Connect with us

Economy

The White House’s Push to Reopen the Economy This Early Is a Dangerous Gamble – The New Yorker

Published

on


President Donald Trump’s planned pivot toward talking about the economy was met by startling new public-health data about the coronavirus pandemic.Photograph by Chris Kleponis / Bloomberg / Getty

At the start of last week, Jonathan Swan, of Axios, reported that the “White House plans to shift its coronavirus messaging toward boosting the economy and highlighting ‘success stories’ of businesses, reducing its public emphasis on health statistics.” The story proved to be accurate. Rather than having Donald Trump appear at a daily coronavirus briefing, his staff set up a series of meetings with business leaders for him to attend. And this past weekend, the White House dispatched two of its economic advisers to appear on television.

“By the end of May, almost every state will be mostly open economically,” Kevin Hassett, a former head of the White House Council of Economic Advisers, who recently rejoined the Administration, told Fox & Friends. “We are going to monitor the situation closely, but make no mistake about it, it’s really, really good news that we’ve been able to open up as soon as we have, and to do so according to the guidelines that doctors”—Deborah Birx, the coördinator of the White House coronavirus task force, and Anthony Fauci, the director of the National Institute of Allergy and Infectious Diseases—“set out.” Larry Kudlow, the head of the National Economic Council, echoed Hassett’s message. In appearances on CNN and Fox Business, Kudlow predicted that the economy would rebound strongly in the second half of the year, and he said that 2021 could be a “spectacular” year. During a virtual town hall held at the Lincoln Memorial, on Sunday night, Trump didn’t go quite that far. But he did insist that it is possible to end the shutdowns and reopen the economy while protecting the vulnerable. “I think you can really have it both ways,” he said.

With Florida, Missouri, and a number of other states allowing many businesses to reopen on Monday morning, the White House’s pivot from messaging about fighting the virus to promoting the economy seemed to be complete. According to a running tally that the Times maintains, twenty-four states in total had already ordered a partial reopening of their economies. But then came a pair of shocking developments.

At lunchtime on Monday, the Times published some details of an internal “situation update” from the Centers for Disease Control and Prevention. The update, which also bore the seal of the Department of Health and Human Services and the Department of Homeland Security, included a chart showing the number of daily deaths caused by COVID-19 rising steadily over the next month and reaching about three thousand—which is roughly seventy per cent more than the current level—by the start of June. Another chart showed the daily number of new cases rising to more than two hundred thousand during the same period, which would represent an even bigger increase in relative terms. In the past few days, the number of positive tests in the U.S. has averaged about thirty thousand, according to the Covid Tracking Project.

The White House quickly issued a statement distancing itself from the new projections and saying they hadn’t even been submitted to the coronavirus task force. “This data is not reflective of any of the modeling done by the task force or data that the task force has analyzed,” the statement said. “The President’s phased guidelines to open up America again are a scientific driven approach that the top health and infectious diseases experts in the federal government agreed with.”

Later on Monday, the Washington Post reported that the projections were the work of Justin Lessler, an associate professor of epidemiology at Johns Hopkins, who had showed his data to the C.D.C. “as a work in progress.” Lessler told the Post that his projections weren’t intended as a forecast, and he didn’t know how they ended up in the C.D.C. update. But Lessler also said that while “the exact numbers and charts in the CDC document may differ from the final results, they do show accurately how Covid-19 cases could spiral out of control.” According to the Post, “He said 100,000 cases per day by the end of the month is within the realm of possibility. Much depends on political decisions being made today.”

One thing we’ve learned over the past couple of months is not to place too much stock in any single set of projections. All such predictions are acutely sensitive to assumptions about things like social distancing, travel, and ease of transmission. But even if this particular set of simulations should be treated with caution, the consensus among medical experts is that reopening the economy while the virus is still spreading represents a risky strategy, and the earlier the reopenings take place, the greater the risks.

Also on Monday, the influential Institute for Health Metrics and Evaluation, at the University of Washington, issued a new projection that showed the cumulative death total rising to a hundred and thirty-five thousand by early August—a big increase over the institute’s previous forecast, which was issued in April and predicted about sixty thousand deaths. “The revised projections reflect rising mobility in most US states as well as the easing of social distancing measures expected in 31 states by May 11, indicating that growing contacts among people will promote transmission of the coronavirus,” the institute, whose model some states rely on to help plan their medical needs, said in a press release. “Increases in testing and contact tracing, along with warming seasonal temperatures—factors that could help slow transmission—do not offset rising mobility, thereby fueling a significant increase in projected deaths.”

These warnings echoed statements by other experts and public-health officials, including one who used to work for the Trump Administration. In an op-ed published in Monday’s Wall Street Journal, Scott Gottlieb, who was the commissioner of the Food and Drug Administration from 2017 to 2019, pointed out that while the shutdowns and social distancing have had a big effect in places like New York City, the national figures for deaths and new infections have stayed pretty steady over the past month. “Mitigation hasn’t failed; social distancing and other measures have slowed the spread,” Gottlieb wrote. “But the halt hasn’t brought the number of new cases and deaths down as much as expected or stopped the epidemic from expanding.” He added, “as states begin to open up their economies and Americans return to traveling, the disease will continue to expand.”

That doesn’t necessarily mean that reopening some parts of the economy is unjustified. The economic shutdown is also imposing huge costs, and governments throughout the world are looking for ways to reduce those costs while protecting the vulnerable and continuing to reduce the infection rate. The reopening guidelines that the White House task force issued in mid-April said states that want to relax their stay-at-home orders should meet a number of requirements. Among them were having a “robust testing program in place for at-risk healthcare workers, including emerging antibody testing,” and insuring that “sentinel surveillance sites are screening for asymptomatic cases . . . at locations that serve older individuals, lower-income Americans, racial minorities, and Native Americans.”

In many parts of America, this essential preparatory work simply hasn’t been done. Nationwide, the level of testing is running at about two hundred and fifty thousand a day, which is far below the level that many independent medical experts recommend. Last week, some Harvard researchers and the health-news site STAT released a study of individual states, including ones that were planning to reopen soon. “To catch hot spots before they turn into wildfires of disease, Georgia must do 9,600 to 10,000 tests per day; it has been averaging around 4,000,” the study said. “Florida will need 16,000; in the last week it has been hitting just above 10,000.” Texas, which allowed many stores and restaurants to reopen last Friday despite a new case count that is still rising, is another big state that is doing far less testing than experts recommend.

To be sure, this testing failure isn’t entirely the states’ fault, although it was their decision to proceed with reopening regardless. With the White House having effectively abdicated responsibility for testing, many states are still having difficulty acquiring the necessary test kits and chemical agents. And, of course, this hasn’t been the only Presidential failure. Even as his own medical advisers have warned against moving too quickly, Trump has defended protestors, including armed ones, who have demonstrated against the state lockdown orders. In the past few days, he has cheered on governors who are relaxing restrictions even as their states have failed to meet some of his Administration’s own safety guidelines.

The early reopening is far from the carefully calibrated, carefully monitored exercise that Birx and Fauci, the White House’s two leading medical advisers, talked about when they unveiled the federal guidelines last month. It looks more like a reckless gamble to get the economy going before the November election without sparking a big new wave of infections. Perhaps it will succeed: no one can say for sure either way. But if it doesn’t work out well, and the new projections for the spread of the virus prove to be accurate, the weakest and most vulnerable members of American society will be the ones who bear the heaviest cost.


A Guide to the Coronavirus

Let’s block ads! (Why?)



Source link

Continue Reading

Economy

Province's decision to reopen economy still lacks some clarity: CFIB – HalifaxToday.ca

Published

on


The Atlantic Vice President of the Canadian Federation of Independent Business says he’s pleased with the province’s decision to reopen the economy, but adds it still lacks some clarity.

On Wednesday, Premier Stephen McNeil announced the province’s next steps to reopening the economy, saying businesses that were required to shut down due to the COVID-19 pandemic will be able to restart operations on June 5.

Jordi Morgan told NEWS 95.7 he’s happy to hear this, but adds there are still some questions that need to be answered.

“It remains to be seen how well this happens because we’re still not entirely clear on what all the requirements are for these individual businesses,” said Morgan.

Morgan is also pleased with the province’s new small business reopening and support grant, a $25 million fund that will help businesses welcome back customers safely.

“Very happy to see that because there are a number of businesses that are going to require some bridging to reopen, invest in personal protective equipment and other things that are necessary in order to operate the business,” said Morgan.

He says once they get all the guidelines in place, they’ll have a better idea of how to operate and keep both the public and employees safe.

Let’s block ads! (Why?)



Source link

Continue Reading

Economy

Nearly 40% of the economy may vanish in Q2 because of COVID-19, but then do something surprising – Yahoo Canada Finance

Published

on


The S&P 500 has crossed the 3,000 level again and investors are clearly riding high on hope for a second half economic recovery post the worst of COVID-19.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="But that doesn’t mean the market is immune to a pullback this summer primarily because the economic data will likely continue to be horrible. Remember bulls, the U.S. economy has been kicked in the face by the pandemic, and a rebound won’t happen overnight simply because states are reopening. Corporate sales and profits remain under severe strain, sending many off to explore bankruptcy or cut thousands of workers even with quarantines being lifted.” data-reactid=”17″>But that doesn’t mean the market is immune to a pullback this summer primarily because the economic data will likely continue to be horrible. Remember bulls, the U.S. economy has been kicked in the face by the pandemic, and a rebound won’t happen overnight simply because states are reopening. Corporate sales and profits remain under severe strain, sending many off to explore bankruptcy or cut thousands of workers even with quarantines being lifted.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="“We think that the reported unemployment rate may be around as high as 20% in May,” Barclays chief U.S. economist Michael Gapen warned on Yahoo Finance’s The First Trade. The unemployment rate in April increased by 10.3 percentage points to 14.7%.” data-reactid=”18″>“We think that the reported unemployment rate may be around as high as 20% in May,” Barclays chief U.S. economist Michael Gapen warned on Yahoo Finance’s The First Trade. The unemployment rate in April increased by 10.3 percentage points to 14.7%.

Gapen believes the U.S. economy may contract a whopping 40% annualized in the second quarter, then surprisingly grow by 25% in the third quarter and 8% in the fourth quarter.

Part of Gapen’s cautiousness on the economy in the second quarter stems from his outlook on the consumer, which comprises two-thirds of the U.S. economy as is often cited.

A woman shops for clothes Wednesday, May 27, 2020, in Los Angeles. California moved to further relax its coronavirus restrictions and help the battered economy. Retail stores, including those at shopping malls, can open at 50% capacity. (AP Photo/Marcio Jose Sanchez)
A woman shops for clothes Wednesday, May 27, 2020, in Los Angeles. California moved to further relax its coronavirus restrictions and help the battered economy. Retail stores, including those at shopping malls, can open at 50% capacity. (AP Photo/Marcio Jose Sanchez)

“I think when we move into the third quarter, the savings rate will start coming down. All else equal, we are expecting the consumer to remain cautious. I think you will see a blend. Some return to normalcy, but it will take time,” Gapen explains. “Negative wealth is still at play. Equity markets are doing well, but the average household may not feel that. And I think that there will be caution and a preference for saving.”

To be sure, recent economic data warrants the markets taking a short-term breather.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Another 2.123 million Americans filed for unemployment benefits&nbsp;in the week ending May 23. Over the past 10 weeks, more than 40 million Americans have filed for unemployment insurance. U.S. durable goods orders tanked 17.2% in April, U.S. Commerce Department data showed Thursday. Durable goods dropped 16.6% in March.” data-reactid=”34″>Another 2.123 million Americans filed for unemployment benefits in the week ending May 23. Over the past 10 weeks, more than 40 million Americans have filed for unemployment insurance. U.S. durable goods orders tanked 17.2% in April, U.S. Commerce Department data showed Thursday. Durable goods dropped 16.6% in March.

Pending home sales in April fell 33.8% year over year, the National Association of Realtors said Thursday. That marked the biggest decline since January 2001.

“I think the market has priced in that April is probably the worst of the economic data,” explained Sevens Report Research founder Tom Essaye. “While it looks like the worst is behind us — which is great — we need to start to see more improvement.”

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Brian Sozzi is an editor-at-large and co-anchor of The First Trade at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.” data-reactid=”37″>Brian Sozzi is an editor-at-large and co-anchor of The First Trade at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Read the latest financial and business news from Yahoo Finance” data-reactid=”38″>Read the latest financial and business news from Yahoo Finance

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Follow Yahoo Finance on Twitter, Facebook, Instagram, Flipboard, SmartNews, LinkedIn, YouTube, and reddit.” data-reactid=”50″>Follow Yahoo Finance on Twitter, Facebook, Instagram, Flipboard, SmartNews, LinkedIn, YouTube, and reddit.

Let’s block ads! (Why?)



Source link

Continue Reading

Economy

France Paves Way for Economic Restart After Taming Virus – BNNBloomberg.ca

Published

on


(Bloomberg) —

France will lift domestic travel restrictions and allow most bars, restaurants and museums to reopen as the country slowly unfreezes its economy following weeks of stringent controls to contain the coronavirus epidemic.

While France won’t completely return to normal, it can ease restrictions starting on Tuesday as confinement measures proved more effective than expected in combating the spread of the disease.

“Freedom will finally become the rule again, and prohibition the exception,” Prime Minister Edouard Philippe said Thursday, following a cabinet meeting. “The results in terms of public health are good, even if we remain cautious.”

From the coming weekend, the state will accelerate plans to restart schools, reopen parks and scrap a rule limiting travel within France to 100 kilometers. The government favors opening internal European Union borders from June 15, while leaving a decision on travel beyond the bloc to the EU.

In areas including Paris and the surrounding region, lifting curbs will be slightly slower. Bars and restaurants will only be able to open outdoor spaces, and sports centers will not open until the next phase starting June 22.

France is following other major European economies in relaxing restrictions on the public. Germany has already undertaken a broad restart of businesses. In Spain, cafes and restaurants in Madrid and Barcelona re-opened this week, and foreign tourists should be allowed in again from July without a two-week quarantine.

Greece is also relaxing curbs on travels, re-opening restaurants and allowing foreign tourists from mid-June.

‘New Front’

Economic pressure to relax the rules was mounting in France after it implemented one of the strictest lockdowns. For two months, locals were banned from going more than one kilometer away from their homes without a justification.

The government eased some restrictions earlier this month, following a drop in the number of severe Covid-19 infections. But the economy has continued to suffer with activity around 21% below normal levels, according to estimates from national statistics agency Insee, which expects France’s 2020 contraction to be deeper than the 8% the government forecast.

“A new front is opening today: The country will have to fight against the impact of a historic recession,” Philippe said.

The French state has already announced a plan to revitalize the car industry and will announce another plan for the aircraft sector next week.

The government has also earmarked 18 billion euros ($20 billion) for the hard-hit tourism industry, which represents around 7% of GDP. France has suggested domestic tourism would be possible during the summer with some restrictions, but that trips to foreign countries could remain on hold.

Read More: Tourism Slump Has Holiday Destinations Scrambling

The restaurant and hotel industry has warned that social-distancing measures could dent profitability in the long run, as fewer people will be able to be catered to and costs will rise.

©2020 Bloomberg L.P.

Let’s block ads! (Why?)



Source link

Continue Reading

Trending