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America’s Economy Begins to Shut Down as Pandemic Measures Take over

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In some places, public officials and private business owners moved with stunning speed. In others, paralyzing hesitancy, defiant bravado or blithe disregard dominated. But by Monday, it was clear everywhere that most of the American economy was grinding to an unparalleled halt and would remain that way for months.

California took some of the most aggressive steps to curb the spread of the coronavirus, with San Francisco and its surrounding counties telling residents to “shelter in place” and not leave their homes unless necessary. Primary elections in Georgia, Kentucky and Louisiana were postponed.

On the East Coast, Gov. Phil Murphy of New Jersey recommended a blanket curfew from 8 p.m. to 5 a.m. for his state’s nine million residents. In New York, owners, waiters, chefs and bartenders arrived for work Monday as if for a funeral, ordered to close by Tuesday morning.

On Wall Street, brokers and analysts were acting as if an economic collapse were inevitable, despite the Federal Reserve’s emergency moves on Sunday night to stoke economic growth through an aggressive bond-buying program. The S&P 500 fell nearly 12 percent on Monday and global oil prices slid below $30 a barrel, the lowest level in more than four years.

With the stock market tumbling and anxiety coursing through many communities, President Trump on Monday afternoon announced federal guidelines that he said were meant to “blunt the infection now.” He warned against gatherings of more than 10 people, saying people should work from home when possible and avoid restaurants and bars.

Those actions are voluntary, though, and Mr. Trump said he was not considering a national quarantine right now but may consider one in “certain hotspots.”

Also unanswered by the White House was the question of precisely what individuals and local governments should do, as well as how business owners and workers might survive financially, at a time when vast sections of the economy were ceasing to function.

Wall Street offered a grim verdict. “We’re calling the recession,” said Gregory Daco, chief U.S. economist at Oxford Economics. “We have the three elements to make that call — a profound, pervasive and persistent contraction in economic activity.”

Governments around the globe scrambled to deal with the spread of the coronavirus, which has sickened at least 176,500 people worldwide and contributed to more than 7,350 deaths. Canada shut its borders to anyone who is not a citizen or permanent resident, while the European Union ordered a halt to all nonessential travel. In France, President Emmanuel Macron banned all social and family gatherings, placing the country in an unprecedented lockdown.

Even before the White House guidelines were released on Monday afternoon, school districts, towns, localities, cities and states were urgently pushing ahead with a chaotic hodgepodge of mandated restrictions and suggestions about how to keep the virus from spreading. Business groups, local and state leaders and a growing chorus of lawmakers and economists begged the federal government to spend trillions of dollars to pay workers to stay home and funnel money to companies struggling with an abrupt end to consumer activity.

The administration floated several ideas for helping industry without conveying a clear plan to provide financial assistance. While the main trade group for airlines suggested a $50 billion bailout might be needed for carriers, Mr. Trump’s chief economist, Larry Kudlow, said he did not expect the airlines to need a rescue but said the government would do what it could to help with cash flow issues.

“We don’t see the airlines failing, but if they get into a cash crunch we’re going to try to help them,” Mr. Kudlow told reporters on Monday.

Without concrete assurances of financial assistance from the federal government, employers and employees are torn between fears of being exposed to the virus and fears of running out of money to pay for food and electricity. And government officials are left with the unhappy task of shutting down businesses that provide wages for large swaths of their communities, while wondering what steps their neighbors are taking.

“You can’t have one state taking actions that are different from other states,” Gov. Andrew M. Cuomo of New York said on Monday morning, echoing the frustration of officials and business owners across the country who want a federal directive on how to respond. What good is it if New Jersey closes its bars, if people just drive across to New York or Connecticut to drink and then return home. “This is a national pandemic and there are no national rules,” he said.

In California, Gov. Gavin Newsom told all residents older than 65 to stay in their homes, banned nearly all visits to hospitals and nursing homes and announced plans to buy hotels to house some of the state’s 150,000 homeless people. He also closed bars, wineries and nightclubs.

Schools are closed in West Virginia but bars in Charleston, the capital, are still open. In Sun Prairie, Wis., Sunday services were held as usual at one church, even though three members of another church two miles away tested positive for the coronavirus last week.

“In case you’re wondering, we’re still on this morning,” Focus Church posted on its Facebook page.

In Chicago, some movie theaters are open, though they have instituted “social distancing plans” that block off seats in every other row. Regal Cinemas, by contrast, announced it was closing all its outlets after the White House guidance.

Although many restaurants, airlines and entertainment venues were shut down and many office workers stayed home on Monday, millions of Americans were still at work. Lowe’s, the home improvement chain, said all of its more than 1,700 stores were open for business. The company employs more than 270,000 people around the country. Home Depot, which employs about 400,000 people in its roughly 2,200 stores in the United States, was also open for business on Monday.

Boeing, the embattled aerospace giant, was continuing to assemble airplanes at its major factories in Everett, Wash., and North Charleston, S.C. UPS, which employs some 413,000 people in the United States, was still sending trucks out to deliver packages and processing orders. Merck, the pharmaceutical company, was continuing to produce and distribute drugs from facilities spread out across nine states.

The federal Centers for Disease Control recommended limiting gatherings to 50 or fewer attendees, but as Dr. Rex Archer, the director of the Kansas City Health Department, noted: “I’d rather have a meeting of 60 in a room that holds 500 than a meeting of 49 in a room that holds 50.”

Public health officials are united in arguing that eliminating as much person-to-person interaction as possible is necessary to control how quickly the coronavirus spreads so that the health care system can manage the caseload — what’s being called “flattening the curve.”

Then the central question becomes what should be done to counter the resulting widespread and potentially devastating economic hardships.

In Washington, lawmakers are working on a new fiscal stimulus package that could help workers and companies weather the storm. The House approved changes on Monday to its sweeping economic relief legislation, and its bill will head to the Senate, where it is unclear how quickly the legislation will pass.

Other businesses in addition to airlines are pushing for loans or direct government grants to fill the void of lost sales. Momentum is growing among Senate Republicans for more direct aid to workers who have been laid off or had their hours reduced. On Monday, Senator Mitt Romney of Utah called for the government to cut a $1,000 check, immediately, to every American.

Roughly four out of 10 Americans don’t have enough cash on hand to cover a $400 emergency expense like an unexpected car repair or medical bill without borrowing money, the Federal Reserve reported last year. And that was when the economy was running unimpeded with record-low jobless rates.

“People don’t have reserves, they live hand-to-mouth” said Joseph Stiglitz, a Nobel-winning economist. “People won’t be able to pay their rents, landlords won’t be able to pay their oil bills, the whole system could break down.”

Steve Coffle, owner of Helix Rotation Services in Atlanta, which cleans Airbnbs and other private rentals, said he told his contract employees he would try to help them out as the $80-a-gig jobs evaporated. “I’ve got enough floater cash to keep them going for another week or two, but that’s about all I can handle if I can’t get some revenue in,” he said.

Many businesses decided to close, including MGM Resorts International’s casinos on the Las Vegas Strip, Jose Andres restaurants in Washington and beyond, and iconic independent bookstores like Powell’s in Portland, Ore., and the Strand Book Store in New York. The Strand guaranteed to pay all employees scheduled to work through March 22.

Starbucks said on Sunday afternoon that it would temporarily close stores in high-traffic areas like shopping malls and eliminate seating in others; Blue Bottle Coffee said it would close all locations in the United States. On Monday, McDonald’s said company-owned restaurants would close seating areas, including the use of self-service beverage bars and kiosks.

But there were holdouts over the weekend: In Washington, the Hill Restaurant Group, which owns Hawk ‘n’ Dove, Lola’s and others, said it would defy a mayoral directive to shut down, as did Steve Smith, the owner of several popular nightspots like Tootsie’s Orchid Lounge and Kid Rock’s Big Ass Honky Tonk Steakhouse in Nashville, Tenn.

“We will not bow down to pressure from the mayor’s office or any group for that matter who covertly is attempting to shut us down,” the restaurant group said in a statement. “It is not our burden to bear nor is it our staffs burden to bear.”

After a backlash, both owners switched course and agreed on Monday to close.

The consequences of China’s harsh measures to halt the virus — restricting the movement of about 700 million people at one point — became apparent on Monday when the government released economic data showing industrial output falling to its lowest level in decades and unemployment rising at its highest rate ever in February.

In the United States, business owners say they need government assistance to survive. Molly Moon Neitzel, the owner of Molly Moon’s, an ice cream shop with eight locations across the Seattle area, had her sales plummet in recent weeks. Ms. Neitzel — who employs about 120 people in the winter and about 220 in the summer — asked her finance department to set up new metrics to track “Coronavirus period to date.”

“It is apocalyptic,” she said. “I sat down at my computer and wrote a memo to the mayor, the City Council, the city office of economic development, and folks in the governor’s office basically saying ‘This is really scary and it has come quickly and is putting small business owners out of business.’”

On Monday, Ms. Neitzel sent a companywide email to her employees saying Molly Moon’s was reducing hours and limiting service to takeout and delivery only. The company’s management will take a 20 percent pay cut, she wrote, and staff the stores. Hourly employees — about 90 people — will be laid off until business returns. “We hope to hire them back, along with more seasonal employees,” she said in an interview. “Because we hope it’s summer soon.”

Reporting was contributed by John Eligon, Stacy Cowley, Conor Dougherty, Michael Wines, David Gelles, Julie Bosman and Emily Cochrane.

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Coronavirus: Premier François Legault offers glimmer of hope for Quebec’s economy – Global News

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Quebec Premier François Legault expressed optimism about the possibility of getting Quebec’s economy back on track, after taking a hit due to the COVID-19 pandemic.

Non-essential businesses have been shuttered for weeks in an effort to contain the spread the virus, which has had an impact on the economy.

Legault said he was encouraged by COVID-19 projections — made public on Tuesday — and believes Quebec is leaning towards a best-case scenario because of its social-distancing measures.






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Coronavirus outbreak: Quebec projections show COVID-19 peak likely in mid-April


Coronavirus outbreak: Quebec projections show COVID-19 peak likely in mid-April

Public health officials project the number of cases will peak around April 18 and Legault said he was hopeful businesses could start opening next month.

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“But we have to restart the economy without restarting the pandemic,” he warned.


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Quebec’s public health director Dr. Horacio Arruda said social-distancing measures will continue be as important as ever. He also stated that most gatherings will still be forbidden in order to avoid a resurgence of the virus.

Legault said re-imagining the workplace should be top of mind.

“I think it’s important that managers, owners of different businesses, that they start thinking about a new way to work in the next weeks or months,” he said.


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On Monday, the government announced a $100-million employee training program to help businesses adjust to a new reality. The idea is to ensure employees are trained to use new technologies and can learn new workflows.

Other measures put forward by the government to boost the economy include the Panier Bleu, an online platform to encourage Quebecers to buy locally, as well as various subsidies for businesses and individual workers alike.

Legault said government officials are also working with various company representatives to see how businesses will be able to re-open, provided the “figures stay good in the next few days.”

It’s a reminder that everyone has a crucial role to play in the pandemic.

“I know it’s tough, tough to continue all our efforts, but as we say in English: April showers bring May flowers,” he said.

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— With files from Global’s Raquel Fletcher 

© 2020 Global News, a division of Corus Entertainment Inc.

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Expert weighs in on Kenney’s economic plan for Alberta, suggests PST could be an answer – Global News

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While Jason Kenney’s televised address to the province on Tuesday night gave details on how the COVID-19 pandemic in the province could play out in terms of cases and deaths, some political scientists say the comments the premier made in regards to the economic future of Alberta didn’t provide a lot of specifics.

One political scientist in the province said there is one option for the government to increase revenue: implementing a provincial sales tax (PST).

“[We’re] in a situation where the oil and gas sector has completely collapsed in terms of prices, and the revenue picture is going to be looking very unstable going forward,” said Chaldeans Mensah, an associate professor of political science at MacEwan University.





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Alberta premier warns devastating economic impact of COVID-19 could mean record unemployment, negative oil prices


Alberta premier warns devastating economic impact of COVID-19 could mean record unemployment, negative oil prices

Mensah said the pandemic has completely changed the circumstances of the province, and that while the UCP had campaigned on a platform of fiscal conservatism, there needs to be a way of balancing the books going forward.

“The only way available is to look at a modest PST, to provide options for the government to be able to fund programs.”

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Kenney said in his Tuesday night address that the social distancing and closure orders in the province would be in place at least until the end of May. He also said that the province would eventually roll out a “relaunch strategy” to get the economy moving again, involving mass testing to get those with immunity back to work, and increasing border screening.






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Explaining Alberta’s probable, elevated and extreme COVID-19 modelling numbers


Explaining Alberta’s probable, elevated and extreme COVID-19 modelling numbers

However, once the premier addressed the situation with the global oil markets, experts said there was a lack of clarity on how the province could move past this.

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“There didn’t seem to be a whole lot of answers, and just some real dangerous situations,” Mount Royal University political science professor Duane Bratt said.


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“[Kenney] talked about a budget deficit that will triple to about $20 billion dollars, [he] talked about negative prices for energy — where we may have to pay people to take it — and there was no sense of how we’re going to get out of that,” said Bratt.

In his address Tuesday, Kenney said he could not “overstate how grave the implications of this will be for jobs, the economy and the financial security of Albertans.

“Much of this is due to the COVID-19 recession, but it has been made worse by a predatory price war led by Saudi Arabia and Russia, who are trying permanently to damage North America’s energy industry.”


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Bratt said that while Kenney did reference the Keystone XL pipeline project as an important energy investment made by the government, as well as the work being put into collaborating with its federal counterpart and the U.S in regards to the energy sector, when it came to the province’s economic future, “he didn’t go into the same degree of details, the same strength of numbers as was on the health side.”


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While the PST has been a difficult policy option for governments in the past, the COVID-19 situation has put the government into a spot that would be tricky to get out of without it, Mensah said.

“It’s the time to really put aside the ideology of fiscal conservatism,” Mensah said. “I think there’s room for a modest PST, to generate revenue in these uncertain times. You could even put a sunset on the PST— you could have it for five years or so, for the revenue to start to improve.

“I think Albertans, given the [pandemic] situation, would welcome the [PST] situation politically. The times we are in call for drastic measures.

“The government really has to re-calibrate here and come up with an alternate approach to the province’s finances,” he said.

Kenney has shut down PST idea

However, on March 9, just over a week before Alberta declared a health emergency due to COVID-19, Kenney shut down the idea.

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“I cannot imagine a dumber thing to do in the midst of a time of economic fragility, an oil price collapse and a global recession, than to add a multi-billion-dollar tax on the Alberta economy and on Alberta families,” he said.


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Jason Kenney says government will not implement a PST


Jason Kenney says government will not implement a PST

“You’re talking about a PST that would generate several billion dollars of revenue. That would take several thousand dollars out of the pockets of Alberta families at the worst possible time.

“This government is not going to take thousands of dollars out of people’s household budgets at a time of real economic challenge,” Kenney said.

On Wednesday, a spokesperson for the premier said in a statement that Kenney’s previous comments on the idea of a provincial sales tax still stand.

Cases of COVID-19 have spiked and mass layoffs have been handed out in Alberta since March 9, when there were just seven confirmed cases in the province. Just under a month later, on April 8, there were 1,423.

© 2020 Global News, a division of Corus Entertainment Inc.

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CNN Poll: Views of economy plummet as financial hardship from coronavirus hits half of Americans – CNN

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The shift is the steepest worsening of public perceptions of the economy in polling dating back to 1997.
The findings follow a near-total shutdown of the American economy in the wake of the coronavirus outbreak. Last week, a worse-than-expected unemployment report and two weeks of astronomically high counts of people filing for unemployment benefits highlighted the speed with which the impact of that shutdown has spread. The poll finds about half of Americans report financial hardship due to the outbreak.
Despite all of that, the changed view of the current economic picture has not dampened the public’s optimism about where the economy will be a year from now. About two-thirds, 67%, say they expect it to be in good shape in one year, about the same as felt that way in December.
As views on the economy have slid, President Donald Trump’s approval rating for handling the economy has also ticked down. In March, 54% said they approved of Trump’s handling of the economy; that slips to 48% in the new poll. It’s the first time that figure has fallen below 50% since September.
The 60% overall who say the economy is in poor shape is the worst since 2014, and the size of the change in the last month nearly doubles the previous largest change between CNN polls regardless of the length of time between when they were conducted — a 16-point increase in the share calling the economy “poor” between January and March of 2008.
The worsening views of the economy come across party lines — the percentage describing the economy as “good” is down 33 points among Republicans, 28 points among independents and 27 points among Democrats — and most demographic divides. It is sharper among those with college degrees (down 44 points among college grads vs. a 23-point drop among those without degrees) and higher incomes (down 40 points among those with incomes of $50,000 or more annually vs. 18 points among those with lower incomes).
Overall, 67% say they see the economic problems caused by the virus as a temporary obstacle to economic growth rather than a permanent change in the American economy. That sentiment is much stronger among Republicans, 91% of whom say it is a temporary change. Among Democrats, 52% feel that way while 46% say it is a permanent change to the economy.
About half say that the outbreak has caused their household financial hardship, with one in six saying that hardship has been severe. Nearly 3 in 10 who have incomes under $50,000 per year and roughly a quarter of younger Americans and people of color say they are facing severe financial hardship due to the outbreak.
Overall, most feel that the action taken by the government thus far has not done enough to help those who have lost jobs or wages during the outbreak (55%) or to help small businesses (53%). And 44% say it hasn’t gone far enough to help people like them.
There is a wide partisan divide on whether the bills passed by Congress in response to the virus have done enough to help small businesses or those who have lost jobs or wages. About three-quarters of Democrats say the bills have done too little for each of those groups, while only about a quarter of Republicans feel the same way. Most independents say they have not gone far enough.
The CNN Poll was conducted by SSRS April 3 through 6 among a random national sample of 1,002 adults reached on landlines or cellphones by a live interviewer. Results for the full sample have a margin of sampling error of plus or minus 3.7 percentage points.

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