Markets showed signs of being pacified (albeit probably temporarily) on Friday, but the pandemic could be entering a perilous new phase, both from a public health perspective and economically.
The World Health Organization is palpably concerned that the virus is infecting people at a much faster clip.
The global case count is above 200,000, and while it took three months to get to 100,000 infections, it took just 12 days for that initial 100,000 to double. More disconcerting still is the fact that the 200,000 figure was through Thursday. By Friday, there were 239,000 infections, suggesting the situation is accelerating markedly.
California is, of course, under a statewide lockdown – mercifully, folks can still buy groceries.
Apparently, 56% of people in the state are likely to get infected over an eight-week period, which is disconcerting to say the least. That means nearly 26 million people with have COVID-19 in California within two months. Later, an official said that projection assumes zero mitigation efforts — so, it’s like Steve Mnuchin’s 20% unemployment non-prediction.
Meanwhile, New York City is set to run out of medical supplies within a month, Bill de Blasio told CNN. Specifically, the city needs 50 million surgical masks, 25 million hospital gowns and 15,000 ventilators. So, in case you happen to have that kind of inventory stashed in your backyard doomsday bunker, now would be a good time to donate some to the city that never sleeps.
The following chart is going to look much, much scarier in the weeks ahead, and I should emphasize that I’m not doing anything other than paraphrasing and summarizing what medical professionals and the Trump administration’s own virus task force have said (in no uncertain terms) over the past week.
If you want to get a sense of the economic devastation the containment measures are already wreaking across the services sector, have a look at this visual:
So, that’s from OpenTable, and it shows year-over-year seated diners at restaurants in the company’s network across all channels: online reservations, phone reservations, and walk-ins.
In a word, it’s catastrophic – the restaurant industry effectively doesn’t exist in the US as of this week. Globally, it’s the same story:
“As the COVID-19 pandemic keeps people home and some cities, states, and countries limit restaurant operations, our community of nearly 60,000 restaurants faces unprecedented challenges”, OpenTable said, in a statement.
Commenting on the OpenTable data, SocGen notes that the collapse isn’t really the surprising part. Rather, “what really stands out for me is the speed of the decline — 2 weeks ago there were a bit soft, now they are frozen solid”, the bank’s widely-followed FX strategist Kit Juckes remarked. “Estimates of unemployment claims in the coming weeks are equally dire”.
Speaking of unemployment claims, the Trump administration is imploring states to delay reporting in order to avoid causing a panic.
According to a Wednesday e-mail seen by The New York Times, the Labor Department ordered state officials “to do nothing more than ‘provide information using generalities to describe claims levels (very high, large increase)’ until the department releases the total number of national claims next Thursday”.
“[These numbers] are monitored closely by policymakers and financial markets to determine appropriate actions in light of fast-changing economic conditions” and should therefore be kept secret until the Labor Department’s report, the e-mail suggests.
That’s pretty flagrant and smacks of desperation. Weekly jobless claims jumped the most since 2012 last week and you can expect the numbers to get exponentially worse going forward.
In a harbinger of what’s coming, Ohio’s Department of Job and Family Services released figures in an emailed statement on Friday morning.
Jobless claims in the state from Sunday through Thursday were 139,468. A week ago, they were 4,815.