The White House Coronavirus Task Force explaining the phased opening of the economy
Yesterday the Trump Administration announced its “Guidelines for Opening Up America Again.” The President indicated that governors and local officials will have great discretion as they move through the entry gate and three distinct phases.
The gating criteria that should be met before moving into the three phases include:
- A downward trajectory of influenza-like illness reported within a 14-day period, AND a downward trajectory of Covid-19-like syndromic cases reported within a 14-day period.
- A downward trajectory of documented cases within a 14-day period, OR a downward trajectory of positive tests as a percent of total tests within a 14-day period.
- A health care system that allows for the treatment of all patients without crisis care, AND a robust testing program in place for at-risk health care workers, including emerging antibody testing.
Once a state has satisfied the initial gating criteria, it can progress to Phase One:
- All vulnerable people should continue to shelter in place.
- All individuals, when in public, should maximize physical distance from others. Social gatherings of more than 10 people should be avoided unless proper physical distancing is possible.
- Individuals should minimize non-essential travel.
- There are additional criteria for employers.
In Phase Two:
- All vulnerable individuals should continue to shelter in place.
- All individuals, when in public, should maximize physical distance form others. Social gatherings of more than 50 people should be avoided unless proper physical distancing is possible.
- Individuals can resume non-essential travel.
- There are additional criteria for employers.
In Phase Three:
- Vulnerable individuals can resume public interactions, but should practice physical distancing.
- Lower-risk populations should consider minimize time spent in crowded environments.
- Restrictions on employers are lifted with certain exceptions.
It remains to be seen how states will enter into the gating process and begin Phase One. It is apparent that states will enter at different times based on their unique circumstances. Several states have banded together to synchronize re-opening, including Washington, Oregon and California.
Testing is Vital
We continue to believe that the key to relaxing the current strong lockdown measures is robust testing, isolation and care of those who are infected, contact tracing and quarantining. We obviously need a vaccine and therapeutics. But it is not realistic to keep the economy in this coma-like state waiting for that. The damage, as we’re beginning to see, would simply be too great.
The President consulted corporate executives in what the administration called “Great American Economic Revival Industry Groups.” They consistently told him the same thing. There is a need for far more testing.
The transition from the strict social distancing cannot happen soon enough for the battered American economy. A slew of economic data for the month of March was released yesterday and it was sobering:
- US retail sales fell 8.7%
- Auto sales dropped 25.6%
- Clothing sales declined 50.5%
- Restaurant and bar sales fell 26.5%
- Manufacturing dropped 6.3%
- US industrial production declined 5.4%
These are staggering numbers, and they are even more disturbing because the economic shutdown did not really begin until the latter half of March. April’s numbers will likely be even worse.
Oil prices have plummeted because of a turf war between Saudi Arabia and Russia, and a collapse in global demand. In a stunning development, the Wall Street Journal reported that producers may actually pay purchasers to take oil, because producers cannot shut down production fast enough and they have nowhere to store the oil they’re pumping.
Last week another 5.2 million Americans filed for state unemployment benefits, according to the Labor Department. In the past four weeks, 22 million Americans, roughly 13% of the work force, have applied for benefits.
The International Monetary Fund expects the global economy to shrink by 3% in 2020. This is the largest drop in economic activity since the Great Depression.
Yesterday the Dow Jones Industrial Average was down 97 points, or 0.41%. The S&P 500 Index was up 16 points, or 0.68%. The markets will continue to react, sometimes wildly, to new information about the novel Coronavirus.
Getting it Right
We hope that government officials will proceed with great caution as they relax the Covid-19-related restrictions. FEMA (the Federal Emergency Management Agency) and the CDC (the Centers for Disease Control and Prevention) have warned that a “large rebound curve” looms if mitigation efforts are relaxed before a vaccine is developed and distributed broadly and community immunity is achieved.
We wish you health, peace and happiness.
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