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| Worst Economy in a Decade. What’s Next? ‘Worst in Our Lifetime.’ | Worst Economy in a Decade. What’s Next? ‘Worst in Our Lifetime.’ |
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| The coronavirus pandemic officially snapped the United States’ economic growth streak in the first three months of the year. The question now is how deep the damage will get — and how long the country will take to recover. | The coronavirus pandemic officially snapped the United States’ economic growth streak in the first three months of the year. The question now is how deep the damage will get — and how long the country will take to recover. |
| U.S. gross domestic product, the broadest measure of goods and services output, fell at a 4.8 percent annual rate in the first quarter of the year, the Commerce Department said Wednesday. That is the first decline since 2014, and the worst quarterly contraction since 2008, when the country was in a deep recession. | U.S. gross domestic product, the broadest measure of goods and services output, fell at a 4.8 percent annual rate in the first quarter of the year, the Commerce Department said Wednesday. That is the first decline since 2014, and the worst quarterly contraction since 2008, when the country was in a deep recession. |
| There is much worse to come. Widespread layoffs and business closings didn’t hit until late March in most of the country. Economists expect figures from the current quarter, which will capture the shutdown’s impact more fully, to show that G.D.P. contracted at an annual rate of 30 percent or more, a scale not seen since the Great Depression. | There is much worse to come. Widespread layoffs and business closings didn’t hit until late March in most of the country. Economists expect figures from the current quarter, which will capture the shutdown’s impact more fully, to show that G.D.P. contracted at an annual rate of 30 percent or more, a scale not seen since the Great Depression. |
| “They’re going to be the worst in our lifetime,” Dan North, chief economist for the credit insurance company Euler Hermes North America, said of the second-quarter figures. “They’re going to be the worst in the post-World War II era.” | “They’re going to be the worst in our lifetime,” Dan North, chief economist for the credit insurance company Euler Hermes North America, said of the second-quarter figures. “They’re going to be the worst in the post-World War II era.” |
| The Federal Reserve pledged Wednesday to use its full range of tools to mitigate the effects of the downturn and restore the economy to health. Jerome H. Powell, the Fed chair, said Congress, too, would most likely have to do more. | The Federal Reserve pledged Wednesday to use its full range of tools to mitigate the effects of the downturn and restore the economy to health. Jerome H. Powell, the Fed chair, said Congress, too, would most likely have to do more. |
| “The depth and the duration of the economic downturn are extraordinarily uncertain,” Mr. Powell said Wednesday. “It may well be the case that the economy will need more support from all of us if the recovery is going to be a robust one.” | “The depth and the duration of the economic downturn are extraordinarily uncertain,” Mr. Powell said Wednesday. “It may well be the case that the economy will need more support from all of us if the recovery is going to be a robust one.” |
| Treasury Secretary Steven Mnuchin said this week that he expected the economy to “really bounce back” this summer as states lift stay-home orders and trillions of dollars in federal emergency spending reaches businesses and households. But most independent economists are much less optimistic. The Congressional Budget Office last week released projections indicating that the economy will begin growing again in the second half of the year but that the G.D.P. won’t return to its pre-pandemic level until 2022 at the earliest. | Treasury Secretary Steven Mnuchin said this week that he expected the economy to “really bounce back” this summer as states lift stay-home orders and trillions of dollars in federal emergency spending reaches businesses and households. But most independent economists are much less optimistic. The Congressional Budget Office last week released projections indicating that the economy will begin growing again in the second half of the year but that the G.D.P. won’t return to its pre-pandemic level until 2022 at the earliest. |
| The Commerce Department estimates that were issued on Wednesday are preliminary and based on incomplete data, particularly for March. The speed of the economic shift means that revisions could be large, and some economists expect final figures, due later this spring, to show an even bigger decline. | The Commerce Department estimates that were issued on Wednesday are preliminary and based on incomplete data, particularly for March. The speed of the economic shift means that revisions could be large, and some economists expect final figures, due later this spring, to show an even bigger decline. |
| But the data, however incomplete, hinted at the breadth of the damage. Consumer spending, the bedrock of the decade-long economic expansion, fell at a 7.6 percent rate. Business investment, which had already been struggling in part because of the trade war, fell for the fourth straight quarter. Imports and exports both declined sharply as the pandemic brought global trade to a near standstill. | But the data, however incomplete, hinted at the breadth of the damage. Consumer spending, the bedrock of the decade-long economic expansion, fell at a 7.6 percent rate. Business investment, which had already been struggling in part because of the trade war, fell for the fourth straight quarter. Imports and exports both declined sharply as the pandemic brought global trade to a near standstill. |
| The pandemic has hit the service sector particularly hard: Restaurants are closed, flights are nearly empty, and stadiums have sat unused for weeks. Spending on services fell at a 10.2 percent rate in the first quarter, and spending at restaurants and hotels was down nearly 30 percent on an annual basis. Consumers even spent less on health care, as they put off appointments and canceled elective procedures. | The pandemic has hit the service sector particularly hard: Restaurants are closed, flights are nearly empty, and stadiums have sat unused for weeks. Spending on services fell at a 10.2 percent rate in the first quarter, and spending at restaurants and hotels was down nearly 30 percent on an annual basis. Consumers even spent less on health care, as they put off appointments and canceled elective procedures. |
| Spending on goods fell at a milder 1.3 percent rate, helped by a surge in spending on groceries as Americans stocked up for the shutdown. But spending on cars plunged at a 33.2 percent rate. | Spending on goods fell at a milder 1.3 percent rate, helped by a surge in spending on groceries as Americans stocked up for the shutdown. But spending on cars plunged at a 33.2 percent rate. |
| That pattern could hurt the recovery. Consumers who put off buying goods, especially long-lasting items like cars and washing machines, might simply defer those purchases, not skip them. But they are less likely to make up for spending on services the same way — no matter how many haircuts someone misses in quarantine, it takes only one to get back to normal. | That pattern could hurt the recovery. Consumers who put off buying goods, especially long-lasting items like cars and washing machines, might simply defer those purchases, not skip them. But they are less likely to make up for spending on services the same way — no matter how many haircuts someone misses in quarantine, it takes only one to get back to normal. |
| When the new coronavirus began to spread in the United States this year, many economists expected a “V-shaped” recovery, with a sharp downturn followed by an equally swift rebound. But those projections were mostly predicated on a short pause in activity that could be quickly reversed. As lockdowns have stretched into a second month — and with disruptions likely to continue for weeks or months in many states — those hopes have faded. | When the new coronavirus began to spread in the United States this year, many economists expected a “V-shaped” recovery, with a sharp downturn followed by an equally swift rebound. But those projections were mostly predicated on a short pause in activity that could be quickly reversed. As lockdowns have stretched into a second month — and with disruptions likely to continue for weeks or months in many states — those hopes have faded. |
| With each month of unpaid bills and rock-bottom sales, more businesses will go bankrupt or decide not to reopen. More workers will drift away from their employers, turning temporary layoffs into permanent job losses. More loans will lapse into delinquency, endangering banks and the broader financial system. | With each month of unpaid bills and rock-bottom sales, more businesses will go bankrupt or decide not to reopen. More workers will drift away from their employers, turning temporary layoffs into permanent job losses. More loans will lapse into delinquency, endangering banks and the broader financial system. |
| “The longer things stay shut down, the harder it’s going to be to turn it back on again,” said Tara Sinclair, an economist at George Washington University. | “The longer things stay shut down, the harder it’s going to be to turn it back on again,” said Tara Sinclair, an economist at George Washington University. |
| Those consequences have led President Trump and other elected officials — particularly Republican governors in states with relatively few coronavirus cases — to push to reopen the economy as quickly as possible. Several states have started to do so, and others, including large ones like Texas and Florida, will begin to at the end of the month. | Those consequences have led President Trump and other elected officials — particularly Republican governors in states with relatively few coronavirus cases — to push to reopen the economy as quickly as possible. Several states have started to do so, and others, including large ones like Texas and Florida, will begin to at the end of the month. |
| But economists and epidemiologists say moving too quickly threatens both public health and economic growth. The United States is not performing nearly as many coronavirus tests as health officials say are necessary to detect and contain new outbreaks. Until that happens, a robust economic rebound won’t be possible, said Karen Dynan, a Harvard economist who was a Treasury official in the Obama administration. | But economists and epidemiologists say moving too quickly threatens both public health and economic growth. The United States is not performing nearly as many coronavirus tests as health officials say are necessary to detect and contain new outbreaks. Until that happens, a robust economic rebound won’t be possible, said Karen Dynan, a Harvard economist who was a Treasury official in the Obama administration. |
| “You could lift the restrictions tomorrow and the economy would still not come back if people don’t feel safe to go out,” she said. As a result, “measures that we normally consider to be public health measures are in this case a really important component of the economic policy response.” | “You could lift the restrictions tomorrow and the economy would still not come back if people don’t feel safe to go out,” she said. As a result, “measures that we normally consider to be public health measures are in this case a really important component of the economic policy response.” |
| Nader Masadeh, chief executive of Buffalo Wings & Rings, a restaurant chain based in Ohio, remembers when he realized the coronavirus was coming for his business: March 12. That was the day that Gov. Mike DeWine announced a ban on large gatherings in the state, and when the National Collegiate Athletic Association canceled the annual men’s basketball tournament that is Mr. Masadeh’s biggest draw. | Nader Masadeh, chief executive of Buffalo Wings & Rings, a restaurant chain based in Ohio, remembers when he realized the coronavirus was coming for his business: March 12. That was the day that Gov. Mike DeWine announced a ban on large gatherings in the state, and when the National Collegiate Athletic Association canceled the annual men’s basketball tournament that is Mr. Masadeh’s biggest draw. |
| “That’s when we realized this is really for real,” he said. | “That’s when we realized this is really for real,” he said. |
| Mr. Masadeh quickly formed two teams. The first focused on ensuring that the business could survive the shutdown by cutting costs wherever possible — renegotiating leases and canceling contracts for linens, window cleaning and music service — and looking for ways to generate revenue through online ordering and curbside pickup. | Mr. Masadeh quickly formed two teams. The first focused on ensuring that the business could survive the shutdown by cutting costs wherever possible — renegotiating leases and canceling contracts for linens, window cleaning and music service — and looking for ways to generate revenue through online ordering and curbside pickup. |
| “The impact of it is way unknown, so cash preservation becomes your No. 1 priority,” Mr. Masadeh said. | “The impact of it is way unknown, so cash preservation becomes your No. 1 priority,” Mr. Masadeh said. |
| The second team focused on reopening: How could the company put diners at ease once restaurants resumed business? Plastic menus are being replaced by disposable paper. Staff members will wear masks and gloves. Tables will be farther apart. Cleaning standards, already high, will be higher. | The second team focused on reopening: How could the company put diners at ease once restaurants resumed business? Plastic menus are being replaced by disposable paper. Staff members will wear masks and gloves. Tables will be farther apart. Cleaning standards, already high, will be higher. |
| Updated July 7, 2020 | |
| The coronavirus can stay aloft for hours in tiny droplets in stagnant air, infecting people as they inhale, mounting scientific evidence suggests. This risk is highest in crowded indoor spaces with poor ventilation, and may help explain super-spreading events reported in meatpacking plants, churches and restaurants. It’s unclear how often the virus is spread via these tiny droplets, or aerosols, compared with larger droplets that are expelled when a sick person coughs or sneezes, or transmitted through contact with contaminated surfaces, said Linsey Marr, an aerosol expert at Virginia Tech. Aerosols are released even when a person without symptoms exhales, talks or sings, according to Dr. Marr and more than 200 other experts, who have outlined the evidence in an open letter to the World Health Organization. | |
| Common symptoms include fever, a dry cough, fatigue and difficulty breathing or shortness of breath. Some of these symptoms overlap with those of the flu, making detection difficult, but runny noses and stuffy sinuses are less common. The C.D.C. has also added chills, muscle pain, sore throat, headache and a new loss of the sense of taste or smell as symptoms to look out for. Most people fall ill five to seven days after exposure, but symptoms may appear in as few as two days or as many as 14 days. | Common symptoms include fever, a dry cough, fatigue and difficulty breathing or shortness of breath. Some of these symptoms overlap with those of the flu, making detection difficult, but runny noses and stuffy sinuses are less common. The C.D.C. has also added chills, muscle pain, sore throat, headache and a new loss of the sense of taste or smell as symptoms to look out for. Most people fall ill five to seven days after exposure, but symptoms may appear in as few as two days or as many as 14 days. |
| Scientists around the country have tried to identify everyday materials that do a good job of filtering microscopic particles. In recent tests, HEPA furnace filters scored high, as did vacuum cleaner bags, fabric similar to flannel pajamas and those of 600-count pillowcases. Other materials tested included layered coffee filters and scarves and bandannas. These scored lower, but still captured a small percentage of particles. | Scientists around the country have tried to identify everyday materials that do a good job of filtering microscopic particles. In recent tests, HEPA furnace filters scored high, as did vacuum cleaner bags, fabric similar to flannel pajamas and those of 600-count pillowcases. Other materials tested included layered coffee filters and scarves and bandannas. These scored lower, but still captured a small percentage of particles. |
| A commentary published this month on the website of the British Journal of Sports Medicine points out that covering your face during exercise “comes with issues of potential breathing restriction and discomfort” and requires “balancing benefits versus possible adverse events.” Masks do alter exercise, says Cedric X. Bryant, the president and chief science officer of the American Council on Exercise, a nonprofit organization that funds exercise research and certifies fitness professionals. “In my personal experience,” he says, “heart rates are higher at the same relative intensity when you wear a mask.” Some people also could experience lightheadedness during familiar workouts while masked, says Len Kravitz, a professor of exercise science at the University of New Mexico. | A commentary published this month on the website of the British Journal of Sports Medicine points out that covering your face during exercise “comes with issues of potential breathing restriction and discomfort” and requires “balancing benefits versus possible adverse events.” Masks do alter exercise, says Cedric X. Bryant, the president and chief science officer of the American Council on Exercise, a nonprofit organization that funds exercise research and certifies fitness professionals. “In my personal experience,” he says, “heart rates are higher at the same relative intensity when you wear a mask.” Some people also could experience lightheadedness during familiar workouts while masked, says Len Kravitz, a professor of exercise science at the University of New Mexico. |
| The steroid, dexamethasone, is the first treatment shown to reduce mortality in severely ill patients, according to scientists in Britain. The drug appears to reduce inflammation caused by the immune system, protecting the tissues. In the study, dexamethasone reduced deaths of patients on ventilators by one-third, and deaths of patients on oxygen by one-fifth. | The steroid, dexamethasone, is the first treatment shown to reduce mortality in severely ill patients, according to scientists in Britain. The drug appears to reduce inflammation caused by the immune system, protecting the tissues. In the study, dexamethasone reduced deaths of patients on ventilators by one-third, and deaths of patients on oxygen by one-fifth. |
| The coronavirus emergency relief package gives many American workers paid leave if they need to take time off because of the virus. It gives qualified workers two weeks of paid sick leave if they are ill, quarantined or seeking diagnosis or preventive care for coronavirus, or if they are caring for sick family members. It gives 12 weeks of paid leave to people caring for children whose schools are closed or whose child care provider is unavailable because of the coronavirus. It is the first time the United States has had widespread federally mandated paid leave, and includes people who don’t typically get such benefits, like part-time and gig economy workers. But the measure excludes at least half of private-sector workers, including those at the country’s largest employers, and gives small employers significant leeway to deny leave. | The coronavirus emergency relief package gives many American workers paid leave if they need to take time off because of the virus. It gives qualified workers two weeks of paid sick leave if they are ill, quarantined or seeking diagnosis or preventive care for coronavirus, or if they are caring for sick family members. It gives 12 weeks of paid leave to people caring for children whose schools are closed or whose child care provider is unavailable because of the coronavirus. It is the first time the United States has had widespread federally mandated paid leave, and includes people who don’t typically get such benefits, like part-time and gig economy workers. But the measure excludes at least half of private-sector workers, including those at the country’s largest employers, and gives small employers significant leeway to deny leave. |
| So far, the evidence seems to show it does. A widely cited paper published in April suggests that people are most infectious about two days before the onset of coronavirus symptoms and estimated that 44 percent of new infections were a result of transmission from people who were not yet showing symptoms. Recently, a top expert at the World Health Organization stated that transmission of the coronavirus by people who did not have symptoms was “very rare,” but she later walked back that statement. | So far, the evidence seems to show it does. A widely cited paper published in April suggests that people are most infectious about two days before the onset of coronavirus symptoms and estimated that 44 percent of new infections were a result of transmission from people who were not yet showing symptoms. Recently, a top expert at the World Health Organization stated that transmission of the coronavirus by people who did not have symptoms was “very rare,” but she later walked back that statement. |
| Touching contaminated objects and then infecting ourselves with the germs is not typically how the virus spreads. But it can happen. A number of studies of flu, rhinovirus, coronavirus and other microbes have shown that respiratory illnesses, including the new coronavirus, can spread by touching contaminated surfaces, particularly in places like day care centers, offices and hospitals. But a long chain of events has to happen for the disease to spread that way. The best way to protect yourself from coronavirus — whether it’s surface transmission or close human contact — is still social distancing, washing your hands, not touching your face and wearing masks. | Touching contaminated objects and then infecting ourselves with the germs is not typically how the virus spreads. But it can happen. A number of studies of flu, rhinovirus, coronavirus and other microbes have shown that respiratory illnesses, including the new coronavirus, can spread by touching contaminated surfaces, particularly in places like day care centers, offices and hospitals. But a long chain of events has to happen for the disease to spread that way. The best way to protect yourself from coronavirus — whether it’s surface transmission or close human contact — is still social distancing, washing your hands, not touching your face and wearing masks. |
| A study by European scientists is the first to document a strong statistical link between genetic variations and Covid-19, the illness caused by the coronavirus. Having Type A blood was linked to a 50 percent increase in the likelihood that a patient would need to get oxygen or to go on a ventilator, according to the new study. | A study by European scientists is the first to document a strong statistical link between genetic variations and Covid-19, the illness caused by the coronavirus. Having Type A blood was linked to a 50 percent increase in the likelihood that a patient would need to get oxygen or to go on a ventilator, according to the new study. |
| If air travel is unavoidable, there are some steps you can take to protect yourself. Most important: Wash your hands often, and stop touching your face. If possible, choose a window seat. A study from Emory University found that during flu season, the safest place to sit on a plane is by a window, as people sitting in window seats had less contact with potentially sick people. Disinfect hard surfaces. When you get to your seat and your hands are clean, use disinfecting wipes to clean the hard surfaces at your seat like the head and arm rest, the seatbelt buckle, the remote, screen, seat back pocket and the tray table. If the seat is hard and nonporous or leather or pleather, you can wipe that down, too. (Using wipes on upholstered seats could lead to a wet seat and spreading of germs rather than killing them.) | If air travel is unavoidable, there are some steps you can take to protect yourself. Most important: Wash your hands often, and stop touching your face. If possible, choose a window seat. A study from Emory University found that during flu season, the safest place to sit on a plane is by a window, as people sitting in window seats had less contact with potentially sick people. Disinfect hard surfaces. When you get to your seat and your hands are clean, use disinfecting wipes to clean the hard surfaces at your seat like the head and arm rest, the seatbelt buckle, the remote, screen, seat back pocket and the tray table. If the seat is hard and nonporous or leather or pleather, you can wipe that down, too. (Using wipes on upholstered seats could lead to a wet seat and spreading of germs rather than killing them.) |
| If you’ve been exposed to the coronavirus or think you have, and have a fever or symptoms like a cough or difficulty breathing, call a doctor. They should give you advice on whether you should be tested, how to get tested, and how to seek medical treatment without potentially infecting or exposing others. | If you’ve been exposed to the coronavirus or think you have, and have a fever or symptoms like a cough or difficulty breathing, call a doctor. They should give you advice on whether you should be tested, how to get tested, and how to seek medical treatment without potentially infecting or exposing others. |
| Mr. Masadeh is eager to reopen. But he is also nervous. He has been able to push off bills during the shutdown, but once it ends, vendors and lenders will expect payments. Rehiring and retraining workers will be expensive. And he doesn’t know how quickly customers will come back. | Mr. Masadeh is eager to reopen. But he is also nervous. He has been able to push off bills during the shutdown, but once it ends, vendors and lenders will expect payments. Rehiring and retraining workers will be expensive. And he doesn’t know how quickly customers will come back. |
| “The biggest fear that I’m thinking about is that we reopen and the number of infections ramps back up again and they say, ‘Whoa, we made a mistake,’” he said. “We cannot afford a second shutdown. We only have one shot at reopening, and if we miss it or don’t get it right, then the inevitable will happen.” | “The biggest fear that I’m thinking about is that we reopen and the number of infections ramps back up again and they say, ‘Whoa, we made a mistake,’” he said. “We cannot afford a second shutdown. We only have one shot at reopening, and if we miss it or don’t get it right, then the inevitable will happen.” |
| Concern about the public health situation is complicating the work of economic forecasters and policymakers as well. The usual tools for stimulating consumer spending and business investment don’t help much when businesses can’t operate and consumers can’t leave the house. Standard economic models can’t predict when a vaccine will become available, or when people will feel comfortable going back to work. | Concern about the public health situation is complicating the work of economic forecasters and policymakers as well. The usual tools for stimulating consumer spending and business investment don’t help much when businesses can’t operate and consumers can’t leave the house. Standard economic models can’t predict when a vaccine will become available, or when people will feel comfortable going back to work. |
| “If we could be told right now with confidence that on X date, whenever X date is, the virus will be gone — if we knew that now, I think businesses could plan accordingly and could make the right calculations,” said Ms. Sinclair, the economist. “The problem is that we don’t have that certainty, and there’s no way to have that certainty. There’s no way to promise when we can restart, and that uncertainty is what’s killing our ability to do good economic policy.” | “If we could be told right now with confidence that on X date, whenever X date is, the virus will be gone — if we knew that now, I think businesses could plan accordingly and could make the right calculations,” said Ms. Sinclair, the economist. “The problem is that we don’t have that certainty, and there’s no way to have that certainty. There’s no way to promise when we can restart, and that uncertainty is what’s killing our ability to do good economic policy.” |
| Even businesses that have weathered the crisis in relatively strong shape are struggling with the uncertainty. | Even businesses that have weathered the crisis in relatively strong shape are struggling with the uncertainty. |
| Elliott Equipment, an Omaha-based manufacturer of aerial platforms and truck-mounted cranes, is considered an essential business and has kept its production lines running. The company recently moved into a larger facility, making social distancing relatively easy. And its customers — including utilities, telecommunications companies, and state and local governments — are still using its equipment and ordering replacement parts. | Elliott Equipment, an Omaha-based manufacturer of aerial platforms and truck-mounted cranes, is considered an essential business and has kept its production lines running. The company recently moved into a larger facility, making social distancing relatively easy. And its customers — including utilities, telecommunications companies, and state and local governments — are still using its equipment and ordering replacement parts. |
| But with the offices of potential customers mostly closed to visitors, new orders have fallen sharply, said Jim Glazer, the company’s chief executive. | But with the offices of potential customers mostly closed to visitors, new orders have fallen sharply, said Jim Glazer, the company’s chief executive. |
| “It’s hit a pause button on demand,” he said. | “It’s hit a pause button on demand,” he said. |
| Elliott pared its work force of about 150 early in the crisis. It later received a loan through the Paycheck Protection Program created by Congress as part of its emergency aid package. At a time when many companies are at risk of going out of business, Mr. Glazer said, Elliott isn't — it has been around since 1948 and has weathered many storms, he said. Still, he isn’t sure what to expect in the months ahead. | Elliott pared its work force of about 150 early in the crisis. It later received a loan through the Paycheck Protection Program created by Congress as part of its emergency aid package. At a time when many companies are at risk of going out of business, Mr. Glazer said, Elliott isn't — it has been around since 1948 and has weathered many storms, he said. Still, he isn’t sure what to expect in the months ahead. |
| “It’s somewhat hard to plan given that there’s not going to be an on-off switch turned on,” he said. “It may take a period of time — 2022 it may be, even — before we get back to normal.” | “It’s somewhat hard to plan given that there’s not going to be an on-off switch turned on,” he said. “It may take a period of time — 2022 it may be, even — before we get back to normal.” |