Tag Archives: Pandemic

Pent-up demand, shortages fuel U.S. inflation

By Lucia Mutikani

WASHINGTON (Reuters) – U.S. consumer prices surged in April, with a measure of underlying inflation blowing past the Federal Reserve’s 2% target and posting its largest annual gain since 1992, because of pent-up demand and supply constraints as the economy reopens.

The strong inflation readings reported by the Commerce Department on Friday had been widely anticipated as the pandemic’s grip eases, thanks to vaccinations, and will have no impact on monetary policy. Fed Chair Jerome Powell has repeatedly stated that higher inflation will be transitory.

The U.S. central bank slashed its benchmark overnight interest rate to near zero last year and is pumping money into the economy through monthly bond purchases. It has signaled it could tolerate higher inflation for some time to offset years in which inflation was lodged below its target, a flexible average.

The supply constraints largely reflect a shift in demand towards goods and away from services during the pandemic. A reversal is underway, with Americans flying to vacation destinations and staying at hotels among other activities. Year-on-year inflation is also accelerating as last spring’s weak readings drop from the calculation.

“Many goods are in short supply amid very strong demand and supply chain disruptions, and some services prices are up sharply as consumers start to go out again,” said Gus Faucher, chief economist at PNC Financial in Pittsburgh, Pennsylvania. “Shortages of labor in some industries are also contributing to higher prices. But many of these factors will prove transitory, and inflation will slow in the second half of 2021.”

Consumer prices as measured by the personal consumption expenditures (PCE) price index, excluding the volatile food and energy components, increased 0.7% last month amid strong gains in both goods and services. That was the biggest rise in the so-called core PCE price index since October 2001 and followed a 0.4% gain in March.

In the 12 months through April, the core PCE price index vaulted 3.1%, the most since July 1992, after rising 1.9% in March. Economists polled by Reuters had forecast the core PCE price index rising 0.6% in April and surging 2.9% year-on-year.

The core PCE price index is the Fed’s preferred inflation gauge.

Stocks on Wall Street were trading higher, though gains were capped by the rising price pressures. The dollar rose against a basket of currencies. U.S. Treasury prices were higher.

“Inflation is up, but real yields are still low,” said Jamie Cox, managing partner at Harris Financial Group in Richmond, Virginia. “This is basically the transitory sweet spot.”

INCOME PLUNGES

Some economists are not convinced that higher inflation will be temporary.

A survey from the University of Michigan on Friday showed consumers’ one-year inflation expectations shot up to 4.6% in May from 3.4% in April, hurting household sentiment. Their five-year inflation expectations rose to 3.0% from 2.7% last month.

“Concerns about the future can cause households to become more conservative in their spending,” said Joel Naroff, chief economist at Naroff Economics in Holland, Pennsylvania. “The Fed is guessing that the rise in inflation will be temporary, and it better be correct.”

Though consumer spending moderated last month as the boost to incomes from stimulus checks faded, households have accumulated at least $2.3 trillion in excess savings during the pandemic, which should underpin demand. Wages are also rising as companies seek to attract labor to increase production.

Generous unemployment benefits funded by the government, problems with child care and fears of contracting the virus, even with vaccines widely accessible, as well as pandemic-related retirements have left companies scrambling for labor.

That is despite nearly 10 million Americans being officially unemployed. Consumer spending, which accounts for more than two-thirds of U.S. economic activity, rose 0.5% last month. Data for March was revised higher to show spending surging 4.7% instead of 4.2% as previously reported.

The rise in spending was in line with expectations. Spending was held back by a 0.6% drop in outlays on goods. Though purchases of long-lasting goods such as motor vehicles rose 0.5%, spending on nondurable goods tumbled 1.3%. Outlays on services increased 1.1%, led by spending on recreation, hotel accommodation and at restaurants.

When adjusted for inflation, consumer spending slipped 0.1% after jumping 4.1% in March. Despite last month’s dip in the so-called real consumer spending, March’s solid increase put consumption on a higher growth trajectory in the second quarter.

Personal income plunged 13.1% after surging 20.9% in March. With spending exceeding income, the saving rate dropped to a still-high 14.9% from 27.7% in March. Wages increased 1.0% for a second straight month.

Consumer spending powered ahead at a 11.3% annualized rate in the first quarter, contributing to the economy’s 6.4% growth pace. Most economists expect double-digit growth this quarter, which would position the economy to achieve growth of at least 7% this year, which would be the fastest since 1984. The economy contracted 3.5% in 2020, its worst performance in 74 years.

Growth prospects for the second quarter were bolstered by another report from the Commerce Department showing the goods trade deficit narrowed 7.3% to $85.2 billion in April, with exports rising and imports declining.

But inventory at retailers fell 1.6%, pulled down by a 7.0% plunge in automobile stocks as the sector struggles with a global semiconductor shortage.

(Reporting by Lucia Mutikani; Editing by Andrea Ricci and Chizu Nomiyama)

Soaring international prices aggravate Cuban food crisis

By Marc Frank

HAVANA (Reuters) – Soaring international food and shipping prices and low domestic production are further squeezing import-dependent Cuba’s ability to feed its people.

Cuba traditionally imports by sea around 70% of the food it consumes, but tough U.S. sanctions and the pandemic, which has gutted tourism, have cut deeply into foreign exchange earnings.

For more than a year Cubans have endured long waiting lines and steep price rises in their search for everything from milk, butter, chicken and beans to rice, pasta and cooking oil. They have scavenged for scant produce at the market and collected dwindling World War II-style food rations.

This month the Communist-run government announced flour availability would be cut by 30% through July.

Diorgys Hernandez, general director of the food processing ministry, said when he announced the wheat shortage that “the financial costs involved in wheat shipments to the country” were partly to blame.

That was bad news for consumers who had been buying more bread to make up for having less rice, pasta and root vegetables at the dinner table.

“People eat a lot of bread and there is concern there is going to be a shortage of bread because that is what people eat the most,” Havana pensioner and cancer survivor Clara Diaz Delgado said as she waited in a food line.

Cuba does not grow wheat due to its subtropical climate. The price of the commodity was $280 per tonne in April, compared with $220 a year earlier.

The government has also said the sugar harvest was short of the planned 1.2 million tonnes by more than 30%, coming in at less than a million tonnes for the first time in more than a century.

Cuba will have trouble making up for a shortage of domestically produced sugar as international prices are around 70% higher than a year ago.

COST OF SHIPPING

Adding to the pain, the cost of international container shipping is up as much as 50% over the last year and bulk freight more.

The U.N. Food and Agriculture Organization reported its international food price index was up 30.8% through April compared with the same month last year, and the highest since May 2014.

The Cuban state has a monopoly on foreign trade and purchases around 15% of the food it imports from the United States for cash under a 2000 exception to the trade embargo.

John Kavulich, president of the U.S.-Cuba Trade and Economic Council, which follows the trade, said sales fell 36.6% last year to $163.4 million, compared with 2019. They recovered in the first quarter, reaching $69.6 million, though that represented less food due to higher prices.

Chicken, Cuba’s most important U.S. import, is badly affected. A U.S. businessman who sells chicken to Cuba said he shipped drumsticks at 24 cents a pound in January and 48 cents in April. He did not wish to be named.

“Resuming global demand, increased prices for product inputs and labor shortages suggest that commodity prices will not decrease soon,” Kavulich said.

The economy declined 11% last year and according to local economists contracted further during the first trimester of 2021 as a surge in the new coronavirus kept tourism shuttered and much of the country partially locked-down.

The government reported that foreign exchange earnings were just 55% of planned levels last year, while imports fell between 30% and 40%.

Incoming container traffic was down 20% through April, compared with last year, according to a source with access to the data, who requested anonymity.

The government has not published statistics for the notoriously inefficient and rustic agricultural sector since 2019 but scattered provincial and other reports on specific crops and livestock indicate substantial declines for rice, beans, pork, dairy and other Cuban fare.

This was confirmed by a local expert who requested anonymity and said output was down by double digits due to a lack of fuel and imported fertilizer and pesticides.

(Reporting by Marc Frank; additional reporting by Reuters TV and Nelson Acosta; editing by Estelle Shirbon)

Biden to send 20 million doses of U.S.-authorized vaccines abroad for first time

By Steve Holland

WASHINGTON (Reuters) -President Joe Biden will send at least 20 million more COVID-19 vaccine doses abroad by the end of June, marking the first time the United States is sharing vaccines authorized for domestic use.

The move marks a notable pivot from the White House as the administration seeks to use the country’s vaccine supply as a diplomatic tool with the pandemic outlook brightening at home.

Biden announced on Monday that his administration will send doses of the Pfizer Inc/BioNTech SE, Moderna Inc and Johnson & Johnson vaccines, on top of 60 million AstraZeneca Plc doses he had already planned to give to other countries.

Unlike the others, AstraZeneca’s shot is not yet authorized for use in the United States.

“Just as in World War Two America was the arsenal of democracy, in the battle against COVID-19 pandemic our nation is going to be the arsenal of vaccines,” Biden said.

The president has been under pressure to share vaccines to help contain worsening epidemics from India to Brazil, where health experts fear new, more contagious coronavirus variants could undermine the effectiveness of available shots.

Biden noted that no other country will send more vaccines abroad than the United States. So far, the United Stages has sent a few million AstraZeneca doses to Canada and Mexico.

“We want to lead the world with our values with this demonstration of our innovation, ingenuity, and the fundamental decency of American people,” Biden said.

The White House has not provided any details about what countries will receive the shots. Biden said that Jeff Zients, who heads the U.S. vaccine efforts, will now also lead the global vaccine push.

The United States has administered more than 272 million COVID-19 vaccine doses and distributed more than 340 million, according to federal data updated on Monday morning.

With more and more Americans vaccinated, U.S. deaths from COVID-19 last week fell to their lowest in nearly 14 months, while the number of new cases declined for a fifth consecutive week, according to a Reuters analysis of state and county data.

Biden warned that those who do not get vaccinated “will end up paying the price” as he lamented that “we’re still losing too many Americans” despite the significant progress.

(Reporting By Steve Holland, Carl O’Donnell and Jarrett Renshaw; Writing by Jarrett Renshaw; Editing by Trevor Hunnicutt and Bill Berkrot)

Brazil’s Christ the Redeemer statue lights up for vaccine equality

(Reuters) – The world’s most famous statue of Jesus Christ was lit up in Rio de Janeiro to promote vaccine equality as Brazil and developing countries struggle to protect residents from COVID-19.

The message “Vaccine saves, United for vaccines” was projected on Saturday onto the 98-foot (30-meter) statue by Unidos Pela Vacina (United by the Vaccine), in partnership with the Cristo Redentor Sanctuary and the Ogilvy Brazil advertising agency.

In January, two healthcare workers received the first shots of coronavirus vaccines at the foot of the statue as Brazil kicked off its vaccination campaign.

Since then, 17% of residents have received at least one dose of vaccine and 8% have been fully vaccinated.

The country ranks 30th in the world based on first doses given and far behind the 59% in Israel and 47% in the United States, according to a Reuters analysis.

New cases of COVID-19 are once again rising in Brazil and infections are at 82% of the peak the country hit in March, according to a Reuters analysis.

In May 2020, the statue was lit up to call for wearing masks to slow the progress of the pandemic. Brazil has reported the third-highest number of cases in the world and the second-highest number of deaths, with over 435,000 lives lost.

(Writing by Lisa Shumaker; Editing by Rosalba O’Brien)

Mass shooting insurance in high demand as U.S. emerges from lockdown

By Noor Zainab Hussain and Carolyn Cohn

(Reuters) – As normality filters back into American lives after a year of lockdowns, hospitals and other institutions are busy making provisions for one aspect of that old normal they would rather consign to the past – mass shootings.

Last year was the least deadly for U.S. mass shootings in a decade, a Reuters tally shows.

But spring has brought a resurgence and insurers are reporting a jump in demand for protection against such events, at a time when the pent-up traumas and frustrations of living through a pandemic are also re-entering the public domain.

Client inquiries for what the industry calls active shooter policies have risen 50% year on year in the past six weeks, said Tarique Nageer, Terrorism Placement Advisory Leader at Marsh, the world’s biggest insurance broker.

Such policies gained popularity in recent years following a spate of school shootings. They typically cover victim lawsuits, building repairs, legal fees, medical expenses and trauma counseling.

This year, however, even though fatal shootings in U.S. hospitals are comparatively rare and mass ones one-in-a-decade events, Nageer says demand has been particularly strong from the healthcare sector.

That finding is supported by Tim Davies, head of crisis management at Canopius, a Lloyd’s of London global specialty insurer.

Most hospitals are open to the public and their emergency wards, where patients with COVID-19 and other severe illness and injuries get treatment, can become triggers for potentially volatile behavior.

“Those are places where you could see people who are disgruntled that members of their family might have died and didn’t get a vaccine or weren’t treated properly,” Davies said.

Such concerns have led to an about 25% to 50% hike in active shooter insurance prices compared to last year for healthcare firms, while overall rates have remained steady, he said.

Chris Kirby, head of political violence cover at insurer Optio, said active shooter policy rates had risen by as much as 50% for some clients, without specifying any industry sector.

SCHOOLS AND CHURCHES TOO

Brokers say that, besides hospitals, retail establishments, schools, universities, restaurants and places of worship are other prominent clients, buying cover ranging from $1 million to as high as $75 million.

The United States witnessed 200 mass shootings in the first 132 days of this year, according to a report by the Gun Violence Archive, a non-profit research group that defines them as any event involving the shooting of four or more people other than the assailant.

Hart Brown, senior vice president of R3 Continuum, a crisis management consultancy that helps clients deal with the aftermaths of about 800 shootings a year, said violence had migrated from public spaces into homes in 2020.

But this year, demand for R3 Continuum’s services is up 15% to 20%, he says, with the gradual reopening of offices having brought violence back to the workplace – compounded by pandemic-induced stresses and economic insecurities often endured in isolation.

“The environment that was created by the pandemic, with the social distancing, the lockdown, and so forth and the compounding stressors is really what’s driving much of the violence that we’re seeing right now,” he said.

A survey by the Kaiser Family Foundation backs up that assessment, showing 41% of U.S. adults reporting symptoms of anxiety or depressive disorders in January, compared with 11% in the first half of 2019.

(Reporting by Noor Zainab Hussain in Bengaluru and Carolyn Cohn in London; Editing by Tomasz Janowski and John Stonestreet)

‘A hell out here’: COVID-19 ravages rural India

By Danish Siddiqui and Sanjeev Miglani

NEW DELHI (Reuters) -India’s coronavirus death toll crossed 250,000 on Wednesday in the deadliest 24 hours since the pandemic began, as the disease rampaged through the countryside, leaving families to weep over the dead in rural hospitals or camp in wards to tend the sick.

Boosted by highly infectious variants, the second wave erupted in February to inundate hospitals and medical staff, as well as crematoriums and mortuaries. Experts still cannot say for sure when the figures will peak.

Indian state leaders clamored for vaccines to stop the second wave and the devastation that it has wrought, urging Prime Minister Narendra Modi to stop exporting vaccines, ramp up production and help them procure urgent supplies from overseas.

“People will die in the same way in the third and fourth waves as they have this time” without more vaccines, Delhi’s Deputy Chief Minister Manish Sisodia told reporters.

Deaths grew by a record 4,205 while infections rose 348,421 in the 24 hours to Wednesday, taking the tally past 23 million, health ministry data showed. Experts believe the actual numbers could be five to 10 times higher.

Funeral pyres have blazed in city parking lots, and bodies have washed up on the banks of the holy river Ganges, immersed by relatives whose villages were stripped bare of the wood needed for cremations.

Lacking beds, drugs and oxygen, many hospitals in the world’s second-most populous nation have been forced to turn away droves of sufferers.

“We seem to be plateauing around 400,000 cases a day,” the Indian Express newspaper quoted virologist Shahid Jameel as saying. “It is still too early to say whether we have reached the peak.”

‘HERE AND NOW’

India is using the AstraZeneca vaccine made at the Serum Institute in the western city of Pune and Covaxin by Bharat Biotech but has fully vaccinated barely 2.5% of the population.

Indians need vaccines “here and now”, the chief minister of West Bengal state, Mamata Banerjee, said in a letter to Modi.

The country accounts for half of COVID-19 cases and 30% of deaths worldwide, the World Health Organization said in its latest weekly report.

The full impact of the B.1.617 variant found in India, which the WHO has designated as being of global concern, is not yet clear, it added.

The variant has been detected in six countries in the Americas, the Pan American Health Organization said, adding that it was worried that it was highly transmissible.

Britain, which has also detected the variant, is looking at all possible solutions to tackle a surge of related cases, including in the northern English town of Bolton, Prime Minister Boris Johnson told parliament.

RURAL SPREAD

Daily infections are shooting up in the Indian countryside in comparison to big towns, where they have slowed after last month’s surge, experts say.

More than half the cases this week in the western state of Maharashtra were in rural areas, up from a third a month ago. That share is nearly two-thirds in the most populous, and mainly rural, state of Uttar Pradesh, government data showed.

Television showed images of people weeping over the bodies of loved ones in ramshackle rural hospitals while others camped in wards tending to the sick.

A pregnant woman was taking care of her husband who had breathing difficulties in a hospital in Bhagalpur in the eastern state of Bihar, which is seeing a case surge its health system could barely have handled at the best of times.

“There is no doctor here, she sleeps the whole night here, taking care of her husband,” the woman’s brother told India Today television.

In a corridor outside, two sons were wailing over the body of their father, saying repeatedly that he could have been saved if only he had been given a bed in an intensive care unit.

At the general hospital in Bijnor, a town in northern Uttar Pradesh, a woman lay in a cot next to a garbage can and medical waste.

“How can someone get treated if the situation is like this?” asked her son, Sudesh Tyagi. “It is a hell out here.”

(Reporting by Anuron Kumar Mitra and Manas Mishra in Bengaluru, Shilpa Jamkhandikar and Aishwarya Nair in Mumbai, Tanvi Mehta in New Delhi, Subrata Nagchoudhary in Kolkata and Stephanie Nebehay in Geneva; Writing by Raju Gopalakrishnan; Editing by Simon Cameron-Moore, Clarence Fernandez, Mark Heinrich and Giles Elgood)

Latin America’s pandemic tragedy as death toll nears one million

By Anthony Marina

PISCO, Peru (Reuters) -Hellen Ñañez has suffered enough tragedy for a lifetime. The Peruvian 28-year-old mother has mourned the death of 13 close relatives since the pandemic struck last year: uncles, cousins, a grandfather. Now her dad is fighting for his life.

On a recent day in a dusty cemetery in the Pacific port town of Pisco, Ñañez visited the graves of relatives lost to COVID-19.

“The truth is, I don’t have any more tears,” said Ñañez, who dropped out of studying psychology to work and help pay her father’s medical bills. “This is taking away our family. It’s taking away our dreams, our tranquility and stability.”

Ñañez’s story is a grim reflection of the tragedy unfolding in Latin America, a resource-rich but politically volatile region of some 650 million people stretching from Mexico to the near-Antarctic southern tips of Chile and Argentina.

The region has recorded 958,023 coronavirus-related fatalities, a Reuters tally shows, some 28% of the global death toll. It is set to hit the 1 million mark this month, which will make it the second region to do so after Europe.

But unlike wealthier Europe and North America, Latin American nations have lacked the financial firepower to keep people from sliding deep into poverty; underfunded healthcare systems have strained and inoculation programs have stalled.

Regional leaders from Brazil’s Jair Bolsonaro to Argentina’s Alberto Fernandez and Mexico’s Andrés Manuel López Obrador have come under fire for their handling of the pandemic, while a string of health ministers have been fired.

“We Peruvians are dying, Mr. President. We are dying every day,” Miriam Mota, a relative of a coronavirus patient in Lima told Reuters, beseeching the country’s leader, Francisco Sagasti, to do more to help bring the crisis under control.

“There are no vaccines. There are no intensive care beds. There are no medicines. Please, for humanity’s sake, help us!”

Peru has officially confirmed 1.85 million COVID-19 cases and some 64,000 deaths, but that toll could be three times as high in reality, experts say. The country’s national death register has linked 171,000 deaths to the virus.

‘PEOPLE ARE FED UP’

Latin America’s crisis has been driven by regional juggernaut Brazil, which has recorded the most deaths globally after the United States and where right-wing President Bolsonaro has long railed against lockdown measures and backed unproven cures.

The emergence of virus mutations in the country, including the more transmissible P1 variant, has been linked to the severity of Brazil’s outbreak. It has also driven surges in infections in neighboring countries, including Uruguay and Bolivia.

Now there are signs that the pandemic, which has torn through regional economies and driven a spike in poverty, will have a longer-term ripple effect, stoking unrest, rattling industries and driving voters at the polls.

Colombia has been roiled by deadly protests over a now-shelved tax reform and poverty; Chile is moving towards a sharp tax hike on copper miners; Peru’s polarized presidential election race is being led by a socialist teacher who is a political outsider.

“People are fed up and obviously tired of everything that has happened lately,” Paula Velez said in front of a burned-out police station in Colombian capital Bogota, set on fire in the protests.

‘I DON’T WANT TO LOSE HIM’

Public health experts say Latin America has suffered an outsized hit from the pandemic, both in terms of health and growth, rattling fragile economies with high debt levels, steep inequality and where many work in less secure informal jobs.

Unlike North America, Europe or Asia, the region has also lacked the high-tech infrastructure to rapidly develop or manufacture vaccines.

A deal to produce the Oxford University-AstraZeneca Plc COVID-19 vaccine by firms in Argentina and Mexico has been stalled by manufacturing hold-ups, and many Latin American countries are reliant on insufficient supplies of Chinese and Russian vaccines.

A cottage industry has developed for wealthier Latin Americans to travel to Florida and Texas to get their shots. But for the less affluent, that is not an option.

“I have been looking for work for a year and a half and I can’t wait for my vaccine,” said Rio de Janeiro resident Marco Antonio Pinto, who like others in the city was disappointed last week when an immunization center quickly ran out of vaccines.

“They are playing with the people, thinking that we are animals. We aren’t animals: we are human beings. We pay taxes. We pay for everything,” he said.

Back in Peru, Ñañez is now fighting to save the life of her father, who has been in the intensive care unit of a hospital for more than two weeks, receiving medicine to reduce the ravages of the disease and on a mechanical respirator.

Ñañez, who has a two-year-old child, has turned to making soap at home and selling it on the street or in shops in Pisco, a coastal town set amid arid desert landscapes.

She said her bank loans had run dry and the family had incurred enormous debts of some 100,000 soles ($26,500) to buy medicines, medical oxygen – and funeral expenses. While hope was low, she was determined to battle for her dad.

“I’m not going to lose him. I don’t want to lose anyone else. My dad can’t leave me,” Ñañez said, sobbing, outside the hospital where she has come to check on the health of her father, who is in a coma.

“I have been standing here for 17 days in front of the hospital and I know that he is going to make it. I do not think that life can be so unfair if it has taken so much from me and now it also wants to take away my father.”

(Reporting by Anthony Marina in Pisco; Additional reporting by by Herbert Villarraga and Javier Andres Rojas in Bogota, Enrique Mandujano in Lima and Sergio Queiroz in Rio de Janeiro; Writing by Marco Aquino and Adam Jourdan; Editing by Adam Jourdan and Rosalba O’Brien)

Pandemic’s labor reshuffle likely just starting for U.S. workers

By Howard Schneider

WASHINGTON (Reuters) – If the coronavirus pandemic produced its own brand of anxiety for American workers trying to stay healthy while balancing job and family demands, the coming return to “normal” will pose a new set of challenges.

Like whether to first try to claw back all the free hours of labor donated to companies during the crisis, or shift to a “future-proof” occupation to insure against the next one, or figure out how to compete with the robots being deployed more widely because of the pandemic.

The workforce fallout from the coronavirus outbreak, in other words, may have only just begun.

Some industries are recovering faster than others, with the worst-hit sectors continuing to lag. Even though U.S. gross domestic product is near its pre-pandemic peak, jobs are rebounding more slowly, suggesting a potentially prolonged period of adaptation ahead for both workers and companies.

Payroll processor ADP set a baseline of sorts in a recent survey of more than 32,000 workers globally that showed just how unsettled the landscape is as the pandemic, at least in the major developed economies, reaches its endgame.

Over the past year, for example, workers often said they benefited from the flexibility of working from home and wanted it to continue. Companies and their employees have both reported improved productivity.

But it turns out some of that “flexibility” was consumed by a substantial increase in unpaid overtime, according to the ADP survey, which was conducted last fall. That means the higher productivity may be something of a mirage, not the outcome of better work-life balance but value donated to firms by workers worried about staying employed. Workers globally reported unpaid hours rose about 25%, from 7.2 to 9.3 per week. In the United States, it more than doubled from 4.1 to 9.

SPREAD OF AUTOMATION

People, and women in particular, “may be returning to a corporate landscape that expects more hours worked with less compensation,” said Nela Richardson, ADP’s chief economist. “That’s a post-COVID burden,” which could potentially frustrate hopes to reemploy the roughly 2 million U.S. women still absent from the labor force compared with February 2020.

More than three-fourths of workers globally said job insecurity had prompted them to work more during the week or on their days off, and take on new tasks including ones they were not comfortable performing. Richardson said those results mean companies and their workers will need to find a new post-pandemic relationship. Many workers took on new duties, for example, but often without a raise or extra training, an outcome particularly true for women.

The ADP survey found 15% of respondents said they were planning to shift occupations altogether to something more “future-proof,” a finding with implications for how companies and workers match up if large shares of people in, say, the restaurant sector decide they want to do something else.

The U.S. labor market’s weak performance in April – it added only about a quarter of the jobs that had been expected by a Reuters poll of economists – may be related at least in part to people’s reluctance to return to jobs they no longer see as rewarding or worth the health risk.

Defining what future-proof means, however, is challenging as the pandemic shifts consumer behavior in potentially permanent ways – the rush to online shopping and a preference for buying goods or participating largely in “distanced” activities – and automation spreads deeper into the service sector.

The Association for Advancing Automation last week reported a nearly 20% increase in purchases of industrial robots in the first three months of 2021 versus 2020, and most went to companies outside the auto sector where they are already prevalent. Orders by consumer companies rose 32%.

The pandemic has motivated hotels, restaurants and other consumer-facing, “high-touch” companies to build social distancing into their business models, possibly resulting in fewer employees than before.

In an analysis last week, Bank of America’s Ethan Harris and Jeseo Park argued that over time people will find jobs nevertheless, just as they have during past technological upheavals.

“While the COVID crisis has likely sped up structural changes in the labor market, these multi-decade changes are much slower than the dynamics of the business cycle,” wrote Harris, the bank’s head of global economics, and Park, a global and U.S. economist. “Over time the labor market will re-invent itself as it has done repeatedly across history.”

The interim can still be tough, and a slow adjustment may mean higher-than-expected unemployment while it plays out.

A recent U.S. Bureau of Labor Statistics study indicated the burden may fall hardest on the same workers most affected by the pandemic recession. If the dislocation is deep, the U.S. economy may have 3 million jobs fewer than it would otherwise by 2029, with many of the losses among waiters, retail clerks and other front-line service occupations.

(Reporting by Howard Schneider; Editing by Dan Burns and Paul Simao)

Poland tightens quarantine rules after cases of Indian COVID-19 variant

WARSAW (Reuters) – People travelling to Poland from Brazil, India and South Africa will have to quarantine, the Polish health minister said on Tuesday, as he announced cases of a COVID-19 variant first detected in India in the Warsaw and Katowice areas.

The outbreaks poses a fresh risk to Poland just as it starts to emerge from a highly damaging third wave of the pandemic.

“In the case of Brazil, India and South Africa, people travelling from these locations will automatically have to quarantine without the possibility of getting an exception due to a test,” Health Minister Adam Niedzielski told a news conference.

The number of infections involving the Indian variant in Poland has now reached 16, including two cases in the family of a Polish diplomat who had returned from India, Niedzielski said.

Poland has so far reported 2,808,052 cases of COVID-19 and 68,133 deaths.

Poland reopened shopping centers on Tuesday, the beginning of a gradual unfreezing of the economy that will see restaurants, hotels and schools reopening at different points in May.

(Reporting by Alan Charlish and Pawel Florkiewicz; Editing by Gareth Jones)

Sticking with remote work? Businesses are betting on it

By Ann Saphir

SAN FRANCISCO (Reuters) – U.S. businesses have been spending more on technology than on bricks and mortar for more than a decade now, but the trend has accelerated during the pandemic, one more sign that working from home is here to stay.

As spending on home-building has risen, spending on nonresidential construction has dropped, with that on commercial, manufacturing and office space slumping to under 15% of total construction outlays in March, Commerce Department data showed Monday.

Business spending on structures fell in the first quarter, data from the Bureau of Economic Analysis showed last week. It was the sixth straight quarterly decline, showcasing one of the few weak spots in the economy as it regains steam amid a receding pandemic.

Meanwhile, spending on technology rose, with investments in software and information processing equipment contributing more than 1 percentage point to the economy’s overall 6.4% annualized rise in economic output in the quarter, the BEA data showed. Technology spending has added to growth in all but two of the past 32 quarters, back to 2013. Spending on structures has pulled GDP downward in 14 of those quarters.

The implications of the shift are broad: the economy emerging from the depths of the pandemic will be more technology-driven and less reliant on in-person transactions, leaving jobs permanently changed and potentially fewer in number.

Accelerated by the pandemic, the divergence between the two types of business spending is here to stay, says Stanford economics professor Nicholas Bloom.

“This is the surge in (work-from-home) which is leading firms to spend heavily on connectivity,” Bloom said.

He and colleagues have been surveying 5,000 U.S. residents monthly, and found that from May to December about half of paid work hours were done from home.

Workers’ own spending to equip their home offices with computer connectivity, desks and other necessities comes to the equivalent of 0.7% of GDP, their surveys found, suggesting the business investment data likely underestimates what’s actually being spent on technology.

Those sunk costs are one reason that on average Americans will work one day a week from home even after the pandemic, up from about one day a month before, Bloom says.

American firms’ reliance on hybrid working should continue to lift business spending on technology for the foreseeable future, said ING chief international economist James Knightley.

Spending on office buildings particularly will likely remain weak at least until the end of the summer, he predicted, when the return of most kids to school should allow more parents to return to work.

Even then, he said, businesses will need to continue to spend more than ever on connectivity and computers to support the remote, or partially remote, workforce.

“I think there’s still a lot more to do there,” he said.

(Reporting by Ann Saphir, Howard Schneider, Dan Burns; Editing by Chizu Nomiyama)