Six U.S. states to coordinate gradual reopening after coronavirus shutdown

By Maria Caspani and Jessica Resnick-Ault

NEW YORK (Reuters) – Six states in the U.S. Northeast took the first tentative step on Monday toward reopening their economies by forming a regional panel to develop a strategy for the gradual lifting of restrictions aimed at stanching the coronavirus pandemic.

The announcement of the panel, to include economic and health officials from each state as well as the chief of staff of all six governors, came after President Donald Trump insisted that any decision on restarting the economy was his to make.

The states of New York, New Jersey and Connecticut, with a total population of 32 million, will join with neighboring Delaware, Pennsylvania and Rhode Island in coordinating their efforts to reopen the economy as more signs the outbreak has stabilized emerged over the weekend.

The joint planning reflected growing concern among health officials and political leaders that easing stay-at-home orders too soon could allow the pandemic to re-accelerate, undoing hard-won progress the country has made in recent weeks.

“Nobody has been here before, nobody has all the answers,” New York Governor Andrew Cuomo said during an open conference call with his five counterparts. “Addressing public health and the economy: which one is first? They’re both first.”

Cuomo said earlier on Monday that reopening “is a delicate balance” that involved “recalibrating” which businesses and activities are essential.

The number of deaths reported in the United States overall on Sunday was 1,513, the smallest increase since April 6. The largest number of fatalities is still in and around New York City, the most populous U.S. city with about 8.4 million people.

Tensions between state governors and U.S. President Donald Trump have bubbled up since the outbreak worsened a month ago and surfaced in the debate about when and how to restart economic activity.

“It is the decision of the president, and for many good reasons,” Trump said on Twitter on Monday. He went on to write that his administration was working closely with the governors.

“A decision by me, in conjunction with the governors and input from others, will be made shortly!” Trump’s tweet said.

Legal experts say a U.S. president has limited power under the U.S. Constitution to order citizens back to their places of employment, or cities to reopen government buildings, transportation, or local businesses to reopen.

‘WORST IS OVER’ BUT…

Cuomo said on Monday that “the worst is over” for his state, the U.S. epicenter of the virus, but he hedged his remark with a warning that gains achieved through social distancing could be undone if “we do something stupid” and relax those restrictions too quickly.

“We can control the spread. Feel good about that,” Cuomo said. “The worst is over, if we continue to be smart going forward.”

Political leaders said a reopening of the economy may hinge on more widespread testing and cautioned that lifting of stay-at-home restrictions too early could reignite the outbreak. The Trump administration has signaled May 1 as a potential date for easing the restrictions.

The United States, with the world’s third-largest population, has recorded more fatalities from COVID-19 than any other country, with more than 23,000 deaths as of Monday morning, according to a Reuters tally.

Wyoming reported its first death from the coronavirus on Monday, the final U.S. state to report a fatality.

Official statistics, which exclude deaths outside of hospitals, have understated the actual number of people who have succumbed to COVID-19, the respiratory disease caused by the new coronavirus, health experts said. (Graphic: https://tmsnrt.rs/2w7hX9T)

More than 10,000 people have died in New York state, and the death rate was “basically flat at an horrific level of pain and sorrow,” Cuomo said, referring to a flattening of the curve as seen on a graph.

In New York City, three indicators have to show a sustained decline before the city could consider the outbreak to be in a less dangerous phase, Mayor Bill de Blasio said: the daily number of people admitted to hospitals, the number of people in intensive care units, and the percentage of positive tests for the virus.

New York City Health Commissioner Dr. Oxiris Barbot acknowledged a “tightening” of the supply chain for swabs needed in coronavirus testing, and said it was part of a “national and international challenge” to ramp up testing.

Chris Sununu, the Republican governor of New Hampshire, said testing for the coronavirus had improved “but we don’t have enough. Nobody has enough.”

“There’s just a limited supply for a massive amount of demand,” Sununu told CNN.

To ease the impact of the shutdown on the U.S. economy, the two top Democrats in the U.S. Congress urged Republicans on Monday to authorize more funding for national testing. An effort to rush fresh assistance to U.S. small businesses stalled in Congress as the health emergency failed to overcome partisan differences between Republicans and Democrats.

(Reporting by Maria Caspani Jessica Resnick-Ault; additional reporting by Doina Chiacu and Lisa Lambert in Washington and Nathan Layne in Wilton, Connecticut; Writing by Grant McCool; Editing by Frank McGurty and Howard Goller)

U.S. coronavirus outbreak could peak this week, CDC director says

By Doina Chiacu and Lisa Lambert

WASHINGTON (Reuters) – The coronavirus outbreak could reach its peak in the United States this week, a top U.S. health official said on Monday, pointing to signs of stabilization across the country.

The United States, with the world’s third-largest population, has recorded more fatalities from COVID-19 than any other country, more than 22,000 as of Monday morning according to a Reuters tally.

About 2,000 deaths were reported for each of the last four days in a row, the largest number of them in and around New York City. Experts say official statistics have understated the actual number of people who have succumbed to the respiratory disease, having excluded coronavirus-related deaths at home.

“We are nearing the peak right now,” Robert Redfield, director of the Centers for Disease Control and Prevention (CDC) told NBC’s “Today” show. “You’ll know when you’re at the peak when the next day is actually less than the day before.”

Sweeping stay-at-home restrictions to curb the spread of the disease, in place for weeks in many areas of the country, have taken a painful toll on the economy, raising questions over how the country can sustain business closures and travel curbs.

On Sunday, a Trump administration official indicated May 1 as a potential date for easing the restrictions while cautioning that it was still too early to say whether that goal would be met.

Redfield refused to give a time frame for the re-opening of the U.S. economy and praised social-distancing measures that he said helped curb the mortality rate.

“There’s no doubt we have to reopen correctly,” Redfield said. “It’s going to be a step-by-step gradual process. It’s got to be data-driven.”

Nancy Pelosi, speaker of the U.S. House of Representatives, cautioned that the country was not prepared to end the shutdown.

“We all desire an end to the shutdown orders so we can get Americans back to work and back to normal,” Pelosi said in a statement. “However, there is still not enough testing available to realistically allow that to happen.”

This week Congress will work on further measures to soften the blow of the pandemic. Democrats want to add money for other anti-coronavirus efforts to a measure targeted at small businesses, including funding for rapid national testing and personal protective equipment.

“It cannot wait,” Pelosi said.

President Donald Trump retweeted a call to fire Dr. Anthony Fauci after the country’s top expert on infectious diseases said lives could have been saved if the country had shut down sooner during the novel coronavirus outbreak.

The retweet fueled speculation Trump was running out of patience with the popular scientist and could fire him. The White House on Monday did not comment on Trump’s retweet.

(Reporting by Doina Chiacu and Lisa Lambert in Washington, writing by Maria Caspani; Editing by)

Sign of the times: Mile-long line of cars outside California grocery giveaway

By Lucy Nicholson

VAN NUYS, Calif. (Reuters) – A pop-up food pantry in Southern California on Thursday drew so many people that the line of cars waiting for free groceries stretched about a mile (1.6 km), a haunting sign of how the coronavirus pandemic has hurt the working poor.

Hundreds of other people, many wearing trash bags to shelter from the rain, arrived at the one-day grocery giveaway on foot, forming a blocks-long queue in Van Nuys, in the central San Fernando Valley region of Los Angeles.

People pick up fresh food at a Los Angeles Regional Food Bank giveaway of 2,000 boxes of groceries, as the spread of the coronavirus disease (COVID-19) continues, in Los Angeles, California, U.S., April 9, 2020. REUTERS/Lucy Nicholson

Organizers said they had enough groceries to hand out to more than 2,500 families, with each receiving a 36-pound (16-kg) box of rice, lentils and other staples as well as frozen chicken, oranges and other foods.

“I have six kids and it’s difficult to eat. My husband was working in construction but now we can’t pay the rent,” said Juana Gomez, 50, of North Hollywood, as she waited for her turn.

The COVID-19 pandemic has shut down nonessential businesses across the United States, with more than 90% of Americans under some kind of stay-at-home order, depriving millions of a paycheck.

The northeast part of Los Angeles, home to many working poor Latino families, has been especially hard hit.

LA Regional Food Bank supplied the food donated outside Van Nuys City Hall. Its president, Michael Flood, said such giveaways were becoming an increasingly important way to help feed people in need, with “one or two a day” being held in different locations in Los Angeles County.

Thursday’s food giveaway — coordinated by Los Angeles City Council President Nury Martinez in partnership with the Los Angeles Federation of Labor, AFL-CIO, the Los Angeles Regional Food Bank and Labor Community Services — was open to anyone in need.

“This food saves me money because my little income goes to my rent,” said Daniel Jimenez, 40, an independent contractor for golf tournaments whose young children joined him to pick up food.

“I haven’t been working for three weeks. I have a little money saved but I’m paying rent, gas, and cellphone bills. I don’t even know when we’re going back to work,” he said.

As he spoke, volunteers shouted constant reminders to those who walked up to maintain social distancing.

“For a lot of people, they are new to the situation of needing help and not knowing where to turn,” Flood said, noting many people were now suddenly filing for unemployment and government food assistance programs.

“But that may take some time for them to get those benefits. We want to do what we can to get food in the hands of families, just so they can eat,” he said.

(Writing by Barbara Goldberg in New York; Editing by Frank McGurty and Tom Brown)

Latest on the spread of the coronavirus around the world

(Reuters) – The number of confirmed infections of the novel coronavirus were reported to have exceeded 1.56 million globally and the death toll rose above 95,000, according to a Reuters tally as of 0200 GMT.

DEATHS AND INFECTIONS

* For an interactive graphic tracking the global spread, open https://tmsnrt.rs/3aIRuz7 in an external browser.

* U.S.-focused tracker with state-by-state and county map, open https://tmsnrt.rs/2w7hX9T in an external browser.

EUROPE

* Spain’s prime minister warned that nationwide confinement would likely last until May even though the worst should soon be over. The death toll fell again on Friday with 605 fatalities registered over the past 24 hours.

* British Prime Minister Boris Johnson was resting in hospital on Friday as he recovered from COVID-19 while Britons were told to avoid the temptation of spring during the Easter break with the outbreak approaching a peak.

* Social distancing measures have helped Germany to slightly slow the spread of the coronavirus, Chancellor Angela Merkel said.

* Hungary needs more ventilators and intensive care hospital beds, its prime minister said, as the government reported the single biggest daily increase in infections.

* Poland said it infections may peak in the coming days.

* Bulgaria’s prime minister said the country’s Orthodox churches and temples will be open for traditional Palm Sunday and Easter services despite the outbreak.

* North African migrants rescued from a sinking boat came ashore in Malta early on Friday, hours after the government had said no further groups would be allowed in after it closed its ports.

AMERICAS

* Americans must resist the impulse to ease social-separation measures at the first glimpse of progress now being seen in the coronavirus battle, state government and public health leaders warned.

* Lockdowns in Brazil’s largest cities are beginning to slip, according to new data this week seen and analysed by Reuters, with more people leaving their homes as President Jair Bolsonaro continues to criticize the measures.

* Hundreds of Ecuadorean prisoners will begin making coffins to help cover a shortage emerging in Guayaquil, the epicenter of one of the worst outbreaks in Latin America.

* Chile will start handing out certificates to people who have recovered that will exempt them from adhering to quarantines or other restrictions.

* Mexico has recorded its first two deaths of pregnant women from the coronavirus as the death toll reached 194, the health ministry said.

ASIA AND THE PACIFIC

* China’s Wuhan, where the pandemic began, is still testing residents regularly despite relaxing its tough two-month lockdown, with the country wary of a rebound as it sets its sights on normalising the economy.

* Suifenhe, on China’s far northeastern border with Russia, has seen an influx of people returning home, many infected with the virus, travelling by road from Vladivostok.

* Metropolitan Tokyo asked some businesses to close and Kyoto told tourists to stay away, amid fears the government’s measures are too little and too late.

* Some Catholic penitents flagellated themselves and prayed outside closed churches in the Philippines on Good Friday, despite strict orders for people to stay indoors.

* Malaysia extended movement and travel restrictions until April 28.

* Early voting in South Korea’s parliamentary election began on Friday with coronavirus patients casting ballots at disinfected polling stations.

* Cambodia’s parliament passed a law on Friday to prepare for a state of emergency.

* Kazakhstan will extend its state of emergency until the end of April.

* Australia will deploy helicopters, set up police checkpoints and hand out hefty fines to deter people from breaking an Easter travel ban.

MIDDLE EAST AND AFRICA

* Days after Congo announced emergency restrictions, a police video started circulating online showing an officer in the capital beating a taxi driver for violating a one-passenger limit.

* All Botswana’s parliamentarians including the president will be quarantined for two weeks and tested, after a health worker screening lawmakers for the virus tested positive.

* The epidemic has so far infected over 440 people in Burkina Faso, including six government ministers, and killed 24.

* Yemen reported its first case on Friday, as aid groups try to prepare for an outbreak where war has shattered the health system and spread hunger and disease.

ECONOMIC FALLOUT

* The pandemic will trigger the worst economic fallout since the 1930s Great Depression in 2020, with only a partial recovery seen in 2021, the head of the International Monetary Fund said.

* The number of Americans seeking unemployment benefits in the last three weeks has blown past 15 million, with weekly new claims topping 6 million for the second straight time.

* U.S. President Trump said he is expediting help to farmers, especially small farmers.

* European Union finance ministers agreed on Thursday on half-a-trillion euros worth of support for their economies but left open the question of how to finance recovery in the bloc headed for a steep recession.

* The French government more than doubled the expected cost of its coronavirus crisis measures, pushing the budget deficit and national debt to record levels.

* Over 200,000 Irish workers are now in receipt of a new wage subsidy scheme, meaning the state is supporting nearly 30% of the labour force.

* Malaysia’s biggest palm oil producing state has agreed to reopen plantations and mills that do not have any coronavirus infections.

* The IMF has approved $147 million under its Rapid Financing Instrument to help Gabon confront the pandemic.

(Compiled by Sarah Morland, Milla Nissi, Aditya Soni and Subhranshu Sahu; Editing by Tomasz Janowski, Anil D’Silva and Arun Koyyur)

U.S. coronavirus expert Fauci: ‘Now is no time to back off’

By Doina Chiacu

WASHINGTON (Reuters) – The top U.S. infectious disease expert warned on Friday that even though hard-hit spots like New York are showing positive results in the battle against the coronavirus, it is too early to relax restrictions on Americans.

The warning from Dr. Anthony Fauci came as President Donald Trump administration’s top economic officials said on Thursday they believe the U.S. economy could start to reopen for normal business in May, despite health experts’ urging to continue social distancing to defeat the coronavirus.

Trump, a Republican seeking re-election on Nov. 3, has made clear he wants to get the economy going as soon as possible.

“Hopefully we’re going to be opening up… very, very, very, very soon, I hope,” he said on Thursday at the White House’s daily coronavirus briefing.

Fauci warned against relaxing restrictions too soon.

“What we’re seeing right now are some favorable signs,” Fauci said in an interview on CNN, citing progress in hard-hit New York.

Before moving to reopen society, he added: “We would want to see a clear indication that you were very, very clearly and strongly going in the right direction. Because the one thing you don’t want to do is you don’t want to get out there prematurely and you wind up back in the same situation.”

In New York, authorities said on Thursday the number of newly hospitalized patients in dropped for a second day, to 200, even though the number of coronavirus-related deaths in the state rose by 799 on Wednesday.

“You can’t relax,” Governor Andrew Cuomo said.

With many Americans celebrating the Easter holiday on Sunday, Fauci said it was important to keep social distancing measures in place.

“Now is no time to back off,” Fauci said.

Members of the coronavirus task force look at data every day for indications “we can go forward in a gradual way to essentially reopening the country,” Fauci said, and report back to Trump and Vice President Mike Pence. “That decision will be made at that level,” he said.

 

(Reporting by Doina Chiacu; Editing by Chizu Nomiyama)

U.S. urged to go slow on easing coronavirus lockdown, even as jobless claims surge

By Doina Chiacu and Maria Caspani

WASHINGTON (Reuters) – The top U.S. infectious disease expert on Thursday warned against reopening the economy too soon after a downward revisions in the coronavirus pandemic’s projected death toll, while a third week of massive jobless claims underscored the economic damage caused by social distancing.

While several officials have hailed the apparent success of mitigation efforts in bringing death projections down to 60,000 from more than 100,000, Dr. Anthony Fauci said it was important that people continue to stay home to avoid a resurgence in the spread of the disease.

“We’ve got to continue to redouble our efforts at the mitigation of physical separation in order to keep those numbers down and hopefully even get them lower than what you’ve heard recently,” Fauci, director of the National Institute of Allergy and Infectious Diseases, said on CBS “This Morning.”

Stay-home orders that have closed non-essential workplaces in 42 states have drastically slowed the once-humming U.S. economy and thrown millions of people out of work.

With several state unemployment insurance offices deluged in recent weeks, 6.6 million workers applied for jobless benefits in the week ended April 4, the U.S. Labor Department said on Thursday. That followed 6.9 million jobless applications the week before, the most since the Great Recession of 2008.

In all, some 16.8 million American workers have applied for jobless benefits in the past three weeks.

Fauci, appearing on several morning television programs, affirmed that recent models showing fewer deaths than previously projected were evidence that social distancing and other efforts at keeping people apart were slowing the spread of the virus.

“So I believe we’re going to see a downturn in that, and it looks more like the 60,000 than the 100,000-200,000,” Fauci said on the NBC “Today” program.

A University of Washington model often cited by U.S. and state officials projects that COVID-19, the respiratory ailment caused by coronavirus, will claim 60,415 American lives by Aug. 4, with the peak coming on Easter Sunday this weekend, when it projects that 2,212 will die

By Thursday morning, more than 432,000 U.S. residents had tested positive for the virus, and around 14,800 had died, according to Johns Hopkins University.

New Jersey Governor Phil Murphy on Wednesday tightened the virus-fighting efforts of his state, which has the second highest number of deaths, by halting all non-essential construction and ordering food and drug stores to limit the number of customers and require them to wear face coverings.

New York state, epicenter of America’s coronavirus crisis, set another single-day record of COVID-19 deaths on Wednesday, as veteran doctors and nurses voiced astonishment at the speed with which patients were deteriorating and dying.

Patients “look fine, feel fine, then you turn around and they’re unresponsive,” said Diana Torres, a nurse at Mount Sinai Hospital in New York City, the center of the nation’s worst outbreak.

The number of known coronavirus infections in New York state alone approached 150,000 on Wednesday, even as authorities warned that the official death tally may understate the true number because it omits those who have perished at home.

In Maryland, Pleasant View nursing home has become the site of one of the state’s worst outbreaks, 40 miles outside the U.S. capital of Washington, D.C.

Retired firefighter Gary Holmberg was only supposed to be there for a little while, recovering from a fall at his assisted living center. But about a month after he arrived, Holmberg, 77, became one of more than a dozen of the nursing home’s residents to die of COVID-19.

“He had a lot, lot more life left, there’s no question,” his said his son Rob Holmberg.

Officials have warned Americans to expect alarming numbers of coronavirus deaths this week, consistent with projections.

“We are in the midst of a week of heartache,” Vice President Mike Pence said during a White House briefing on Wednesday, but added, “we are beginning to see glimmers of hope.”

At the same briefing, President Donald Trump said he would like to reopen the U.S. economy with a “big bang” but not before the death toll is on the down slope.

Trump did not offer a time frame, but his chief economic adviser, Larry Kudlow, said on Tuesday a resumption of commerce was possible in four to eight weeks.

(Reporting by Doina Chiacu, Maria Caspani, Gabriella Borter and Peter Szekely; Writing by Peter Szekely; Editing by Alistair Bell)

Coming next from the Fed: How much for Main Street?

By Howard Schneider

WASHINGTON (Reuters) – The U.S. Federal Reserve responded fast to the coronavirus crisis with open-ended programs to keep financial markets running and ensure major companies could raise cash as they usually do through large capital markets.

By forcing major parts of the economy to simply stop operating, however, the current crisis poses a direct threat to the hundreds of thousands of small and medium-sized businesses that don’t raise money by issuing stocks or bonds, but rely on myriad combinations of bank loans, owner’s capital and, in some cases, personal credit cards or home equity loans.

The Fed, in coordination with the Treasury Department, is planning a Main Street Lending Facility as one of its linchpin programs in the crisis. U.S. Treasury Secretary Steven Mnuchin said on Wednesday he hoped to announce details of the program this week.

Ahead of that, the following summarizes what is known about the Main Street program and what analysts who watch the Fed closely think it might look like:

WHO WILL PAY FOR IT?

In the $2.3 trillion emergency response bill enacted on March 27, $454 billion is set aside for the U.S. Treasury to use for new programs at the Fed, including the one for “Main Street.”

HOW BIG WILL IT BE?

This is the crisis where “trillions” have become the go-to denomination. Joseph Brusuelas, an economist with business consulting firm RSM who has followed the Fed’s crisis response closely, expects the Fed to receive an $85 billion capital contribution from Treasury and turn that into $1 trillion of lending power for businesses.

HOW DOES THE FED DO THAT?

The Fed gets its punch through “leverage,” or taking a given amount of money from Treasury and allowing financial institutions to create perhaps 10 times that amount in credit. The Fed is not supposed to take losses, since that would amount to laying out taxpayers’ money that it is not authorized to spend. But most loans don’t go bad: in effect every dollar provided by Treasury allows many more dollars of lending, because most of it will be repaid. The Treasury’s funds are there to cover only the small portion expected to go bad.

HOW WILL IT WORK?

The Fed is restricted from lending directly to companies or individuals. But it can provide financing to a “special purpose vehicle” that then either lends to or buys assets from, say, a bank that does provide business and consumer loans. Because those lending institutions now know they can send the loans to the SPV, they are willing to make deals with companies and consumers even in a risky environment. Cornerstone Macro analyst Roberto Perli said the Fed’s SPV could either buy loans directly, one at a time, from banks, or have banks bundle them into larger securities.

WHO WILL BE ELIGIBLE?

This may be the most difficult issue. Large companies get credit ratings from independent agencies such as Standard & Poor’s or Moody’s, and the Fed has used those credit ratings to draw a line around which companies are eligible for its programs. For “Main Street” lending, the Fed may have to lean on banks to assess the finances of midsize companies and sift those struggling only because of the coronavirus from those that were struggling anyway. The focus may be on firms with 500 to 10,000 employees, since those below the cutoff can get small business loans and those above it typically use the capital markets. As of early 2019 there were about 18,000 companies with more than 500 workers – including more than 2,000 midsize manufacturers that are an important piece of the U.S. industrial base.

(Reporting by Howard Schneider; Editing by Dan Burns and Andrea Ricci)

Small U.S. businesses were already struggling. Then coronavirus hit

By Jonnelle Marte

(Reuters) – Many small businesses were struggling with funding shortfalls and financial challenges even before the coronavirus pandemic hit, leaving them with little cash on hand to weather the slowdown caused by the virus, according to data released by the Federal Reserve on Tuesday.

Many small firms, particularly the smallest businesses and those owned by black and Hispanic entrepreneurs, also lack traditional banking relationships, which could make it more difficult for them to receive financial assistance during the crisis.

“Small businesses nationwide now face unprecedented challenges as the country grapples with the significant economic and social effects of the COVID-19 pandemic,” Claire Kramer Mills, assistant vice president at the New York Fed, said in a statement.

The majority of small employers reported growing revenue last year and more than a third even expanded their staffs, according to the 2019 survey report of more than 5,500 small firms issued by the 12 Federal Reserve Banks.

However, two-thirds of the businesses said they faced financial challenges last year, according to the report, which focused on businesses with fewer than 500 employees.

In a supplemental brief, researchers at the New York Federal Reserve assessed the ability for small businesses to cope with a substantial hit to revenue, categorizing firms according to their financial health – a metric based on their profitability, credit scores and earnings. Among the “healthy” firms, only about 20% had enough cash saved to continue operating as normal after losing two months’ worth of revenue.

Most small businesses surveyed by the Fed said they would have to shrink their staffs, delay payments or scale down operations after taking such a hit. Many firms would need to go into debt or turn to personal funds to close the gap.

That hypothetical scenario – two months without revenue – posed to businesses owners at the end of last year is now a reality for many firms, which closed down or substantially reduced their operations because of nationwide efforts to contain the spread of the coronavirus.

A new $349 billion small business bailout fund launched last week to shore up businesses with fewer than 500 employees got off to somewhat rocky roll out last week after some banks grappled with unclear rules and inconsistent government infrastructure. Some banks initially said they were prioritizing existing customers, putting some small business owners at a potential disadvantage for the first-come, first-served program.

Only 44% of small businesses had turned to a bank for a loan in the past five years and just 6% had turned to a credit union, according to the Fed survey. Businesses with more than $1 million in annual revenue and those with white owners were more likely to have used banks for funding, while smaller businesses and those with black or Hispanic owners were more likely to have used online lenders.

(Reporting by Jonnelle Marte; Editing by Chizu Nomiyama)

U.S. economy will eventually reopen but with big changes: White House’s Kudlow

WASHINGTON (Reuters) – The Trump administration is aiming to reopen the U.S. economy when the nation’s top health experts give the go-ahead, but Americans’ lives will be drastically different, White House economic adviser Larry Kudlow said on Tuesday.

Even when people in the United States return to work and school, they will likely have to stay home when they have signs of sickness, face more widespread and ongoing testing and submit to routine temperature taking, he told Politico in an interview.

“We are aware that things are going to be different,” he said. “That’s going to be a new feature of American life. And I don’t know how quickly that gets up and going, but it’s going to be very, very important because we obviously want to prevent any recurrences.”

It remains unclear when the country, which remains largely shuttered amid the ongoing outbreak that has crushed the economy, will resume more normal operations as a number of states approach their potential peak number of cases amid federal guidelines to isolate until the end of April.

Health officials have called on Americans to brace for a tough week as the death toll rises, but on Tuesday said there were optimistic signs ahead that mitigation efforts were helping to contain the highly contagious and potentially lethal virus.

“It is the health people that are going to drive the medical decisions, here, the medical-related decisions,” Kudlow told Politico, adding that he still believes “that in the next four to eight weeks we will be able to reopen the economy and that the power of the virus will be substantially reduced and we will be able to flatten the curve.”

(Reporting by Susan Heavey and Jeff Mason; Additional reporting by Tim Ahmann; Editing by Chizu Nomiyama and Nick Zieminski)

Special Report: How the COVID-19 lockdown will take its own toll on health

By M.B. Pell and Benjamin Lesser

NEW YORK (Reuters) – It’s the most dramatic government intervention into our lives since World War II. To fight the coronavirus outbreak, governments across the globe have closed schools, travel and businesses big and small. Many observers have fretted about the economic costs of throwing millions of people out of work and millions of students out of school.

Now, three weeks after the United States and other countries took sweeping suppression steps that could last months or more, some public health specialists are exploring a different consequence of the mass shutdown: the thousands of deaths likely to arise unrelated to the disease itself.

The longer the suppression lasts, history shows, the worse such outcomes will be. A surge of unemployment in 1982 cut the life spans of Americans by a collective two to three million years, researchers found. During the last recession, from 2007-2009, the bleak job market helped spike suicide rates in the United States and Europe, claiming the lives of 10,000 more people than prior to the downturn. This time, such effects could be even deeper in the weeks, months and years ahead if, as many business and political leaders are warning, the economy crashes and unemployment skyrockets to historic levels.

Already, there are reports that isolation measures are triggering more domestic violence in some areas. Prolonged school closings are preventing special needs children from receiving treatment and could presage a rise in dropouts and delinquency. Public health centers will lose funding, causing a decline in their services and the health of their communities. A surge in unemployment to 20% – a forecast now common in Western economies – could cause an additional 20,000 suicides in Europe and the United States among those out of work or entering a near-empty job market.

None of this is to downplay the chilling death toll COVID-19 threatens, or to suggest governments shouldn’t aggressively respond to the crisis.

A recent report by researchers from Imperial College London helped set the global lockdown in motion, contending that coronavirus could kill 2 million Americans and 500,000 people in Great Britain unless governments rapidly deployed severe social distancing measures. To truly work, the report said, the suppression effort would need to last, perhaps in an on-again, off-again fashion, for up to 18 months.

In the United States, the White House this week said the final toll could rise to 240,000 dead. States have responded to the dire warnings, and the escalating number of cases revealed each day, by extending stay-at-home shutdowns.

The medical battle against COVID-19 is developing so rapidly that no one knows how it will play out or what the final casualty count will be. But researchers say history shows that responses to a deep and long economic shock, coupled with social distancing, will trigger health impacts of their own, over the short, mid and long term.

Here is a look at some.

SHORT TERM CONSEQUENCES

Domestic Violence

Trapped at home with their abusers, some domestic violence victims are already experiencing more frequent and extreme violence, said Katie Ray-Jones, the chief executive officer of the National Domestic Violence Hotline.

Domestic violence programs across the country have cited increases in calls for help, news accounts reported – from Cincinnati to Nashville, Portland, Salt Lake City and statewide in Virginia and Arizona. The YWCA of Northern New Jersey, in another example, told Reuters its domestic violence calls have risen up to 24%.

“There are special populations that are going to have impacts that go way beyond COVID-19,” said Ray-Jones, citing domestic violence victims as one.

Vulnerable Students

Students, parents and teachers all face challenges adjusting to remote learning, as schools nationwide have been closed and online learning has begun.

Some experts are concerned that students at home, especially those living in unstable environments or poverty, will miss more assignments. High school students who miss at least three days a month are seven times more likely to drop out before graduating and, as a result, live nine years less than their peers, according to a Robert Wood Johnson Foundation report.

Among the most vulnerable: the more than 6 million special education students across the United States. Without rigorous schooling and therapy, these students face a lifetime of challenges.

Special needs students “benefit the most from highly structured and customized special education,” said Sharon Vaughn, executive director of the The Meadows Center for Preventing Educational Risk at the University of Texas. “This means that they are the group that are most likely to be significantly impacted by not attending school both in the short and long term.”

In New Jersey, Matawan’s Megan Gutierrez has been overwhelmed with teaching and therapy duties for her two nonverbal autistic sons, eight and 10. She’s worried the boys, who normally work with a team of therapists and teachers, will regress. “For me, keeping those communications skills is huge, because if they don’t, that can lead to behavioral issues where they get frustrated because they can’t communicate,” Gutierrez said.

MEDIUM TERM CONSEQUENCES

Soaring Suicides

In Europe and the United States, suicide rates rise about 1% for every one percentage point increase in unemployment, according to research published by lead author Aaron Reeves from Oxford University. During the last recession, when the unemployment in the United States peaked at 10%, the suicide rate jumped, resulting in 4,750 more deaths. If the unemployment rate increases to 20%, the toll could well rise.

“Sadly, I think there is a good chance we could see twice as many suicides over the next 24 months than we saw during the early part of the last recession,” Reeves told Reuters. That would be about 20,000 additional dead by suicide in the United States and Europe.

Less than three weeks after extreme suppression measures began in the United States, unemployment claims rose by nearly 10 million. Treasury Secretary Steven Mnuchin warned the rate could reach 20% and Federal Reserve economists predicted as high as 32%. Europe faces similarly dire forecasts.

Some researchers caution that suicide rates might not spike so high. The conventional wisdom is that more people will kill themselves amid skyrocketing unemployment, but communities could rally around a national effort to defeat COVID-19 and the rates may not rise, said Anne Case, who researches health economics at Princeton University. “Suicide is hard to predict even in the absence of a crisis of Biblical proportions,” Case said.

This week, the Air Force Academy in Colorado Springs, Colorado, relaxed its strict social isolation policies after the apparent suicides of two cadet seniors in late March, The Gazette, a Colorado Springs newspaper, reported. While juniors, sophomores and freshmen had been sent home, the college seniors were kept isolated in dorms, and some had complained of a prison-like setting. Now, the seniors will be able to leave campus for drive-thru food and congregate in small groups per state guidelines.

Public Health Crippled

Local health departments run programs that treat chronic diseases such as diabetes. They also help prevent childhood lead poisoning and stem the spread of the flu, tuberculosis and rabies. A severe loss of property and sales tax revenue following a wave of business failures will likely cripple these health departments, said Adriane Casalotti, chief of government affairs with the National Association of County and City Health Officials, a nonprofit focused on public health.

After the 2008 recession, local health departments in the U.S. lost 23,000 positions as more than half experienced budget cuts. While it’s become popular to warn against placing economic concerns over health, Casalotti said that, on the front lines of public health, the two are inexorably linked. “What are you going to do when you have no tax base to pull from?” she asked.

Carol Moehrle, director of a public health department that serves five counties in northern Idaho, said her office lost about 40 of its 90 employees amid the last recession. The department had to cut a family planning program that provided birth control to women below the poverty line and a program that tested for and treated sexually transmitted diseases. She worries a depression will cause more harm.

“I honestly don’t think we could be much leaner and still be viable, which is a scary thing to think about,” Moehrle said.

LONG TERM CONSEQUENCES

Job-loss Mortality

Rises in unemployment during large recessions can set in motion a domino effect of reduced income, additional stress and unhealthy lifestyles. Those setbacks in income and health often mean people die earlier, said Till von Wachter, a University of California Los Angeles professor who researches the impact of job loss. Von Wachter said his research of past surges in unemployment suggests displaced workers could lose, on average, a year and a half of lifespan. If the jobless rate rises to 20%, this could translate into 48 million years of lost human life.

Von Wachter cites measures he believes could mitigate the effects of unemployment. The Coronavirus Aid, Relief, and Economic Security Act approved by the White House last week includes emergency loans to businesses and a short-time compensation program that could encourage employers to keep employees on the payroll.

Young People Suffer

Young adults entering the job market during the coronavirus suppression may pay an especially high price over the long term.

First-time job hunters seeking work during periods of high unemployment live shorter and unhealthier lives, research shows. An extended freeze of the economy could shorten the lifespan of 6.4 million Americans entering the job market by an average of about two years, said Hannes Schwandt, a health economics researcher at Northwestern University, who conducted the study with von Wachter. This would be 12.8 million years of life lost.

Thousands of college graduates will enter a job market at a time global business is frozen. Jason Gustave, a senior at William Paterson University in New Jersey who will be the first in his family to graduate from college, had a job in physical therapy lined up. Now his licensure exam is postponed and the earliest he could start work is September.

“It all depends on where the economy goes,” he said. “Is there a position still available?”

WHAT COMES NEXT

In the weeks ahead, a clearer picture of the disease’s devastation will come into focus, and governments and health specialists will base their fatality estimates on a stronger factual grounding.

As they do, some public health experts say, the government should weigh the costs of the suppression measures taken and consider recalibrating, if necessary.

Dr. Jay Bhattacharya, who researches health policy at Stanford University, said he worries governments worldwide have not yet fully considered the long term health impacts of the impending economic calamity. The coronavirus can kill, he said, but a global depression will, as well. Bhattacharya is among those urging government leaders to carefully consider the complete shutdown of businesses and schools.

“Depressions are deadly for people, poor people especially,” he said.

(Reporting in New York by M.B. Pell and Benjamin Lesser. Data editing by Janet Roberts. Editing by Ronnie Greene)