First, the economy is sinking into a deep, structural recession that is unlikely to recede quickly. The Post reports: “U.S. companies shed 20.2 million jobs from their payrolls in April as the coronavirus pandemic brought the economy to a standstill and shuttered many of the country’s businesses. ... April’s staggering number is the worst in the report’s history, which began in 2002, and is double the last record set in February 2009, during the Great Recession.” And that figure covers less than half of the month.
The job losses hit service workers the hardest, but manufacturing and construction are also grinding to a halt, shutting factories and shedding more than 4 million jobs. This is a signal that big employers do not imagine the recession lifting soon. These are not mom-and-pop shops, but major employers. CNBC reports, “Walt Disney will stop paying more than 100,000 employees this week, nearly half of its workforce.” Major carmakers are also slicing their payrolls.
What’s more, our trading partners are already slipping into a deep recession, which means we will lose even more consumers. (The New York Times reports: “The European Union’s economy is set to shrink by 7.4 percent this year, investment is expected to collapse and unemployment rates, debts and deficits will balloon in the brutal aftermath of the pandemic, the European Commission said on Wednesday.”)
In short, there is no evidence that major employers have bought into the hype that the economy will be back in high gear in a month or so. If reopening was supposed to generate a sense of normalcy and induce employers to bring back their employees, it is not working.
The second reason — the duration of the pandemic — is an even bigger barrier to Trump’s economic revival. The Associated Press reports: “New confirmed infections per day in the U.S. exceed 20,000, and deaths per day are well over 1,000, according to figures from Johns Hopkins University. And public health officials warn that the failure to flatten the curve and drive down the infection rate in places could lead to many more deaths — perhaps tens of thousands — as people are allowed to venture out and businesses reopen.” While extreme social-distancing measures have bent the curve in New York, the rest of the country has been going in the opposite direction: Take New York out of the equation and “the rate of new cases in the U.S. increased . . . from 6.2 per 100,000 people to 7.5.”
Florida can reopen some businesses, but the deaths continue. “Florida’s Department of Health on Wednesday morning confirmed 563 additional cases of COVID-19, bringing the state total of confirmed cases to 38,002,” the Miami Herald reported. “There were 68 new deaths announced, raising the statewide death toll to 1,539.” As more people end social distancing, those figures are likely to surge.
Likewise, Georgia’s Brian Kemp (R) was among the first governors to reopen business. However, the Atlanta Journal Constitution reports on a new outbreak in northeast Georgia:
The number of new cases in the Gainesville area increased exponentially each week during April, according to state data. By Tuesday, nearly four dozen patients had died in the area’s dominant hospital system. ....The Gainesville outbreak, which has spread into neighboring Habersham County, is another indicator that the coronavirus is far from contained in Georgia. A report to the White House by the federal Centers for Disease Control and Prevention showed that in much of Georgia, including its northeast corner, confirmed cases of the virus continue to increase or, at best, have leveled off on a high plateau.
In sum, the recession is well underway, and the pandemic shows no sign of abatement. The likely result of premature openings without a robust system for testing, tracking and isolating cases is more deaths — and further economic pain.
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