As we close out another week with the coronavirus, perhaps you’ve adjusted to this new way of living. Have you developed a new routine? People generally need structure in their lives to maintain good mental health. We’re comforted by a sense of familiarity, normalcy, sameness.
Yet we’re living in an altered reality. The Labor Department reported yesterday morning that 6.6 million Americans filed for unemployment during the week ending March 27. In just two weeks, 10 million workers have filed for benefits. Previously, the highest number of weekly unemployment claims was 695,000, which was registered in 1982. This morning, we learned that US payrolls lost 701,000 jobs and our unemployment rate jumped to 4.4.%. Just a few weeks ago the US economy registered the lowest rate of unemployment (3.5%) since World War II.
How did the stock market react yesterday? It was up at the opening. President Trump told the cable news channel CNBC that he had spoken with Russian President Vladimir Putin and Saudi Crown Prince Mohammad Bin Salman, and claimed that he had convinced them to reduce oil production by 10 million barrels a day. We will see if they actually do it. In any, case investors reacted hopefully. The Dow Jones Industrial Average jumped 470 points, or 2.2%, and the S&P500 Index was up 56 points, or 2.3%.
The labor numbers are disturbing and they will undoubtedly get worse. Companies continue to lay off employees and workers are having difficulty navigating state unemployment systems. Fortunately, the recently-passed $2 trillion emergency funding package will provide assistance to workers who have had the rug ripped out from under them.
A Grim Milestone
The COVID-19 numbers continue to mount. Yesterday the number of cases globally crossed 1 million. In the US, we have over 245,000 cases and over 6,000 deaths, according to Johns Hopkins University and Medicine. The numbers are climbing rapidly in a number of major American cities. New York City has been particularly hard hit.
You may be wondering, as we are, when we’ll get to the other side of this crisis. The White House Coronavirus Task Force has asked all of us to commit to another 30 days to “Slow the Spread.” But what happens at the end of April? Reporters at the daily briefings often ask about this, and the President and the health policy experts advising him (Drs. Fauci and Birx) have not provided definitive responses. The reason for the vague answers is that far too much is still unknown.
Questions Without Answers
Consider the following. We don’t know fully understand how the virus is transmitted. We don’t know how many people are infected. We don’t know the percentage of infected people who will need hospitalization or intensive care, nor how many will ultimately die from the virus. Similarly, we don’t know the recovery rate. You can’t calculate percentages if you don’t know the denominator. Simple math.
We don’t know if a person who was infected and recovers can be reinfected. We don’t know if there is a seasonality to this virus. Will it fade away over the summer, only to reemerge in the fall? How do temperature and humidity affect the virus?
We don’t know the answers to most of these questions, because we still don’t know who is infected. Yes, more testing is better and President Trump claimed yesterday that the US has tested more people than any other country in aggregate, which is true, and per capita, which is false. But it’s still not enough.
Until we know the answers to these rather basic epidemiological questions, we won’t know how long we’ll need to physically separate people from each other. By the way, if you’d like to see a map of how the states are doing in terms of separating their residents, check out the Covid ActNow website. The western states got out in front of this crisis and, while it is far too early to celebrate, the projections are encouraging.
Because we don’t know how long we’ll need to keep the economy in this medically-induced coma, it’s very difficult to project with any accuracy when government officials, with the advice of health experts, will be able to re-open it. Fortunately, the federal government has taken massive monetary and fiscal action to provide emergency relief to workers, independent contractors, small businesses, large corporations, and non-profits. The total so far is about $6 trillion, which is unprecedented in US history.
Fighting a Fire
But, let’s go back to the issue: testing. The Director General of the World Health Organization, Tedros Adhanom, said recently that until we do far more robust testing around the world, we are “fighting a fire blindfolded.” We desperately need more accurate testing. Only when we have good data, will we be able to answer vital questions about the novel coronavirus, and only then we will truly understand the fire we are fighting.
Keep the faith, be safe, stay healthy.
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