This summer, when bars and restaurants and stores began to reopen across the United States, people headed out despite the continuing threat of COVID-19.
As a result, many areas, including the St. Louis region, saw increases in cases in July.
Using mathematical modeling, new interdisciplinary research from the lab of Arye Nehorai, the Eugene & Martha Lohman Professor of Electrical Engineering in the Preston M. Green Department of Electrical & Systems Engineering at Washington University in St. Louis, determines the best course of action when it comes to walking the line between economic stability and the best possible health outcomes.
The group — which also includes David Schwartzman, a business economics PhD candidate at Olin Business School, and Uri Goldsztejn, a PhD candidate in biomedical engineering at the McKelvey School of Engineering — published their findings Dec. 22 in PLOS ONE.
The model indicates that of the scenarios they consider, communities could maximize economic productivity and minimize disease transmission if, until a vaccine were readily available, seniors mostly remained at home while younger people gradually returned to the workforce.
“We have developed a predictive model for COVID-19 that considers, for the first time, its intercoupled effect on both economic and health outcomes for different quarantine policies,” Nehorai said. “You can have an optimal quarantine policy that minimizes the effect both on health and on the economy.”
The work was an expanded version of a Susceptible, Exposed, Infectious, Recovered (SEIR) model, a commonly used mathematical tool for predicting the spread of infections. This dynamic model allows for people to be moved between groups known as compartments, and for each compartment to influence the other in turn.
At their most basic, these models divide the population into four compartments: Those who are susceptible, exposed, infectious and recovered. In an innovation to this traditional model, Nehorai’s team included infected but asymptomatic people as well, taking into account the most up-to-date understanding of how transmission may work differently between them as well as how their behaviors might differ from people with symptoms. This turned out to be highly influential in the model’s outcomes.
People were then divided into different “sub-compartments,” for example age (seniors are those older than 60), or by productivity. This was a measure of a person’s ability to work from home in the case of quarantine measures. To do this, they looked at college degrees as a proxy for who could continue to work during a period of quarantine.
Then they got to work, developing equations which modeled the ways in which people moved from one compartment to another. Movement was affected by policy as well as the decisions an individual made.
Interestingly, the model included a dynamic mortality rate — one that shrunk over time. “We had a mortality rate that accounted for improvements in medical knowledge over time,” said Uri Goldsztejn, a PhD candidate in biomedical engineering. “And we see that now; mortality rates have gone down.”
“For example,” Goldsztejn said, “if the economy is decreasing, there is more incentive to leave quarantine,” which might show up in the model as people moving from the isolated compartment to the susceptible compartment. On the other hand, moving from infectious to recovered was based less on a person’s actions and can be better determined by recovery or mortality rates. Additionally, the researchers modeled the mortality rate as decreasing over time, due to medical knowledge about how to treat COVID-19 becoming better over time.
The team looked at three scenarios, according to Schwartzman. In all three scenarios, the given timeline was 76 weeks — at which time it assumed a vaccine would be available — and seniors remained mostly quarantined until then.
- If strict isolation measures were maintained throughout.
- If, after the curve was flattened, there was a rapid relaxation of isolation measures by younger people to normal movement.
- If, after the curve was flattened, isolation measures were slowly lifted for younger people.
“The third scenario is the case which was the best in terms of economic damage and health outcomes,” he said. “Because in the rapid relaxation scenario, there was another disease spread and restrictions would be reinstated.”
Specifically, they found in the first scenario, there are 235,724 deaths and the economy shrinks by 34%.
In the second scenario, where there was a rapid relaxation of isolation measures, a second outbreak occurs for a total of 525,558 deaths, and the economy shrinks by 32.2%.
With a gradual relaxation, as in the third scenario, there are 262,917 deaths, and the economy shrinks by 29.8%.
“We wanted to show there is a tradeoff,” Nehorai said. “And we wanted to find, mathematically, where is the sweet spot?” As with so many things, the “sweet spot” was not at either extreme — total lockdown or carrying on as if there was no virus.
Another key finding was one no one should be surprised to hear: “People’s’ sensitivity to contagiousness is related to the precautions they take,” Nehorai said. “It’s still critical to use precautions — masks, social distancing, avoiding crowds and washing hands.”
Renewed lockdown sends UK economy tumbling again: PMI – Cape Breton Post
By Andy Bruce
LONDON (Reuters) – Britain’s relapse into a third national COVID-19 lockdown has sparked the sharpest drop in business activity since May, with services companies hit hardest, a survey showed on Friday.
A preliminary “flash” IHS Markit/CIPS UK Composite Purchasing Managers’ Index (PMI) fell to 40.6 in January, down from 50.4 in December.
The drop below the 50 threshold for growth was bigger than any economist forecast in a Reuters poll, which had pointed to a reading of 45.5.
In addition to the latest lockdown, data company IHS Markit said Britain’s post-Brexit shift to a more bureaucratic trading arrangement with the European Union had contributed to the decline.
“Services have once again been especially hard hit, but manufacturing has seen growth almost stall, blamed on a cocktail of COVID-19 and Brexit, which has led to increasingly widespread supply delays, rising costs and falling exports,” Chris Williamson, chief business economist at IHS Markit, said.
The pace of job losses accelerated, after easing in December.
Economists polled by Reuters last week forecast a 1.4% fall in output for the first quarter. [ECILT/GB]
The official death toll from COVID-19 in the United Kingdom is nearing 100,000 and is currently the highest in Europe and the fifth worst in the world after the United States, Brazil, India and Mexico.
Britain is rolling out vaccines faster than many of its peers, which should bode for a swift economic rebound later this year.
Thursday’s survey showed companies were upbeat about their business prospects for the year ahead, with optimism hitting a 6-1/2-year high.
The PMI for the services industry, which accounts for the vast bulk of Britain’s private sector economy, fell to 38.8 in January from 49.4 in December, its lowest level since May and marking a third month of contraction.
Factories fared much better, despite fading growth in output and a renewed decline in order books. The manufacturing PMI fell to 52.9 in January from 57.5 in December, remaining above the 50 dividing line for growth.
(Editing by Toby Chopra)
Japan Maintains Severe Assessment of Economy Amid Emergency – BNN
(Bloomberg) — Japan’s government maintained its assessment of the economy in January, using the same terms to describe its state for the seventh straight month, amid a jump in coronavirus numbers that’s triggered a renewed state of emergency.
In its monthly report released Friday, the Cabinet Office described the overall economy in the same grim terms as in December, saying conditions remain severe despite signs of improvement. The government upgraded its view of capital expenditure and housing construction, but lowered its assessment for private consumption and business conditions.
The assessment comes after Prime Minister Yoshihide Suga’s administration this month put more than half the country’s economy under a state of emergency amid a sharp jump in Covid-19 cases to records. Nationwide daily case numbers have been moving around 5,000 in recent days.
Japan Expands Virus Emergency to Cover 60% of Economy (3)
Japanese exports have been rebounding, increasing for the first time in more than two years in December thanks to a recovery in China, but other parts of Japan’s economy continue to lag. Prices haven’t risen for months and the country’s second state of emergency is hitting private consumption and the service sector.
©2021 Bloomberg L.P.
Biden inherits damaged economy, with signs of hope emerging
WASHINGTON — President Joe Biden has inherited a badly damaged economy pulverized by the pandemic, with 10 million fewer jobs than a year ago and as many as one in 6 small businesses shut down.
Yet there are also signs of resilience and recovery that suggest the prospect of a rebound, perhaps a robust one, by the second half of his first year in office. Despite the bleakness of the economic landscape, Biden by most accounts faces a less daunting challenge than he confronted as vice-president under Barack Obama more than a decade ago in the depths of the Great Recession.
The hardships inflicted by the pandemic recession have been deep but concentrated in a few extremely hard-hit sectors and harshly unequal. Much of the economy, particularly housing and manufacturing, has held up surprisingly well compared with previous recessions. People fortunate enough to keep their jobs — disproportionately affluent Americans — have bulked up their savings. They could be poised to unleash a spending boom later this year once vaccines have been more broadly distributed.
There are also signs that the job market, for all its deep losses, is enduring less permanent harm than it has in the past and might be set up for a fast hiring recovery.
Still, for now, many signs are dreary: Consumers have retrenched, and months of job gains have turned to losses. New applications for unemployment benefits remain shockingly high 10 months since layoffs first spiked last March. And the human toll of the pandemic recession, from depressingly long food-bank lines to apartment evictions, has yet to show much improvement.
All of which helps explains why Biden saw the need last week to propose another mammoth federal rescue aid package — a $1.9 trillion plan to end what he called “a crisis of deep human suffering.”
Here is a closer look at the economy the 46th president is confronting:
JOBS: MORE LOSSES, LESS SCARRING
The nation has regained more than half the 22 million jobs that were lost to the pandemic in March and April. But hiring has weakened for six straight months. In December, it actually turned negative, with the loss of 140,000 jobs.
Employers may still be cutting jobs because viral cases remain rampant, cold weather is restricting outdoor dining and other activities and consumers are avoiding in-person services, from hotels to airports to retail shops. With the unemployment rate at an elevated 6.7%, a shortage of hiring is prolonging the pain for people out of work.
A major concern for economists is what they call “scarring” in the job market — long-term and permanent job losses that detach people from the job market and diminish their skills and professional connections. This trend tends to make it harder to reabsorb the unemployed into the economy once it recovers.
Here the evidence is mixed: The number of unemployed who say their job losses are permanent — and therefore unlikely to return even when the economy rebounds — has jumped to 3.4 million, more than double the pre-pandemic level. But it appears to be levelling off: The number fell in December and is little changed from August. By comparison, permanent job losses peaked at 6.8 million during the Great Recession in 2008-2009.
And the ranks of those unemployed for 15 weeks or longer has tumbled from more than 8 million in August to 5.5 million last month. Those figures hold out hope that the unemployment rate will fall fairly quickly as growth accelerates.
CONSUMERS PULLING BACK, FOR NOW
The raging pandemic took a fresh toll on the economy over the holiday shopping season, with sales at retail stores falling for three months in a row. Sales at restaurants and bars tumbled 4.5% in December and collapsed by one-fifth for 2020 as a whole.
There are early signs, though, that $600 checks for most Americans that were authorized in last month’s rescue aid package are beginning to boost spending. Economists at Bank of America said that spending on their debit and credit cards jumped 9.7% for the week that ended Jan. 9 compared with a year earlier. That was up from a 2% year-over-year increase before the $600 payments. And the increase was particularly pronounced for those making below $50,000 a year, who spent 22% more, Bank of America said.
HOUSING SIZZLES FOR THOSE WHO CAN AFFORD ONE
Many Americans who have kept their jobs have capitalized on the new work-from-home culture, becoming first time homebuyers or moving into larger digs. Builders broke ground in December on the most new homes since 2006. Home sales are running about 25% above year-ago levels. Four-fifths of construction jobs lost in the pandemic have returned, a much faster rebound than employment overall.
The housing boost has also lifted home prices nationwide, though the gains have been uneven. An analysis by housing website Zillow has found that the number of cities with home prices of at least $1 million surged 17% in the year ending in November. But nearly three-quarters of those gains occurred in subdivisions of nine large coastal metros, such as New York, Los Angeles and San Francisco. That trend has contributed to worsening wealth inequality since the pandemic began.
MANUFACTURING IS SPARED THE WORST, FOR ONCE
Though factory output is still recovering from the initial pandemic-induced shutdowns, for once the nation’s manufacturing workers aren’t among the worst-hit. Manufacturing output rose 0.9% last month, its eighth straight increase. And factories have added jobs for eight months.
In a sign of the industrial economy’s health, the Union Pacific railroad said it shipped 3% more volume in the final three months of the year, compared with a year earlier, its first gain since the pandemic. Even so, both manufacturing output and employment remain below pre-pandemic levels.
Manufacturers have benefited from a shift in spending toward goods — cars, electronics, furniture and the like — and away from travel and entertainment. Some of that pattern will likely reverse should the vaccines succeed in conquering the coronavirus.
A WILLING FEDERAL RESERVE
One more potential tailwind for the Biden economy is a Federal Reserve that has made clear that it plans to keep its benchmark short-term interest rate pegged near zero through at least 2023. Chair Jerome Powell has also said the Fed will keep buying $120 billion in bonds a month until there is “substantial further improvement” in the economy, which most economists expect will last into 2022. The Fed’s bond purchases are intended to keep long-term loan rates low to spur borrowing and spending.
That policy marks a key change for the Fed, which many economists think prematurely raised short-term rates in late 2015 as the economy was still improving and employers adding jobs. That rate increase was motivated by concerns that inflation was poised to accelerate as the unemployment rate fell close to 5%. Yet unemployment eventually fell to 3.5%, with inflation nowhere in sight.
Powell and other Fed officials have stressed that they have learned from that mistake and are now much less concerned about higher inflation and more focused on driving unemployment back down to an ultra-low rate.
Christopher Rugaber, The Associated Press
Source:- 570 News
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