Tag Archives: Pandemic

U.S. Congress in sprint to fund government, approve COVID-19 emergency aid

By Richard Cowan

WASHINGTON (Reuters) – The U.S. Congress will try this week to end months of indecision and infighting over the federal government’s budget priorities and coronavirus aid, with more than $2 trillion in funding from Washington potentially at stake.

Lawmakers, facing a midnight Friday deadline, will scurry to put the finishing touches on a $1.4 trillion spending bill for the fiscal year that began Oct. 1.

At stake are funds for federally run programs ranging from healthcare, homeland security and military readiness to foreign aid, national parks and nutrition programs. They have been operating on temporary funding since October.

Without a deal, the government must begin shutting non-emergency programs and furloughing many workers.

Members of the Republican-run Senate and Democratic-led House of Representatives, who fear negotiations could extend through the Christmas holiday, have a second major task: deciding the contours of a coronavirus aid bill that could approach $1 trillion amid a worsening pandemic that has claimed the lives of nearly 300,000 Americans.

Some moderate lawmakers on Sunday dismissed suggestions that a $908 billion bipartisan coronavirus aid proposal was languishing.

“The plan is alive and well and there’s no way, no way that we are going to leave Washington without taking care of the emergency needs of our people,” Democratic Senator Joe Manchin told Fox News, saying the proposal would be introduced formally on Monday.

A person briefed on the matter said the authors now planned to divide the measure into two separate proposals, which could be voted on separately. One would be a $748 billion proposal including small businesses, the jobless and COVID-19 vaccine distribution.

The other would include major sticking points such as coronavirus-related liability protections for business, which are backed by Republicans, and $160 billion for state and local governments, a Democratic priority.

Lawmakers are hoping to attach the aid to the government funding measure.

Local public health agencies worry that without a deal on either of the two bills, they will not have enough money to carry out a massive COVID-19 vaccination program.

The first shipments of Pfizer Inc’s newly approved vaccine were delivered on Sunday.

WHO WINS AND WHO LOSES?

With the twin goals of stimulating the struggling U.S. economy and financing purchases of medical supplies, Democrats and Republicans in Congress are faced with deciding who should receive new help from Washington – beyond over $3 trillion appropriated last spring – and who should not.

Democrats have been pushing hard for aid to state and local governments to insure against laying off more workers, including police, firefighters and emergency medical personnel.

Senate Majority Leader Mitch McConnell, a Republican, dismissed that on Friday as a “preposterous” federal handout for Democratic-leaning states that he says do not need it.

But even some of McConnell’s own Republicans disagreed.

Senator Lisa Murkowski of Alaska told reporters her state’s revenues had seen a 33 percent decline during the pandemic in an economy heavily dependent on summertime tourism.

“We’re a state that is really, really hurting right now,” Murkowski said on Friday, adding that many others are in the same situation.

The House’s No. 2 Democrat, Steny Hoyer, offered a glimmer of hope that a breakthrough might be possible, telling CNN on Sunday that Democrats “are not going to get everything we want. We think state and local (aid) is important. And if we can get that, we want to get it. But we want to get aid out to the people who are really, really struggling and are at grave risk.”

Congress also is divided over whether to do a second round of direct payments to Americans to help stimulate the economy.

“We have a history now of going to the 11th hour and 59th minute on all of this and it’s very unfortunate. That’s where we are,” lamented Republican Senator Pat Roberts, who is retiring at year’s end.

(Reporting by Richard Cowan; Additional reporting by Susan Cornwell and David Shepardson; Editing by Peter Cooney)

One year on, Wuhan market at epicentre of virus outbreak remains barricaded and empty

By Cate Cadell

WUHAN, China (Reuters) – For over six years, 38-year-old Wuhan restaurant owner Lai Yun started most days the same way – with a trip to the Huanan Seafood Wholesale Market, just ten minutes walk from his house.

“I’d send the kids to school, have breakfast and then walk over to the market. It was very convenient,” he said.

That changed on Dec. 31, 2019, after four cases of a mystery pneumonia were linked to the market and it was shuttered overnight. By the end of the month, the city had begun a grueling 76-day lockdown that came with just hours notice and barred people from leaving their homes.

Almost a year since the outbreak began, COVID-19 has claimed more than 1.5 million lives, and the Wuhan wet market where it was initially detected stands empty even as the city around it has come back to life.

It’s become a symbol of the fierce political and scientific battle raging around the origin of the virus with Beijing continuing to spar with the United States and other countries, accusing them of bias.

A team of World Health Organization experts has yet to visit Wuhan, let alone the market. Health authorities in China and abroad have warned that origin tracing efforts could take years and yield inconclusive results.

In Wuhan, where the stigma of being the first coronavirus epicenter hangs heavy, over a dozen residents and business owners told Reuters they don’t believe the virus began in the city.

“It certainly couldn’t have been Wuhan… surely another person brought it in. Or surely it came from some other product brought from outside. There were just certain conditions for it to appear here,” said a wet market vendor in the city’s center who gave his name as Chen.

In recent months, Chinese diplomats and state media have said they believe the market is not the origin but the victim of the disease, and have thrown support behind theories that the virus potentially originated in another country.

RESTRICTED ACCESS

Experts say the market still plays a role in the investigation and is therefore unlikely to be demolished, though much of that research will rely on samples taken immediately after the outbreak began.

“The first cluster of cases was there, so at least it would be of interest to find out the origin of those and put forward a few hypotheses, like whether it’s more likely from the wild animals or perhaps points to a human super-spreader,” said Jin Dong-Yan, professor of virology at the University of Hong Kong.

Access to the area remains heavily restricted. People who visited before the lockdown remember a bustling building with hundreds of stalls divided into sections for red meat, seafood and vegetables.

Recently, the local government has added leafy green plants and traditional Chinese paintings to the semi-permanent blue barricades encircling the area. Inside, wooden boards line the stalls and windows.

On the second floor above the empty market, shops selling glasses and optometry equipment reopened in June.

This week, a guard at the entrance to the eyewear market took temperatures and warned journalists not to take videos or photos from inside the building.

“Maybe some people have some bad feelings about it, but now it’s just an empty building … who feels anxious about an empty building?” said a shop assistant selling contact lenses, who declined to be named because of the sensitivity of the subject.

While Wuhan hasn’t reported any new locally transmitted cases of COVID-19 since May, for some who relied on the market making ends meet is still a struggle.

Lai, who reopened his Japanese restaurant in June, says the market’s closure and subsequent public panic about the safety of imported seafood has increased the cost of procuring some ingredients five-fold.

“Our goal for the next year is to just survive.”

(Reporting by Cate Cadell; Editing by Edwina Gibbs)

Coronavirus scare on Singapore cruise ship was false alarm, authorities say

By John Geddie and Chen Lin

SINGAPORE (Reuters) – A suspected COVID-19 case aboard a “cruise-to-nowhere” from Singapore which forced the ship to return to dock and nearly 1,700 guests to isolate was a false alarm, the government said on Thursday.

Passengers on Royal Caribbean’s Quantum of the Seas vessel were held in their cabins for more than 16 hours on Wednesday after an 83-year-old man was tested positive for COVID-19 aboard the ship when he sought medical help for diarrhea.

But Singapore’s health ministry said on Thursday the man did not have the virus after three subsequent tests on land came back negative.

While authorities praised the response to the incident, tourism experts said it highlighted testing frailties and the burden that puts on businesses trying to resume operations even in a country that has largely tamed the virus.

“We have to live with less-than-perfect testing kits,” said Michael Chiam, a senior tourism lecturer at Singapore’s Ngee Ann Polytechnic. “This may be costly to businesses.”

The health ministry said close contacts of the guest to would no longer need to quarantine and that it would help review testing processes aboard the ship.

Miami-based Royal Caribbean, which had just started offering the trips after it halted global operations in March due to the pandemic, said in a statement it welcomed the news and that it would work to “refine” its protocols.

The cruises-to-nowhere were part of Singapore’s efforts to revive a tourism industry which has been battered by the pandemic as borders around the world have closed.

Singapore’s tourism board chief Keith Tan said the cruise incident was a learning experience but also a validation of precautions like pre-departure testing and requirements that guests carry an electronic contact tracing device at all times.

The mishap will be closely watched by other firms relying on testing like event venues and airlines, said Sherri Kimes of the National University of Singapore’s Business School.

The city-state, which has reported only a handful of cases in recent weeks, is rolling out rapid antigen tests for large events such as weddings and business conferences.

(Editing by Angus MacSwan)

U.S. airlines say vaccine cargo could help restart passenger flights

By Tracy Rucinski

CHICAGO (Reuters) – Major U.S. airlines are preparing for a massive airlift of COVID-19 vaccines that will not only boost their cargo business, but help bring back passenger flights that shut down during the pandemic, executives told Reuters.

Travel demand is hovering around 40% of 2019 levels and will not return to normal until vaccines are widely distributed. In the meantime, the vaccine transportation itself could help airlines bring back parked jets and start reopening routes.

“I think we’re going to reach a point fairly soon as multiple vaccines are approved that most of the planes that are operating are going to be carrying vaccines,” said Roger Samways, vice president of Cargo Sales at American Airlines.

“We’re really looking at what could end up being the largest single airlift in commercial aviation history,” he said.

The vaccine developed by Pfizer Inc. could receive U.S. approval as soon as this week and may soon be followed by another from Moderna Inc.

The size and range of airline fleets and networks are key, as well as the ability to manage vaccines that require ultra-cold storage and the ability to quickly load them onto aircraft and unload them onto trucks for final delivery.

Commercial planes normally carry around half the world’s air cargo in their bellies, with the remainder hauled in dedicated freighter planes. But a drastic reduction in passenger routes during the pandemic has slashed overall air capacity in the market.

Airlines began operating cargo-only charter flights with essential goods early in the pandemic that have become the main driver of an international business that has otherwise collapsed.

As American prepares to fly vaccines to some 150 locations across 46 countries where it already ships pharmaceuticals, it is hoping to put passengers on some of those flights too, Samways said.

American already turned cargo charters to places like Sao Paolo, Santiago and London into revenue passenger flights earlier this year that would not have been viable given the overall sharp downturn in demand.

United Airlines said cargo flights also helped expand its passenger network over the summer following weekly meetings between cargo and network planning teams to pinpoint demand.

“We continue to have those meetings on a weekly basis,” cargo chief Christopher Busch said.

BUSINESS FOR ALL

To shorten the run time for vaccines, United is now parking planes right behind its cargo facility in Chicago, rather than at passenger gates, Busch said, and has added refrigerated rooms to meet some of the vaccine requirements.

American said vaccines will be the last to load and the first to come off its planes, and the vaccines will not sit at an airport for more than two hours on either end. The airline has a 25,000-square-foot cargo facility with three temperature zones in Philadelphia, near 14 of the largest 20 pharmaceutical companies.

Delta Air Lines Inc has a 40,000-square-foot, temperature-controlled facility in Atlanta, where it is running a cargo control tower day and night to prepare for vaccine distribution support.

Traditionally, cargo contracts are a triangular arrangement in which manufacturers like Pfizer Inc pay forward freighters like FedEx Corp or United Parcel Service, which in turn pay airlines for any distribution they cannot handle.

For the vaccine rollout, airlines said they expect some direct shipper arrangements with the manufacturers themselves, and enough business for any airline with the capacity and infrastructure to handle it.

“In layman’s terms, there’s more than enough business to go around,” said Delta’s cargo chief, Robert Walpole.

Research firm Cowen is estimating $400 million in vaccine cargo revenue in 2021. While the share for airlines is unclear, it will be a welcome boost for a loss-making industry, though not enough to put it in the black without a recovery in passenger traffic.

“We’re still a long, long way away from reaching a financial situation as an industry that we’ll be comfortable with,” Samways said.

(Reporting by Tracy Rucinski in Chicago; Editing by Matthew Lewis)

Trump and 17 states back Texas bid at Supreme Court

By Jan Wolfe and Andrea Shalal

WASHINGTON (Reuters) – President Donald Trump on Wednesday asked the U.S. Supreme Court to let him join a lawsuit by Texas seeking to throw out the voting results in four states, litigation that also drew support from 17 other states.

In a separate brief, lawyers for 17 states led by Missouri’s Republican Attorney General Eric Schmitt also urged the nine justices to hear the Texas lawsuit.

Trump on Wednesday vowed to intervene in the lawsuit though he did not provide details on the nature of the intervention including whether it would be by presidential campaign or the U.S. Justice Department.

Writing on Twitter, Trump said, “We will be INTERVENING in the Texas (plus many other states) case. This is the big one. Our Country needs a victory!”

The lawsuit, announced on Tuesday by the attorney general of Texas, Ken Paxton, targeted four states.

In addition to Missouri, the states joining Texas were: Alabama, Arkansas, Florida, Indiana, Kansas, Louisiana, Mississippi, Montana, Nebraska, North Dakota, Oklahoma, South Carolina, South Dakota, Tennessee, Utah and West Virginia.

The lawsuit was filed directly with the Supreme Court rather than with a lower court, as is permitted for certain litigation between states.

The Texas suit argued that changes made by the four states to voting procedures amid the coronavirus pandemic to expand mail-in voting were unlawful. Texas asked the Supreme Court to immediately block the four states from using the voting results to appoint presidential electors to the Electoral College.

Texas also asked the Supreme Court to delay the Dec. 14 date for Electoral College votes to be formally cast, a date set by law in 1887.

(Reporting by Andrea Shalal and Jan Wolfe; Editing by Tim Ahmann and Will Dunham)

Agreement elusive on U.S. coronavirus relief as bipartisan group releases plan details

By Susan Cornwell

WASHINGTON (Reuters) – U.S. Senate Majority Leader Mitch McConnell said on Wednesday that lawmakers were still striving for agreement on COVID-19 aid, as a bipartisan group released details of their proposal and the U.S. House of Representatives prepared to vote on a one-week funding bill to provide more time for a deal.

With agreement elusive, the House was poised to vote on Wednesday afternoon on a measure to prevent federal programs from running out of money on Friday at midnight (0500 GMT on Saturday) by extending current funding levels until Dec. 18.

The move gives Congress seven more days to enact a broader, $1.4 trillion “omnibus” spending measure, to which congressional leaders hope to attach the long-awaited COVID-19 relief package – if they can reach a deal on both fronts.

The bipartisan group of lawmakers from the House and Senate released a summary of their $908 billion plan aimed at breaking the months-long stalemate between the parties over more coronavirus relief.

The proposal would extend for 16 weeks pandemic-related unemployment insurance programs due to expire at the end of the month. The measure would also provide an extra $300 a week in supplemental unemployment benefits for 16 weeks, from the end of December into April.

“We are literally on the five-yard line now,” said Democratic Representative Josh Gottheimer, a member of the bipartisan group. “We have no choice but to get this done.”

The summary said there was agreement in principle on two thorny issues: liability protections for businesses desired by Republicans and $160 billion in aid to state and local governments sought by Democrats. Lawmakers said they were still working on details.

On Tuesday evening, Treasury Secretary Steven Mnuchin weighed in for the first time since before the November election, saying he had presented a $916 billion relief proposal to Pelosi that includes money for state and local governments and liability protections for businesses.

But Pelosi and Schumer said they viewed the bipartisan negotiations as the best hope for COVID-19 relief.

Other Democrats also reacted cautiously to Mnuchin’s proposal, asking why it lacked supplementary benefits for the unemployed while including direct checks of $600 for all individuals.

“How can anybody say that I’m gonna send another check to people that already have a paycheck and job, and not send anything to the unemployed? It doesn’t make any sense to me at all,” said Senator Joe Manchin, a member of the bipartisan group, told reporters.

After the vote Wednesday on the stopgap funding measure in the Democratic-run House, the Republican-led Senate is expected to follow by the end of the week, then send the measure to President Donald Trump to sign into law.

Congress approved $3 trillion in aid in the spring to mitigate the effects of shutdowns to curb the spread of the coronavirus, but legislators have not been able to agree on any additional help since.

The pandemic has roared back to levels surpassing those seen early in the crisis, with more than 200,000 new infections reported each day and fresh shutdowns in some areas. More than 287,000 Americans have died of COVID-19 so far, and millions have been thrown out of work.

(Reporting by Susan Cornwell, David Morgan and Richard Cowan; Editing by Sonya Hepinstall, Peter Cooney, Jonathan Oatis and Cynthia Osterman)

As pandemic lifelines expire, Americans in housing free fall

By Michelle Conlin

NEW YORK (Reuters) – Clarence Hamer doesn’t expect to hang on to his house much longer.

His downstairs tenant owes him nearly $50,000 in back rent on the four-bedroom duplex he owns in Brownsville, Brooklyn. Without those rental payments, Hamer has been unable to pay the thousands he owes in heat, hot water and property taxes. In September, after exhausting his life savings, he stopped paying the mortgage, too.

“I don’t have any corporate backing or any other type of insurance,” said Hamer, a 46-year-old landlord who works for the city of New York. “All I have is my home, and it seems apparent that I’m going to lose it.”

America’s mom-and-pop landlords, along with their tenants, have been dangling by a thread for nine months. Now, with Congress still deadlocked over the contours of a second pandemic stimulus package, they are entering a new housing abyss, a perilous period of pandemic limbo as the last of the safety nets are set to expire.

The day after Christmas, the extended unemployment benefits that have kept 12 million people and their families afloat are scheduled to expire. Then, mere days after that cliff, on New Year’s Day, a national ban on renter evictions from the Centers for Disease Control and Prevention is also set to lapse.

Overnight, an unprecedented bill of $70 billion in unpaid back rent and utilities will come due, according to estimates by Moody’s Analytics Chief Economist Mark Zandi. In all, up to 40 million people could be threatened with eviction over the coming months, research from the Aspen Institute says.

Much of the focus has been on tenants. But Stacey Johnson-Cosby, president of the Kansas City Regional Housing Alliance, says more than 40% of the landlords surveyed in her coalition said that they expected to have to sell their units in the coming months due to rental income losses.

“They are sheltering our citizens free of charge and there’s nothing we can do about it,” said Johnson-Cosby. “This is their retirement income.”

She added that small landlords are also terrified of speaking out for fear of drawing the ire of tenant rights groups who promote “Cancel Rent” and have bombarded landlords with publicity campaigns featuring their pictures and barricades at apartment buildings and local courthouses.

“What they don’t realize is that if they run us out and we fail, it will be private equity and Wall Street firms that buy up all our properties, just like they did with houses after the last foreclosure crash.”

PANDEMIC DEADLOCK

A $908 billion second stimulus relief package proposed by a bipartisan group of senators is gaining traction in Washington but it is unclear if President Donald Trump will support the plan, and it only includes $25 billion for rent relief—far from the $70 billion needed in January.

President-elect Joe Biden has indicated he will sign executive orders the day he takes office extending moratoriums on evictions and foreclosures as well as other relief measures.

But that will not address a brutal 20 days in January, between the safety net expirations and Biden’s inauguration, when the free fall will begin. And economists say this period of uncertainty has already contributed to economic scarring that could threaten the U.S. economic recovery, which is showing signs of slowing and veering back into recession.

Though Biden will likely be telegraphing his administration’s solutions in the coming weeks, “the reality on the ground is going to be very dark, with people losing homes in the dead of winter during a pandemic, said Moody’s Zandi. “It’s going to be very painful and devastating. There’s going to be a lot of people who fall through the cracks.”

Underscoring the urgency of the situation is the fact that new research shows that evictions have led to increases in COVID-19 cases and deaths.

A report released Nov. 30 by a consortium of university researchers found that there were 433,700 excess cases of COVID and 10,700 excess deaths associated with the lifting of eviction moratoriums during the summer, before the blanket CDC ban began. States that let moratoriums expire had a 2.1-times higher incidence of cases and 5.4-times higher mortality, according to the researchers from Johns Hopkins University and other four other universities.

The cost of this housing instability is not spread evenly, as Blacks, whose employment has been hit the hardest during the pandemic, comprise 80% of those facing eviction in major cities and are also more than twice as likely to die of COVID than whites.

ZOMBIE PROPERTIES

At first, it all seemed easy. In May 2019, Clarence Hamer’s new tenant had passed a background check and said she would live a quiet life with her elderly father and boyfriend in the $3,250-a-month duplex.

Two months after moving in, she stopped paying the full rent. Hamer tried everything: calling her, texting her, knocking on her door—but to no avail. In August 2019, he filed an eviction notice. But the court date kept getting delayed until March 2020, when COVID-19 hit and the courts ground to a halt.

Then, his tenant sublet the unit to other people –Hamer is hamstrung from getting them out, too. He says they have trashed the once tidy unit, and that there is a constant odor of marijuana, and foot traffic in and out of the home at all hours of the day. He watches it all and feels powerless, his net worth now turned into a zombie property.

“They are going to foreclose. It’s only going to be a matter of time,” said Hamer. “And rightfully so, I can’t blame them. Apparently we are all in this together—unless you are a landlord.”

(Reporting by Michelle Conlin; Editing by Tom Lasseter and Lisa Shumaker)

As U.S. companies push to get workers vaccinated, states disagree on who’s essential

By Tina Bellon and Richa Naidu

NEW YORK/CHICAGO (Reuters) – Companies and industry groups lobbying to get their U.S. workers to the front of the line for COVID vaccination are running into a patchwork of state plans and confusion over who is essential, and who is not.

Inoculation against the disease caused by the novel coronavirus is key to safely reopening large parts of the economy and reducing the risks of illness at crowded meatpacking plants, factories and warehouses.

But before one needle has entered the arm of an American worker, confusion has broken out over who exactly is considered essential during a pandemic.

With initial vaccine doses limited and strong federal guidance lacking, it has fallen to U.S. states to determine who will be first in line to receive a vaccine, and who will have to wait well into next year.

State vaccine distribution plans reviewed by Reuters showed broad discrepancies over who would be considered essential, with some states clearly outlining specific worker groups and others not providing any clarity.

Generally, states have broad discretion when it comes to vaccine distribution and policy and are able to issue vaccination mandates for their residents.

Many states have so far followed federal guidance to give meat and food processing industry workers space in the line, but some are slowly moving away, said Mark Lauritsen, a former hog slaughter worker who now advocates on behalf of about 250,000 meatpacking and food processing workers under the United Food and Commercial Workers union.

“For example, Colorado has not moved meatpacking and meat-processing as high as some other states. So we’ll be directing a lot of our effort towards places like Colorado where we may be moved down the food chain.”

“We’re a union that has members in every state so we will be talking to every state to make our case as to where our place in line should be…Everybody is going to be jockeying for a place in line.”

More than 20 large industries have urged officials to prioritize their workers, including individual companies such as ride-hailing company Uber Technologies Inc and food delivery provider DoorDash Inc and industry groups representing truck drivers, teachers, retail workers and other business sectors.

DoorDash in its letter calling for preferred vaccine access for its delivery workers said the company could also help public health officials communicate vaccine information through its platform.

At least 22 industries, including agricultural companies, cleaning suppliers, dental hygienists, bus drivers and meat packers, also have written to the Advisory Committee on Immunization Practices (ACIP), an independent panel of health experts recommending vaccine distribution guidelines to the U.S. Centers for Disease Control and Prevention.

WHO IS ESSENTIAL?

“We’re hopeful that local health officials start jumping on this quicker rather than later so that there’s some guidance and some better sense of how to be efficient with the essential workforce,” said Bryan Zumwalt, executive vice president of public affairs for the Consumer Brands Association.

The group representing consumer products makers including Procter & Gamble Co and Coca-Cola Co, has sent letters to nearly all 50 U.S. states and federal officials, urging their nearly 1.2 million workers to be prioritized for a vaccine.

ACIP to date has only recommended healthcare personnel and residents of long-term care facilities should receive the vaccine first – a priority not disputed by any industry or state. ACIP members did not respond to a request for comment or declined to comment pending the discussions.

While some states have said they would await the committee’s further recommendations, others went ahead and developed their own vaccine distribution priorities, a review of COVID-19 vaccine distribution plans showed.

In New York, essential frontline workers regularly interacting with the public, such as pharmacists, grocery store workers and transit employees, are slated to receive the vaccine in a second distribution phase, while Florida included all essential workers on a U.S. Homeland Security list.

But that Homeland Security department list, spanning more than 25 major industries, makes up nearly 70% of the U.S. labor force, according to researchers at the National Bureau of Economic Research.

Georgia’s plan said the state was working with various industries, including poultry plants, manufacturers and warehouse distributors.

In North Carolina, which has one of the most detailed distribution plans spanning nearly 150 pages, workers in meatpacking, seafood, poultry and food processing, transportation and retail would be included in an early phase so long as they had at least two chronic conditions that put them at high risk.

Pennsylvania’s distribution plan on the other hand only includes three pages, stating merely that those “contributing to the maintenance of core societal functions” would be prioritized.

(Reporting by Tina Bellon in New York, Richa Naidu in Chicago; Editing to Joe White and Lisa Shumaker)

U.S. third-quarter productivity pared; unit labor costs revised up

By Lucia Mutikani

WASHINGTON (Reuters) – U.S. worker productivity increased strongly in the third quarter, though the pace of growth was likely overstated as the sharp rebound in output from the COVID-19 pandemic recession has far outpaced employment gains.

The Labor Department said on Tuesday nonfarm productivity, which measures hourly output per worker, increased at a 4.6% annualized rate last quarter. The slight downward revision from the 4.9% pace estimated last month followed a 10.6% rate of growth in the second quarter, which was the fastest since the first quarter of 1971.

The economy expanded at a historic 33.1% annualized rate in the July-September quarter, thanks to more than $3 trillion in government pandemic relief for businesses and workers. That followed a record 31.4% pace of contraction in the second quarter. Strong productivity explains the divergence between GDP growth and the labor market.

The economy has recouped two-thirds of output lost during the coronavirus crisis, while only about 56% of the 22.2 million jobs lost in March and April. A wide gap between output and employment is not unusual during recessions, with a similar trend observed during the 2007-09 Great Recession.

Economists polled by Reuters had forecast productivity growth would be unrevised at a 4.9% rate in the third quarter. The COVID-19 downturn has decimated lower-wage industries, like leisure and hospitality, which economists say tend to be less productive.

According to Moodys’ Analytics chief economist, Mark Zandi, there has been a shift in economic activity to big companies from small and medium-sized retailers. Zandi also noted that big businesses across industries are taking advantage of the pandemic to aggressively implement labor-saving technology.

“The underlying rate of productivity has not shifted from what it was before,” said Zandi. “There is no fundamental shift in productivity growth going forward, but it means it’s going to take a while to recover all the jobs lost unless we have good policy in place.”

U.S. financial markets were little moved by the data.

Compared to the third quarter of 2019, productivity increased at a 4.0% rate instead of the 4.1% pace reported last month.

Hours worked rebounded at a 37.1% rate, rather than the 36.8% rate estimated in November. That followed a record 42.9% pace of decline in the second quarter.

Unit labor costs – the price of labor per single unit of output – plunged at a 6.6% rate instead of an 8.9% rate as previously reported. Unit labor costs rose at a 12.3% pace in the second quarter. They increased at a 4.0% rate from a year ago.

“The big swings in the unit labor costs data in recent quarters make it hard to detect an underlying trend, but overall we think that the shock to the economy coming from COVID-19 should weigh on employee compensation,” said Daniel Silver, an economist at JPMorgan in New York.

Hourly compensation fell at a 2.3% rate last quarter, instead of a 4.4% pace as previously reported. That followed a 24.3% rate of acceleration in the second quarter. Compensation increased at a 8.2% rate compared to the third quarter of 2019.

(Reporting by Lucia Mutikani; Editing by Andrew Heavens and Andrea Ricci)

In COVID-19 milestone for West, Britain starts mass vaccination

By Alistair Smout

LONDON (Reuters) – A 90-year-old grandmother became the world’s first person to receive a fully-tested COVID-19 shot on Tuesday, as Britain began mass-vaccinating its people in a global drive that poses one of the biggest logistical challenges in peacetime history.

Health workers started inoculating the most vulnerable with the vaccine developed by Pfizer and BioNTech, with the country a test case for the world as it contends with distributing a compound that must be stored at -70C (-94F).

Margaret Keenan, who turns 91 in a week, was the first to receive the shot, at a hospital in Coventry, central England.

“It’s the best early birthday present I could wish for because it means I can finally look forward to spending time with my family and friends in the new year after being on my own for most of the year,” she said.

The launch of the vaccine, one of three shots that have reported successful results from large trials, will fuel hope that the world may be turning a corner in the fight against a pandemic that has killed more than 1.5 million people.

Britain, the worst-hit in Europe with over 61,000 deaths, is the first Western nation to begin mass-vaccinations and the first globally to roll out the Pfizer/BioNTech shot.

But despite the relief of people receiving the first dose of the two-dose regimen, they will have to wait three weeks for their second shot, and there is no evidence immunization will reduce transmission of the virus.

“It will gradually make a huge, huge difference. But I stress gradually, because we’re not there yet. We haven’t defeated this virus yet,” Prime Minister Boris Johnson said.

Health Secretary Matt Hancock said he expected millions to be vaccinated by the end of the year, and described the start of the drive as “V-Day.” But he cautioned people should respect social-distancing rules until spring at least, when he hoped the most vulnerable people would be vaccinated.

The country has ordered enough supplies of the Pfizer/BioNTech shot to vaccinate 20 million people. The developers said it was 95% effective in preventing illness in final-stage trials.

Russia and China have both already started giving domestically produced vaccine candidates to their populations, though before final safety and efficacy trials have been completed.

FIVE DAYS IN A FRIDGE

In Britain, about 800,000 doses are expected to be available within the first week, with care-home residents and carers, the over-80s and some health workers prioritized. Hancock said he had a “high degree of confidence” Britain would take delivery of another batch of the vaccine next week.

“I know we’re absolutely bursting at the doors with COVID patients, so I more than anybody wants it to happen quickly,” said Ami Jones, a hospital intensive-care consultant from Wales who received the jab before going to work.

The country is relatively small with good infrastructure. Yet the logistical challenges in distributing the vaccine, which only lasts five days in a regular fridge, mean it will first go to dozens of hospitals and cannot yet be taken into care homes.

Bigger tests could await for the Pfizer/BioNTech shot, as well as a vaccine from Moderna, which was found to have a similar level of success in trials and is based on the same mRNA genetic technology that requires such ultra-cold storage.

Transport and distribution could prove more challenging in hot countries and bigger nations such as the United States and India, which have been worst-hit by COVID-19 and are expected to approve the shot for emergency use in the coming days or weeks.

South Korea, which has coped relatively well with the pandemic, sounded a note of caution, saying it would not hurry vaccine rollouts, partly to give it time to observe potential side-effects in other countries. Vaccinations may start in the first half of 2021, the health ministry added.

The third vaccine to have had trial success, developed by AstraZeneca and Oxford University, is viewed as offering one of the best hopes for many developing countries because it is cheaper and can be transported at normal fridge temperatures. Late-stage trials found it had an average success rate of 70%.

Britain hopes for regulatory approval of the Oxford/AstraZeneca shot in the next couple of weeks.

A SHOT FOR SHAKESPEARE

Britain approved the Pfizer/BioNTech vaccine for emergency use less than a week ago, and is rolling it out ahead of the United States and European Union.

The Pfizer/BioNTech vaccine is being imported from Belgium, while initial supplies of the AstraZeneca/Oxford shot are being shipped from Germany.

“Of course, it adds complexity,” Steve Bates, chief executive of the BioIndustry Association, told reporters of the possible impact of Brexit. “But there is a robust plan for alternative routes and mitigation.”

In total Britain has ordered 40 million doses of the Pfizer/BioNTech shot, enough to vaccinate 20 million people in the country of 67 million. It has ordered 357 million doses of seven different COVID-19 vaccines in all.

Amid the gravity of the pandemic, the vaccination on Tuesday of one William Shakespeare, an 81-year-old of Warwickshire in England, was greeted with humor on social media.

Twitter users joked about “The Taming of the Flu” and “The Two Gentlemen of Corona”. Some asked, if Margaret Keenan was patient 1A, was Shakespeare “Patient 2B or not 2B?”.

(Reporting by Alistair Smout; Additional reporting by Sarah Young, Kate Holton and Natalie Thomas; Editing by Guy Faulconbridge and Pravin Char)