Data stresses urgency for healthy reopenings

Data that came out last week illustrated three developments that underscore the need for the US to resume healthy reopenings: worrisome Covid-19 infections, hospitalisations and deaths in a growing number of states; the clear and present risk of significant recurring damage to the economy; and the considerable upside of reversing both trends quickly. What is desirable is also feasible, although the window to avoid even more significant short and longer-term damage could well be closing in the absence of quick government relief and reform measures and — critically — changes in behavior by citizens.
With some states setting records for the number of daily deaths, a growing number of Americans are losing their lives to a virus that continues to spread nationally. Moreover, the data show that families from the most disadvantaged segments of the population, already facing precarious income situations or vulnerability to social injustices or both, are accounting for an ever growing portion of the pain and suffering.
And with the virus still on the move geographically, impacting some states that were relatively spared until now and others that had impressively overcome an initial wave, there is increasing doubt as to the ability to effectively insulate and protect the least affected parts of the country.
The economic devastation was also clear last week. On an annualised basis, the country’s gross domestic product contracted by
an astounding one-third in the second quarter. Meanwhile, the
much-hoped-for V-shaped recovery seems to be stalling given rising weekly initial jobless claims, worsening continuing claims and the leveling off or decline in what has now become a widely followed set of specific indicators of daily economic activity.
Yet not all of the numbers released last week were flashing yellow and red. The June consumer spending data in particular pointed to the US economy’s potential to bounce back rapidly under a healthy reopening — that is, simultaneous progress in getting the virus under control and increasing economic interactions pending some combination of an effective vaccine and community immunity. This process would halt an increasingly damaging and unstable dynamic in which the pendulum swings between premature reopenings that prove to be both unhealthy and unsustainable on one end and restrictions on economic activity on the other that, while reducing the risk of Covid infection, risk inflicting on more people both economic devastation and an even bigger threat of “deaths of despair,” as documented by economists Anne Case and Angus Deaton.
The bad news is that the longer the pendulum swings in this manner, the greater the damage to lives and livelihoods in both the short and longer terms. In the short term, this would be reflected in
too many hospitalisations, deaths, bankruptcies and evictions, as well as a growing risk of domestic violence and suicide etc.

—Bloomberg