ATLANTA — Governors facing growing pressure to revive economies decimated by the coronavirus said on Sunday that a shortage of tests was among the most significant hurdles in the way of lifting restrictions in their states.
“We are fighting a biological war,” Gov. Ralph Northam of Virginia said on “State of the Union” on CNN. “We have been asked as governors to fight that war without the supplies we need.”
In interviews on Sunday morning talk shows, Mr. Northam was among the governors who said they needed the swabs and reagents required for the test, and urged federal officials to help them get those supplies.
The governors bristled at claims from the Trump administration that the supply of tests was adequate. On NBC’s “Meet the Press,” Vice President Mike Pence said “there is a sufficient capacity of testing across the country today for any state in America” to go to the first of three phases that the administration says are needed for the country to emerge from the coronavirus shutdown.
Mr. Northam, a Democrat, called Mr. Pence’s claim “delusional.” In Michigan, Gov. Gretchen Whitmer, also a Democrat, said the state could perform “double or triple” the number of tests it is doing now “if we had the swabs or reagents.” Gov. Larry Hogan of Maryland, a Republican, said that it was “absolutely false” to claim that governors were not acting aggressively enough to pursue as much testing as possible.
“It’s not accurate to say there’s plenty of testing out there, and the governors should just get it done,” Mr. Hogan said on “State of the Union.” “That’s just not being straightforward.”
The conflicting messages come as the debate over how and when to reopen the economy has intensified. President Trump on Saturday expressed his confidence in the nation’s testing capability and said some governors have “gotten carried away,” while state officials said they feared moving too early could cause the virus to flare again.
“As tough as this moment is,” Ms. Whitmer said in an interview with CNN, “it would be devastating to have a second wave.”
Officials at every level have faced increasingly competing pressures, balancing maintaining stay-at-home orders against the exasperation and economic toll they are producing. On Saturday and Sunday, modest protests took place in several cities across the country, where demonstrators flouted social distancing rules as they demanded that restrictions be relaxed.
Yet there was also a widespread sense that much of the public understood the governors’ concerns and shared them. Nearly 60 percent of American voters said they were worried that measures would be relaxed too soon, causing deaths to rise, according to a new poll from NBC News and The Wall Street Journal.
Officials in various states said they had started staging plans for reopening their economies and were working in concert with neighboring states in determining when to lift restrictions.
In South Carolina, Gov. Henry McMaster said that he had spoken with the governors of other southeastern states, including Florida and Tennessee. “Told them South Carolina was ready,” Mr. McMaster, a Republican, said on Twitter on Saturday.
On Sunday, governors from across the Northeast, including New York, New Jersey, Connecticut and Pennsylvania, said they were creating a regional council focused on restoring the economy and addressing unemployment.
Still, many governors, including Andrew M. Cuomo of New York and Philip D. Murphy of New Jersey, said that testing still needed to be ramped up considerably before moving forward, and that they needed federal help to do so.
There are currently about 150,000 diagnostic tests conducted each day, according to the Covid Tracking Project. Researchers at Harvard estimated last week that in order to ease restrictions, the nation needed to at least triple that pace of testing.
Mr. Trump, however, said in a news conference on Saturday that he was confident in the federal response. “America’s testing capability and capacity is fully sufficient to begin opening up the country totally,” he said.
Dr. Deborah Birx, the coronavirus response coordinator for the White House, also pushed back against criticism that not enough people were being tested, saying that not every community required high levels of testing and that tens of thousands of test results were probably not being reported.
“We need to predict community by community the testing that is needed,” Dr. Birx said Sunday on CBS’s “Face the Nation.” “Each will have a different testing need, and that’s what we’re calculating now.”
On the ABC program “This Week,” Dr. Birx said she thought statistics on testing were incomplete: “When you look at the number of cases that have been diagnosed, you realize that there’s probably 30,000 to 50,000 additional tests being done that aren’t being reported right now.”
Shortages of supplies have restricted the pace of testing, according to commercial laboratories. Dr. Birx said that a team at Walter Reed National Military Medical Center was calling hundreds of labs around the country to determine exactly what supplies they need “to turn on full capacity, which we believe will double the number of tests that are available for Americans.”
In the news conference, Mr. Trump said the criticism of the administration was driven by Democrats. “Unfortunately, some partisan voices are trying to politicize the issue of testing,” he said.
Yet, Gov. Jay Inslee of Washington noted that governors from both parties had been among those voicing frustration over a lack of federal support with testing. He also criticized what he saw as a discordant message from Mr. Trump, which, he argued, undermined governors’ stay-at-home orders and inspired “people to ignore things that actually can save their lives.”
“These orders actually are the law of these states,” Mr. Inslee, a Democrat, said in an interview with “This Week.” He added: “And, again, these are not just Democrats. These are Republican-led states as well. To have an American president to encourage people to violate the law, I can’t remember any time during my time in America where we have seen such a thing.”
Now, with states transitioning away from addressing the peak of the pandemic, governors stand to face a difficult landscape to navigate.
Governors across the political spectrum have stepped into the spotlight during the coronavirus crisis, holding daily news briefings and going back and forth with the president. But if they drew praise for taking quick action to protect public health, taking responsibility for when and how to reopen could prove far more politically perilous, said Ray Scheppach, a public policy professor at the University of Virginia and a former longtime executive director of the National Governors Association.
“That is one of the reasons you’re seeing groups of governors and states get together,” he said, noting the alliances made by clusters of governors around the country.
“Doing something with the surrounding states does give you a certain amount of political cover,” both with constituents and the White House, Professor Scheppach said. “They don’t want to get pushed around by this president and they are stronger in a group.”
Having claimed responsibility for reopening the country, governors are now offering hesitant timelines. Offering no date for reopening may leave people feeling despondent at a time when “people need more certainty as opposed to less,” Professor Scheppach said. But being too firm comes with the risk of having to push out deadlines and test the public’s patience.
“You can do it once,” he said, as Mr. Cuomo and others have done. “But you begin to lose if you do that two or three times.”
Governors said they had become acutely aware of the dilemmas they face.
In his appearance on CNN, Mr. Hogan was shown footage of a long line winding around a supermarket in a Maryland suburb of Washington where free food was being handed out. The video was an unsettling avatar of the economic damage wrought by the virus. He said he shared in the frustration over the economy, but he also noted that his state had not yet reached its peak in cases.
“My goal is to try to get us open as quickly as we possibly can,” he said, “but in a safe way.”
Abby Goodnough, Vanessa Swales and Sarah Mervosh contributed reporting.
The US will need to spend trillions more as economy takes until 2022 to fully recover: CNBC survey – CNBC
The economy could take one to two years to rebound to full strength and the Federal Reserve and Congress, having already committed historic sums to fight the coronavirus pandemic, will have to commit trillions more, according to respondents to the CNBC Fed Survey.
With the Federal Reserve’s balance sheet already at an unprecedented $6.45 trillion, the 36 respondents see it rising on average to $9.8 trillion. The additional trillions will be added by the end of the current quarter, the respondents expect. Congress, having already committed about $2.5 trillion, is seen putting in an additional $2 trillion.
“My guess is that the virus itself will largely disappear within a year, but that the structural social and economic impacts will be with us much longer,” John Kattar, chief investment officer at Ardent Asset Management, wrote in response to the survey.
Jack Kleinhenz, chief economist for the National Retail Federation, said, “The policy response has been appropriate, but policy takes time to work its way into the economy and targeted sectors. … Many small businesses stand at risk.”
Despite the massive relief, respondents still see the unemployment rate rising to 19%, hitting that level in August. It’s expected to decline only gradually, to 11% by December and to 7% by the end of 2021. That would leave it at about double the rate before the crisis.
Second quarter of 2022
“With spiking unemployment and rising business closures … the prospects of a sharp rebound (is) far outweighed by the more realistic prospect of a longer-term structural disruption,” said Lindsey Piegza, chief economist at Stifel.
A 33% plurality believes the economy won’t be fully restored until the second quarter of 2022. But 19% believe it will be back by year-end and another 19% believe it can happen even earlier, highlighting a wide range of views about the speed and strength of a recovery.
“During the pandemic, production and consumption have been largely deferred and not lost,” wrote Rob Morgan, director of market strategy at US Energy Advisors. “This leads me to believe the economy will experience a V-shaped recovery beginning in the third quarter 2020.”
On average, respondents see gross domestic product falling by 24% this quarter, followed by a rebound of 4.7% in the third quarter and another strong quarter in the fourth. It won’t be enough to make back the losses in the first half. For the full year, GDP is forecast to decline by 5%.
Mark Zandi, chief economist at Moody’s Analytics, said a vaccine is essential for the economy to gain traction. “Until then, any recovery will remain something of a slog, characterized by halting growth and high single-digit unemployment. And even then, the economy won’t be in full swing and fully recovered until mid-decade.”
The Fed funds rate is seen remaining at zero for the rest of the year and rise to 1.9% in 2021. The Federal Reserve concludes its two-day policy meeting on Wednesday. Answers for CNBC’s Fed Survey from investors and economists were collected Thursday to Saturday.
The S&P is forecast to finish lower on the year at 2,844 than Monday’s close, and rise to 3,141 next year for a 9% gain by the end of 2021.
“I think the risk markets are anticipating a faster return to normalized economic conditions than we are likely to see,” says John Ryding, chief economic advisor at Brean Capital LLC.
Among the risks: Respondents place a 61% probability on a second round of contagion in the fall and winter.
White House reportedly considering another round of stimulus checks – Atlanta Journal Constitution
As the U.S. economy slowly reopens, Americans across the country are still grappling with job loss, furloughs and economic uncertainty. To combat the continued financial struggles some are facing, a White House official says the administration is “studying carefully” another $1,200 payment to citizens.
White House economic adviser Kevin Hassett told the media the administration is determining whether to provide those who qualify another round of stimulus checks, according to NBC News reporter Geoff Bennett. The additional financial support could be included in a phase 4 deal.
No word on when the package would be presented the House, but, with the virus still looming, House Majority Leader Steny Hoyer told the media Tuesday that the House will no longer come back next week after speaking to House physician, according to a tweet by Politico congressional reporter Sarah Ferris.
“We made a judgment that we will not come back next week,” Hoyer told reporters.
While the new stimulus checks are being considered, some Americans have not yet received the first round of checks. The IRS began cutting stimulus checks in mid-April. As of this week, about 90 million people have seen the economic bump in their accounts, according to economic news site Market Watch.
The hope is that the checks, which average about $1,200 a piece, will encourage spending and quell the financial pressure to pay essential bills as the COVID-19’s impact has shuttered manufacturing plants, retail stores and limited business hours for dozens of companies.
The IRS had distributed about 88.1 million stimulus checks as of April 17 and paid out $157.96 billion, according to statistics released April 24. That’s more than half of the $290 billion put aside for direct payments to individuals in the $2.2 trillion bill called the CARES Act.
Consumer confidence is still low
The Conference Board Tuesday reported that its consumer confidence index tumbled in the month of April, as millions lost their jobs and others feared for the current and future work conditions.
The Conference Board said Tuesday that its confidence index plunged to a reading of 86.9, down from 118.8 in March. The index is composed of consumers’ assessment of present conditions and expectations about the future.
The present conditions index dropped from 166.7, to 76.4, a 90-point drop that was the largest on record. The expectations index, based on the future outlook, improved slightly from 86.8 in March to 93.8 in April.
The numbers in the present conditions index “reflects the sharp contraction in economic activity and surge in unemployment claims,” said Lynn Franco, senior director of economic indicators at the Conference Board.
Kathy Bostjancic, chief U.S. financial economist at Oxford Economics, said the confidence declines were worrisome because “consumers’ downbeat views about future income prospects can restrain consumer spending and the overall economy.”
Consumers drive about 70% of all economic activity in the U.S.
Many economists believe the country has already entered a recession that will be the largest economic disruption since the Great Depression of the 1930s.
The Associated Press contributed to this report.
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Goldman Sachs explains why stocks can keep rising even as a record-sized recession beckons – Business Insider
Drew Angerer/Getty Images
- Markets may continue to look past negative coronavirus news, especially if projections continue to show that the economy is expected to rebound after the pandemic, a Monday note from Goldman Sachs said.
- An analysis of GDP forecasts from the bank found that investors tended to discount the next two years of macroeconomic performance.
- Thus, metrics that focus only on growth over the next year “will overstate current valuations, given the large rebound expected beyond this year,” Zach Pandl, a cohead of global FX and EM strategy, wrote in the note.
- Read more on Business Insider.
Markets may continue to look past negative coronavirus news, especially if projections continue to show that the economy is expected to rebound after the pandemic, according to Goldman Sachs.
An analysis by the bank using changes to gross-domestic-product forecasts found that investors typically discounted at least the next two years of macroeconomic performance, a Monday note said.
That means that metrics that focus only on growth over the next year — such as multiples based on 12-month earnings expectations — “will overstate current valuations, given the large rebound expected beyond this year,” Zach Pandl, a cohead of global foreign-exchange and emerging-markets strategy, wrote in the note.
While the coronavirus-induced recession is set to be the deepest contraction in modern history, it’s also likely to be the shortest, Pandl said. Many economists expect that, after a dip in 2020, GDP will rebound in 2021 and 2022. By early April, consensus GDP forecasts incorporated a virus hit, down 4% this year. But forecasts are for 4% growth in 2021 and 3% in 2022 — an unusual pattern, Pandl said.
That means that more disappointing data in the near term may not weigh heavily on markets, as activity is expected to snap back “relatively quickly,” Pandl wrote. “The depth of the downturn matters much less than the duration of the recovery,” he said.
Goldman’s analysis came amid a stock-market recovery from March 23 lows. As US states weigh relaxing strict lockdown measures designed to curb the spread of COVID-19, stocks have slowly gained on optimism that the economy will soon reopen. From March 23 to Monday’s close, the S&P 500 gained about 29%, but it was down about 15% from all-time highs in February.
Still, many economists disagree that any rebound after the coronavirus pandemic will be a quick one. Instead of the sharp V-shaped recovery that Goldman is suggesting, many expect a rebound to take a softer U shape.
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