found another loan, which they rushed to apply for.
The higher interest rate — 4.6 percent — will mean their new monthly mortgage payment will be £2,400, the upper limit of what the Szostek family can afford. Still, they felt lucky to secure anything at all, hoping it will mean their promises to their children — of bigger bedrooms, more space, freedom to decorate how they like — will materialize.
They would wait to celebrate, Mr. Szostek said, until they had the keys in hand.
MIAMI–(BUSINESS WIRE)–CorpHousing Group Inc. (“CorpHousing,” “CHG”, or the “Company”) (Nasdaq: CHG), which utilizes a long-term lease, asset-light business model to acquire and manage a growing portfolio of short-term rental properties in major metropolitan cities, today announced financial results for the second quarter (“Q2 2022”) and six months ended June 30, 2022.
2022 Second Quarter Financial Overview Compared to 2021 Second Quarter
Net rental revenue rose 144% to $10.2 million from $4.2 million
Gross profit improved to $2.9 million, or 28% of net rental revenue, from $0.1 million, or 3.5% of net rental revenue
Income before provision for income taxes improved to $1.5 million from a loss of $(1.1) million
Net income improved to $0.8 million, or $0.04 per diluted share, from a net loss of $(1.1) million
EBITDA was $2.1 million compared to EBITDA of $(0.6) million
2022 Six Months Financial Overview Compared to 2021 Six Months
Net rental revenue rose 158% to $19.3 million from $7.5 million
Gross profit improved to $5.4 million, or 28% of net rental revenue, from a loss of $(0.4) million
Income before provision for income taxes improved to $2.9 million from a loss of $(2.4) million
Net income improved to $2.2 million, or $0.10 per diluted share, from a net loss of $(2.4) million
EBITDA was $4.1 million compared to EBITDA of $(1.8) million
Operational Highlights
Generated gross proceeds of $13.5 million via Initial Public Offering (August 2022)
Commenced trading on Nasdaq Capital Market (August 2022)
For the six months ended June 30, 2022, managed 590 units under long-term lease
Subsequent to June 30, 2022, CHG announced the signings of separate 15-year Master Lease Agreements (“MLA”) with two luxury hotels in New York City and an historic boutique hotel in New Orleans
Inclusive of these new MLAs, CHG’s portfolio currently consists of 10 hotel properties in eight U.S. cities comprising 1,037 units
Based on current MLA pipeline, CHG expects more than 1,200 units to be operational in 10 cities during Q4 2022
“We are excited to announce our Q2 results, which we believe reflect the success of our asset-light business model, the vibrancy of our target markers, and the opportunities inherent in our industry,” said Brian Ferdinand, Chairman and Chief Executive Officer of CorpHousing Group. “Q2 2022 net rental revenue increased by 144%, gross profit increased 19-fold, net income improved by $1.9 million, and EBITDA for the quarter was $2.1 million. Our available units for rent increased quarter over quarter, occupancy rates improved as the effects of COVID pandemic wane, and we realized certain efficiencies from scale.
“We currently operate hotels under long-term lease agreements in Boston, Denver, Los Angeles, greater Miami, New York City, Washington, DC, and Seattle, and will commence operations in New Orleans in mid-October.
We are in various stages of negotiation with a variety of potential partners that represent thousands of additional hotel units in destination locations across the United States and Europe. We believe that we are creating win-win opportunities by providing property owners the ability to create stable cash flow streams to maximize returns on their properties, which have been significantly impacted by restrictions on travel and leisure activities due to the COVID-19 pandemic. CHG then markets these units under our customer facing LuxUrbanTM brand to increase occupancy rates and drive operational efficiencies, thus creating the opportunity to generate high margin, recurring and predictable revenue streams. Supported by a strengthened balance sheet and seasoned team of executives, we believe that are well positioned to advance our highly scalable, predictable, and profitable business model and look forward to our future with confidence.”
Q2 2022 Overview
Net rental revenue in Q2 2022 increased 144% to $10.2 million from $4.2 million in the second quarter ended June 30, 2021 (“Q2 2021”), driven primarily by an increase in average units available to rent from 376 in Q2 2021 to 565 at Q2 2022, as well as better occupancy rates and average daily rates (“ADRs”) over this period.
Cost of revenue, which includes rental expenses for available units to rent, rose to $7.3 million in Q2 2022 from $4.0 million in Q2 2021, due primarily to the increase in size of CHG’s rental unit portfolio, as well as related increases in furniture rentals, cleaning costs, cable / WIFI costs and credit card processing fees.
Gross profit improved to $2.9 million, or 28% of net rental revenue, from $0.1 million, or 3.5% of net rental revenue. Higher gross profit and gross margin was primarily attributable to a reduction in the impact of COVID-19 on our operations, higher unit counts and better occupancy rates and ADRs.
Total general and administrative expenses in Q2 2022 increased to $0.9 million, or 9% of net rental revenue, from $0.7 million, or 18% of net rental revenue, in Q2 2021, attributable to an increased number of units in operation.
Income before provision for income taxes improved to $1.5 million from a loss of $(1.1) million, reflecting a significant increase in net rental revenue in Q2 2022 compared to Q2 2021 and the benefits of scale-driven operating efficiencies.
Net income improved to $0.8 million, or $0.04 per diluted share, compared to a net loss of $(1.1) million.
EBITDA rose to $2.1 million, or 21% of net rental revenue, in Q2 2022 compared to negative EBITDA of $(0.6) million.
For a discussion of the financial measures presented herein which are not calculated or presented in accordance with U.S. generally accepted accounting principles (“GAAP”), see “Note Regarding Use of Non-GAAP Financial Measures” below and the schedules to this press release for additional information and reconciliations of non-GAAP financial measures. The company presents non-GAAP measures such as EBITDA to assist in an analysis of its business. These non-GAAP measures should not be considered an alternative to GAAP measures as an indicator of the company’s operating performance.
Conference Call and Webcast
The Company will host a conference call on Tuesday, September 27, 2022 at 9:00 am Eastern Time to discuss the results.
Investors interested in participating in the live call can dial:
(877) 407-9753 – U.S.
(201) 493-6739 – International
A webcast of the event may be accessed via the following link: https://event.choruscall.com/mediaframe/webcast.html?webcastid=ltKz5SSV.
CorpHousing Group Inc.
CorpHousing Group (CHG) utilizes a long-term lease, asset-light business model to acquire and manage a growing portfolio of short-term rental properties in major metropolitan cities. The Company’s future growth focuses primarily on seeking to create “win-win” opportunities for owners of dislocated hotels, including those impacted by COVID-19 travel restrictions, while providing CHG favorable operating margins. CHG operates these properties in a cost-effective manner by leveraging technology to identify, acquire, manage, and market them globally to business and vacation travelers through dozens of third-party sales and distribution channels, and the Company’s own online portal. Guests at the Company’s properties are provided Heroic Service™ under CHG’s consumer brands, including LuxUrban. CHG’s Heroic ServiceTM provides guests a hassle-free experience which exceeds their expectations with “Heroes” who respond to any issue in a timely, thoughtful, and thorough manner.
Forward Looking Statements
This press release contains forward-looking statements, including with respect to the expected closing of noted lease transactions and continued closing on additional leases for properties in the Company’s pipeline, as well the Company’s anticipated ability to commercialize efficiently and profitably the properties it leases and will lease in the future. These forward-looking statements are subject to a number of risks, uncertainties and assumptions, including those set forth under the caption “Risk Factors” in the prospectus forming part of the Company’s effective Registration Statement on Form S-1 (File No. 333-262114). Generally, such forward-looking information or forward-looking statements can be identified by the use of forward-looking terminology such as “plans”, “expects” or “does not expect”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates” or “does not anticipate”, or “believes”, or variations of such words and phrases or may contain statements that certain actions, events or results “may”, “could”, “would”, “might” or “will be taken”, “will continue”, “will occur” or “will be achieved”. Forward-looking information may relate to anticipated events or results including, but not limited to business strategy, leasing terms, high-level occupancy rates, and sales and growth plans. The financial projection provided herein are based on certain assumptions and existing and anticipated market, travel and public health conditions, all of which may change. The forward-looking information and forward-looking statements contained in this press release are made as of the date of this press release, and the Company does not undertake to update any forward-looking information and/or forward-looking statements that are contained or referenced herein, except in accordance with applicable securities laws.
The Company seeks to achieve profitable, long-term growth by monitoring and analyzing key operating metrics, including EBITDA. The Company defines EBITDA as net income before interest, taxes, and depreciation. The Company’s management uses this non-GAAP financial metric and related computations to evaluate and manage the business and to plan and make near and long-term operating and strategic decisions. The management team believes this non-GAAP financial metric is useful to investors to provide supplemental information in addition to the GAAP financial results. Management reviews the use of its primary key operating metrics from time-to-time. EBITDA is not intended to be a substitute for any GAAP financial measure and as calculated, may not be comparable to similarly titled measures of performance of other companies in other industries or within the same industry. The Company’s management team believes it is useful to provide investors with the same financial information that it uses internally to make comparisons of historical operating results, identify trends in underlying operating results, and evaluate its business.
A reconciliation of net income to EBITDA will be provided in the company’s Quarterly Report on Form 10-Q for the three and six months ended June 30, 2022 to be filed on September 26, 2022, under the section thereof entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Reconciliation of Unaudited Historical Results to EBITDA.”
Condensed Consolidated Balance Sheet
(Unaudited)
(unaudited)
June 30,
December 31,
2022
2021
ASSETS
Current Assets
Cash
$
556
$
6,998
Processor retained funds
4,616,255
56,864
Prepaid expenses and other current assets
512,939
166,667
Deferred offering costs
1,234,500
771,954
Security deposits – current
276,943
276,943
Total Current Assets
$
6,641,193
$
1,279,426
Other Assets
Furniture and equipment, net
8,944
11,500
Restricted cash
1,100,000
1,100,000
Security deposits – noncurrent
4,108,010
1,377,010
Operating lease right-of-use asset, net
49,941,971
—
Total Other Assets
55,158,925
2,488,510
Total Assets
$
61,800,118
$
3,767,936
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current Liabilities
Accounts payable and accrued expenses
$
5,301,053
$
4,209,366
Rents received in advance
4,071,095
1,819,943
Merchant cash advances – net of unamortized costs of $0 and $57,768, respectively
575,489
1,386,008
Loans payable – current portion
2,780,054
1,267,004
Loans payable – SBA – PPP Loan – current portion
815,183
815,183
Convertible loans payable – related parties – current portion
2,596,865
—
Loans payable – related parties – current portion
1,071,128
22,221
Operating lease liability – current
7,182,381
—
Income taxes payable
750,000
—
Total Current Liabilities
25,143,248
9,519,725
Long-Term Liabilities
Loans payable
545,789
925,114
Loans payable – SBA – EIDL Loan
800,000
800,000
Loans payable – related parties
—
496,500
Convertible loans payable – related parties
700,195
2,608,860
Line of credit
94,975
94,975
Deferred rent
—
536,812
Operating lease liability
43,962,492
—
Total Long-term Liabilities
46,103,451
5,462,261
Total Liabilities
71,246,699
14,981,986
Commitments and Contingencies
Stockholders’ Deficit
Members’ Deficit
—
(11,214,050
)
Common stock (shares authorized, issued and outstanding – 90,000,000; 21,675,001; 21,675,001; respectively)
216
—
Accumulated deficit
(9,446,797
)
—
Total Stockholders’ Deficit
(9,446,581
)
(11,214,050
)
Total Liabilities and Stockholders’ Deficit
$
61,800,118
$
3,767,936
Condensed Consolidated Statement of Operations
(Unaudited)
For the Three Months Ended
For the Six Months Ended
June 30, 2022
June 30, 2021
June 30, 2022
June 30, 2021
Rental Revenue
$
12,656,540
$
6,728,686
$
24,419,439
$
11,688,873
Refunds and Allowances
2,455,202
2,545,820
5,118,676
4,199,978
Net Rental Revenue
10,201,338
4,182,866
19,300,763
7,488,895
Cost of Revenue
7,344,720
4,035,238
13,930,882
7,920,531
Gross Profit (Loss)
2,856,618
147,628
5,369,881
(431,636
)
General and Administrative Expenses
Administrative and other
809,121
701,040
1,559,742
1,258,458
Professional fees
76,500
37,390
305,485
90,404
Total General and Administrative Expenses
885,621
738,430
1,865,227
1,348,862
Net Income (Loss) Before Other Income (Expense)
1,970,997
(590,802
)
3,504,654
(1,780,498
)
Other Income (Expense)
Other income
137,154
434
587,067
467
Interest and financing costs
(595,742
)
(542,764
)
(1,159,879
)
(660,007
)
Total Other Expenses
(458,588
)
(542,330
)
(572,812
)
(659,540
)
Income (Loss) Before Provision for Income Taxes
1,512,409
(1,133,132
)
2,931,842
(2,440,038
)
Provision for Income Taxes
Current
750,000
—
750,000
—
Net Income (Loss)
$
762,409
$
(1,133,132
)
$
2,181,842
$
(2,440,038
)
Basic and diluted earnings per common share
$
0.04
$
—
$
0.10
$
—
Basic and diluted weighted average number of common shares outstanding
21,675,001
—
21,315,747
—
Non-GAAP Financial Measures
To supplement the condensed consolidate financial statements, which are prepared in accordance with GAAP, we use EBITDA as a non-GAAP financial measure.
The following table provides reconciliation of net income (loss) to EBITDA:
Three Months Ended June 30, (unaudited)
Six Months Ended June 30, (unaudited)
2022
2021
2022
2021
Net Income (loss)
$
762,409
$
(1,133,132
)
$
2,181,842
$
(2,440,038
)
Provision for Income Taxes
$
750,000
$
—
$
750,000
$
—
Interest and Financing cost
$
595,742
$
542,764
$
1,159,879
$
660,007
Depreciation Expense
$
—
$
—
$
2,556
$
—
EBITDA
$
2,108,151
$
(590,368
)
$
4,094,277
$
(1,780,031
)
EBITDA is defined as net income or loss before the impact of interest, taxes and depreciation and amortization. EBITDA is a key measure of our financial performance and measures our efficiency and operating cash flow before financing costs, taxes and working capital needs. We utilize EBITDA because it provides us with an operating metric closely tied to the operations of the business.
The Federal Reserve’s determination to crush inflation at home by raising interest rates is inflicting profound pain in other countries — pushing up prices, ballooning the size of debt payments and increasing the risk of a deep recession.
Those interest rate increases are pumping up the value of the dollar — the go-to currency for much of the world’s trade and transactions — and causing economic turmoil in both rich and poor nations. In Britain and across much of the European continent, the dollar’s acceleration is helping feed stinging inflation.
On Monday, the British pound touched a record low against the dollar as investors balked at a government tax cut and spending plan. And China, which tightly controls its currency, fixed the renminbi at its lowest level in two years while taking steps to manage its decline.
Somalia, where the risk of starvation already lurks, the strong dollar is pushing up the price of imported food, fuel and medicine. The strong dollar is nudging debt-ridden Argentina, Egypt and Kenya closer to default and threatening to discourage foreign investment in emerging markets like India and South Korea.
the International Monetary Fund.
Japanese yen has reached a decades-long high. The euro, used by 19 nations across Europe, reached 1-to-1 parity with the dollar in June for the first time since 2002. The dollar is clobbering other currencies as well, including the Brazilian real, the South Korean won and the Tunisian dinar.
the economic outlook in the United States, however cloudy, is still better than in most other regions.
loss of purchasing power over time, meaning your dollar will not go as far tomorrow as it did today. It is typically expressed as the annual change in prices for everyday goods and services such as food, furniture, apparel, transportation and toys.
What causes inflation? It can be the result of rising consumer demand. But inflation can also rise and fall based on developments that have little to do with economic conditions, such as limited oil production and supply chain problems.
Is inflation bad? It depends on the circumstances. Fast price increases spell trouble, but moderate price gains can lead to higher wages and job growth.
Can inflation affect the stock market? Rapid inflation typically spells trouble for stocks. Financial assets in general have historically fared badly during inflation booms, while tangible assets like houses have held their value better.
A fragile currency can sometimes work as “a buffering mechanism,” causing nations to import less and export more, Mr. Prasad said. But today, many “are not seeing the benefits of stronger growth.”
Still, they must pay more for essential imports like oil, wheat or pharmaceuticals as well as for loan bills due from billion-dollar debts.
debt crisis in Latin America in the 1980s.
The situation is particularly fraught because so many countries ran up above-average debts to deal with the fallout from the pandemic. And now they are facing renewed pressure to offer public support as food and energy prices soar.
Indonesia this month, thousands of protesters, angry over a 30 percent price increase on subsidized fuel, clashed with the police. In Tunisia, a shortage of subsidized food items like sugar, coffee, flour and eggs has shuttered cafes and emptied market shelves.
New research on the impact of a strong dollar on emerging nations found that it drags down economic progress across the board.
“You can see these very pronounced negative effects of a stronger dollar,” said Maurice Obstfeld, an economics professor at the University of California, Berkeley, and an author of the study.
central banks feel pressure to raise interest rates to bolster their currencies and prevent import prices from skyrocketing. Last week, Argentina, the Philippines, Brazil, Indonesia, South Africa, the United Arab Emirates, Sweden, Switzerland, Saudi Arabia, Britain and Norway raised interest rates.
World Bank warned this month that simultaneous interest rate increases are pushing the world toward a recession and developing nations toward a string of financial crises that would inflict “lasting harm.”
Clearly, the Fed’s mandate is to look after the American economy, but some economists and foreign policymakers argue it should pay more attention to the fallout its decisions have on the rest of the world.
In 1998, Alan Greenspan, a five-term Fed chair, argued that “it is just not credible that the United States can remain an oasis of prosperity unaffected by a world that is experiencing greatly increased stress.”
The United States is now facing a slowing economy, but the essential dilemma is the same.
“Central banks have purely domestic mandates,” said Mr. Obstfeld, the U.C. Berkeley economist, but financial and trade globalization have made economies more interdependent than they have ever been and so closer cooperation is needed. “I don’t think central banks can have the luxury of not thinking about what’s happening abroad.”
Flávia Milhorance contributed reporting from Rio de Janeiro.
Consumer spending accounts for nearly 70% of U.S. economic activity.
Americans picked up their spending a bit in August from July even as surging inflation on household necessities like rent and food took a toll on family budgets.
U.S. retail sales rose an unexpected 0.3% last month after falling 0.4% in July, the Commerce Department said Thursday. Excluding business at gas stations, sales rose 0.8%.
Sales at grocery stores rose 0.5% , helped by rising prices in food.
There was, however, weakening in some areas of discretionary spending with Americans fully aware of inflation’s bite. Business at restaurants ticked up 1.1%, but the pace has slowed. Sales at furniture stores fell 1.3%. Online sales fell 0.7% last month after Amazon’s Prime Day boosted e-commerce sales in July.
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“Retailers would probably like to be growing more, especially relative to inflation, but I’m not sure they could realistically hope for much more,” said Ted Rossman, senior industry analyst at Bankrate.com. “Consumer spending habits are changing as the pandemic continues to recede and inflation remains high.”
Consumer spending accounts for nearly 70% of U.S. economic activity and Americans have remained mostly resilient even with inflation near four-decade highs. Yet surging prices for everything from mortgages to milk have upped the anxiety level. Overall spending has slowed and shifted increasingly toward necessities like food, while spending on electronics, furniture, new clothes and other non-necessities has faded.
On Thursday, it appeared that the U.S. dodged a national freight rail strike, which could have sent retail prices higher.
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Still, inflation remains stubbornly high. Lower gas costs slowed U.S. inflation for a second straight month in August, but most other prices across the economy kept going up — evidence that inflation remains a heavy load for American households.
Consumer prices rose 8.3% from a year earlier and 0.1% from July. But the jump in “core” prices, which exclude volatile food and energy costs, was especially worrisome. It outpaced expectations and sparked fear that the Federal Reserve will increase interest rates more aggressively and raise the risk of a recession.
The government’s monthly report on retail sales covers about a third of all consumer purchases and doesn’t include spending on most services, ranging from plane fares and apartment rents to movie tickets and doctor visits. In recent months, Americans have been shifting their purchases away from physical goods and more toward travel, hotel stays and plane trips as the threat of the virus fades.
Early in the pandemic, Alondra Barajas had a temporary job for the Census Bureau, doing phone work from the two-bedroom apartment she shared with her mother and four younger siblings. When that job ended in late 2020, she struggled to find employment.
But Ms. Barajas learned from an ad on Instagram that she might qualify for an unusual form of assistance: monthly payments of $1,000 for a year.
Since she started receiving the funds this year — while caring for her newborn, searching for a job and looking for a new place to stay — her outlook has seemed brighter.
Oakland pledged to give 600 low-income families $500 for 18 months, and in San Diego, some families with young children will get $500 a month for two years.
Last year, the state set aside $35 million over five years for cities to carry out pilot programs, which can use different criteria, including income level, people leaving the foster care system and residence in low-income neighborhoods. An application process for municipalities to tap into those funds is underway.
one of the country’s first guaranteed income programs in 2019, notes that these payments are not meant to be a sole means of income but aim to provide a buffer for people to break the cycle of poverty.
Inflation F.A.Q.
Card 1 of 5
What is inflation? Inflation is a loss of purchasing power over time, meaning your dollar will not go as far tomorrow as it did today. It is typically expressed as the annual change in prices for everyday goods and services such as food, furniture, apparel, transportation and toys.
What causes inflation? It can be the result of rising consumer demand. But inflation can also rise and fall based on developments that have little to do with economic conditions, such as limited oil production and supply chain problems.
Is inflation bad? It depends on the circumstances. Fast price increases spell trouble, but moderate price gains can lead to higher wages and job growth.
Can inflation affect the stock market? Rapid inflation typically spells trouble for stocks. Financial assets in general have historically fared badly during inflation booms, while tangible assets like houses have held their value better.
Mr. Tubbs sees the programs as crucial tools in achieving racial justice for Black people and Latinos.
“The ways in which racism and capitalism have intersected to steal wealth from some communities,” he said, “creates the disparities we see today.”
Damon Jones, an economics professor at the University of Chicago, who has studied such programs, noted that unrestricted cash — including stimulus payments — was used broadly by the federal government to stem the economic devastation of Covid-19.
“Policymakers were surprisingly open to this idea following the onset of the pandemic,” Mr. Jones said. Now the emergency aid programs have largely lapsed, ending what for some was a lifeline.
Opponents argue that guaranteed income programs are too expensive and are counterproductive.
Oren Cass, executive director of American Compass, a conservative-leaning think tank, said the case against guaranteed income was not that people “receiving random windfalls can’t benefit from them — in at least some cases, they can and do.”
Los Angeles pilot program, said the goal of her city’s effort was to promote changes to the ways federal public benefit programs were designed.
“Many, if not all, public benefit program regulations contradict each other, are difficult to navigate and are not focused on creating pathways to greater economic opportunity,” Ms. Marquez said. (Some states, including California, have built-in exemptions to ensure that accepting funding from the pilot programs does not put recipients at risk of losing certain state and federal assistance.)
The Los Angeles program received $38 million from the city. A small portion of the money comes from private funds.
According to city data, one-third of adults in Los Angeles are unable to support their families on income from full-time work alone.
“When you provide resources to families that are struggling, it can give them the breathing room to realize goals that many of us are fortunate enough to take for granted,” Mayor Eric Garcetti said when the program began.
That breathing room came at an opportune time for Ms. Barajas. After graduating from high school in 2017, she pushed aside dreams of college and began working a string of retail gigs — Claire’s, Old Navy, Walmart. She set aside $300 from her paycheck each month to help cover her family’s rent.
The State of Jobs in the United States
Economists have been surprised by recent strength in the labor market, as the Federal Reserve tries to engineer a slowdown and tame inflation.
“I had to work,” she said. “We had no foundation, no money in our pockets.”
Last year, Ms. Barajas, 22, received funds from an extension of the child tax credit. She used some of the money for essentials like clothes and food.
On a recent afternoon in Chatsworth, a Los Angeles neighborhood, Ms. Barajas reflected on how the money from the guaranteed income program was helping her stay afloat. She moved out of her mother’s apartment in April, after an argument. Since then, she and her daughter, now 15 months old, have slept on friends’ couches and sometimes stayed at pay-by-the-week motels.
For now, they are living at a 90-day shelter for women and children. Ms. Barajas hopes to attend community college this fall, but is focused first on finding a job. Many mornings, she scrolls her iPhone looking at postings before her daughter wakes up.
Most of the money from the guaranteed-income payments goes toward food, diapers and clothing, but she’s trying to save several hundred dollars, enough for a security deposit for an apartment she hopes to move into with a friend.
“I’m one emergency away from having to spend money and then live on the streets and become homeless,” she said. “A lot of people are just hanging on with the smallest amount of wiggle room financially.”
Zohna Everett, who was part of the Stockton program, knows how it feels to live within that razor-thin margin.
Before the program began in 2019, she was driving for DoorDash five days a week, bringing in about $100 a day. Her husband at the time worked as a truck driver, and the rent for their two-bedroom apartment was $1,000. To help earn gas money, Ms. Everett sometimes collected recyclables and turned them in for cash.
“The money was a godsend,” Ms. Everett said of the Stockton program, adding that while enrolled in it, she got a contract job at the Tesla factory in Fremont, Calif., on a production line.
Until then, Ms. Everett, 51, had been in a perpetual state of hustle, never stopping long enough to realize her exhaustion. After the payments started, she noticed she was sleeping better than she had in years.
“A weight truly was lifted from me,” she said.
The payments stopped during the pandemic, but she then received stimulus money from the federal government. She had started to save some money, but after a case of Covid left her with persistent fatigue and breathing problems, she recently took a leave from her Tesla job.
“With this pandemic, there is a lot of struggling,” she said. “There needs to be a permanent solution to help people.”
Name, image and likeness deals have taken hold at college campuses across the country, turning some student-athletes into millionaires.
Glance around the parking lot of the Woody Hayes Athletic Center at The Ohio State University this fall and you might come across a $200,000 palace on wheels, the kind of luxury ride more likely to be found in the garages of movie stars, music moguls and titans of business than on a college campus.
That’s assuming Buckeyes quarterback C.J. Stroud hasn’t swapped out his silver Mercedes-Benz G-Wagon for a Bentley or a Porsche, which his name, image and likeness deal with Sarchione Auto Gallery allows him to do every 45 days.
“It’s definitely changed my life for the future,” Stroud said of the several NIL deals to flow his way over the past year, “and I think it’s a jump-start to being a businessman before you get to the NFL, if that’s your path.”
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More than a year ago, the NCAA lifted long-standing restrictions on players profiting from their celebrity status, and in some cases it turned elite players such as Stroud and Alabama quarterback Bryce Young into instant millionaires. But the financial benefits for some athletes are being weighed against the possibility that such deals will divide locker rooms, create tension within programs, produce an uneven playing field across college athletics and overwhelm students stretched for time.
“As far as NIL goes in the locker room, you see stuff, but no one ever talks about it,” Oklahoma wide receiver Marvin Mims admitted. “It’s never like, a competition, like, ‘Oh, I got this much more money than you did. I’ve got this deal. You couldn’t get this deal.’ But you do notice the NIL deals that other guys are getting.”
College football has witnessed the biggest impact from NIL legislation, though athletes in all sports have tapped into the sudden cash flow. Of the estimated $1.14 billion that will be poured into the pockets of athletes in Year 2, the NIL platform Opendorse predicts nearly half of it will be spent on the gridiron.
The largest and most prominent deals are going to individual athletes who have successfully leveraged their exceptional ability, potential, influence and exposure: Young’s portfolio is believed to have exceeded $1 million before he ever took a snap for the Crimson Tide, while Alabama teammate Will Anderson signed an NIL deal that allows one of the nation’s best linebackers to drive a $120,000 Porsche Cayenne GTS.
At Texas, running back Bijan Robinson has deals with Raising Cane’s restaurants, C4 Energy drinks and sports streaming platform DAZN, while also forging a partnership with an auto dealership for the use of a Lamborghini. At Notre Dame, tight end Michael Mayer has parlayed his first-round draft stock into deals with clothing brands Levi’s and Rhoback.
They are precisely the types of endorsement contracts, and cozy relationships with boosters and businesses, that once landed players on suspension and programs on probation.
“I feel bad for the older players that didn’t have the opportunity to get money from this, like Braxton Miller, Cardale Jones, Justin (Fields),” Stroud said of the Ohio State quarterbacks who came before him.
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“They should have made a killing,” added Stroud, who also works with Value City Furniture, Designer Shoe Warehouse and the trading card company Onyx Authenticated. “It’s just good that players have control now when it comes to money.”
Along with deals signed by individual athletes, collectives have become a major player in the NIL landscape. Some are organized by schools and others by boosters acting on their own, but both distribute money gathered from businesses and donors for everything from endorsements to meet-and-greets and charitable work.
The Foundation, a third-party collective at Ohio State, says it has raised more than $500,000 for Stroud, running back TreVeyon Henderson, wide receiver Jaxon Smith-Njigba and cornerback Denzel Burke. Texas Tech boosters have formed The Matador Club collective, which says it is signing all 85 scholarship players and 20 walk-ons to $25,000 contracts this season in return for appearing at club events and doing a certain amount of community service.
“I think we are well into the seven figures with all of our collectives,” said Morgan Frazier, a former gymnast at Florida and now the general counsel for Student Athlete NIL, which operates collectives at Penn State and several other schools.
Asked where the majority of money is going, she replied: “Overall, definitely football.”
It’s almost impossible to determine how much players are earning from NIL deals, in part because reporting rules differ from state to state. The vast majority are relatively modest — perhaps $50 for a tweet or $100 for an autograph signing on platforms such as Cameo, vidsig and Engage. Rarely do deals exceed $1,000.
But for premier position players at marquee programs, with NFL potential and huge social media followings, the money on the table can be life-changing. Twelve college players have a valuation of at least $1 million entering this season, according to On3, a platform that uses an algorithm to factor such things as social media reach to project NIL worth.
More than 50 players have a valuation of at least $500,000, with most of those playing in the SEC and Big Ten.
“Having an opportunity to change other peoples’ lives, that’s what’s cool about NIL,” said Penn State quarterback Sean Clifford, who founded Limitless NIL, which is believed to be the first agency created by an athlete to help other athletes. Its clients include Nittany Lions receiver Ji’Ayir Brown.
The spoils can come at a price. For one thing, players who may have already struggled to juggle classes and study halls with practice and film sessions now must balance meet-and-greets, autograph sessions and other work.
Then there’s the often-combustible locker room atmosphere, where lines have always existed between haves and have nots. In the past, those might have been between walk-ons and scholarship players. Now, they could be between players driving exotic cars or wearing expensive jewelry and those trying to scrape together rent.
“I know it could be a distraction,” Robinson said, when asked what it’s like driving his Lamborghini to practice. “If a teammate would bring it up, I would just joke around, be like, ‘Oh, man, but it’s not like what you’re getting out there right now.’ Just to not make it about yourself, because it’s not about you.
“If you’re not winning,” Robinson said, “none of us can get these NIL deals.”
Excessive rainfall has worsened problems in a water treatment plant in the capital city.
Mississippi Gov. Tate Reeves said Monday night that he is declaring a state of emergency after excessive rainfall exacerbated problems in one of Jackson’s water-treatment plants and caused low water pressure through much of the capital city.
The low pressure raised concerns about firefighting and about people’s ability to take showers or flush toilets.
Reeves said that on Tuesday, the Mississippi Emergency Management Agency will start distributing both drinking water and non-potable water in the city of 150,000 residents, and the National Guard will be called in to help. The governor said he understands people in Jackson don’t want to have water system problems.
“I get it. I live in the city. It’s not news that I want to hear,” Reeves said. “But we are going to be there for you.”
A swollen Pearl River flooded streets and at least one home in Jackson on Monday, days after storms dumped heavy rain, but water levels were starting to recede. Jackson Mayor Chokwe Antar Lumumba said the water did not rise as high as expected. Earlier projections showed about 100 to 150 buildings in the Jackson area faced the possibility of flooding.
“We thank the Lord most of all for sparing so many of our residents,” Lumumba said Monday, hours before the governor spoke about the water system.
The National Weather Service said the Pearl River had crested at about 35.4 feet. That is short of the major flood stage level of 36 feet.
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Jackson has two water-treatment plants, and the larger one is near a reservoir that provides most of the city’s water supply. The reservoir also has a role in flood control.
Lumumba — a Democrat who was not invited to the Republican governor’s news conference — said flooding has created additional problems at the treatment plant, and low water pressure could last a few days.
“What I liken it to is if you were drinking out of a Styrofoam cup, someone puts a hole in the bottom of it, you’re steady trying to fill it while it’s steady running out at the bottom,” Lumumba said.
Jackson has longstanding problems with its water system. A cold snap in 2021 left a significant number of people without running water after pipes froze. Similar problems happened again early this year, on a smaller scale. The city has been under a boil-water notice since late July because tests found a cloudy quality to the water that could lead to health problems.
Legislative leaders reacted with alarm to Jackson’s latest water system problems.
“We have grave concerns for citizens’ health and safety,” Republican Lt. Gov. Delbert Hosemann said in a statement Monday, suggesting the state take a role in trying to solve the issue.
The Republican House speaker, Philip Gunn, said he has been contacted by hospitals, businesses and schools “pleading that something be done to address the water crisis in Jackson.”
As the Pearl River started to rise last week, some Jackson residents started moving furniture and appliances out of their homes, and others stocked up on sandbags. Two years ago, torrential rain caused the river to reach 36.7 feet and Jackson homes in the hardest-hit neighborhoods were filled with dirty, snake-infested floodwaters.
Suzannah Thames owns a three-bedroom rental home in northeast Jackson that flooded with about 3 feet of water in 2020. Thames hired a crew to move appliances, furniture and other belongings out of the home Friday. She said Monday that the home flooded with about 3 to 4 inches inches of water late Sunday.
“I thought it was going to be a lot worse,” Thames said. “I feel very fortunate. I feel very blessed.”
Andre Warner, 54, said Monday that his family had put all their furniture up on cinderblocks inside their home to prepare for possible flooding in another northeast Jackson neighborhood.
Warner said the family had to leave home for two weeks during the 2020 flood. Water did not enter their house then, but electricity was off in their neighborhood because other homes were inundated.
“We had to wait for it to drain and dry out for them to cut the grid back on,” Warner said.
The Mississippi flooding was less severe than flooding that caused death and destruction in Kentucky last month. Those floods left at least 39 dead and robbed thousands of families of all of their possessions. Nearly a month later, residents are wrestling with whether to rebuild at the place they call home or to start over somewhere else.
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U.S. Inflation Falls For 2nd Straight Month But Remains High At 8.3%
Tim Tebow-Led Company Hopes To Help College Athletes Through NFTs
How College Athletes’ Name, Image And Likeness Changed The Game
Storms Expected To Continue Flooding Southern States For Days