US states move to reopen as virus job losses mount

The Trump administration is talking up the chance of a summer rebound in the US as a clutch of state governors take steps to reopen their economies to stem catastrophic job losses caused by coronavirus lockdowns.

US Treasury secretary Steven Mnuchin said the economy was going to “really bounce back” in summer, citing efforts to reopen parts of the country and the impact of “unprecedented” fiscal relief worth trillions of dollars. 

“As we begin to reopen the economy in May and June, you’re going to see the economy really bounce back in July, August, September,” he told Fox News Sunday

The US has recorded more than 940,000 cases of coronavirus and more than 54,000 deaths. Advice from the Centers for Disease Control and Prevention is to lift restrictions only once the state and regional hospitalisation rate has recorded a decline for 14 days in a row. 

But states across the political divide, including Colorado, which has a Democratic governor, and Maryland, under a Republican, have committed to sending the workforce back early.

“I want to get our economy back opened just as soon as we can,” Larry Hogan, the Republican governor of Maryland, told ABC News on Sunday, despite recording near-record deaths on Friday.

He argued that while deaths and new cases were still rising, the number of hospitalisations and critical care requirements across neighbouring Washington DC, Maryland and Virginia were tailing off.

The decision by Mr Hogan, who also chairs the National Governors Association, comes amid criticism that states such as Georgia and Oklahoma are reopening too soon.

Jared Polis, the Democratic governor of Colorado, said he respected the decision of his own state capital Denver to extend lockdown orders even as he gave the go-ahead for the rest of his state to go back to work with reduced staffing from May 3. He said that while some counties had recorded zero cases of coronavirus, Denver had experienced a much more significant outbreak, affecting 5 per cent of the population.

New York governor Andrew Cuomo said he would look at loosening some restrictions after May 15.

Dr Deborah Birx, the co-ordinator of the White House coronavirus task force, urged states to ramp up testing to find new cases of the virus as they start to reopen their economies.

“We . . . have to diagnose the virus before it is evident in communities,” she told CNN on Sunday. She added that states needed to pay particular attention to places where the virus could otherwise spread undetected such as inner-city clinics, care homes and prisons.

Kevin Hassett, senior economic adviser to Donald Trump, injected a note of urgency, saying the US was undergoing “the biggest negative shock” the US economy had seen since the second world war.

He claimed that while the virus affected only hotspots throughout the country, the uniform nature of the lockdowns had brought the economy to a nationwide standstill.

“[You] have to understand that this is an unprecedented shock to the economy, that we’re going to be looking at second-quarter negative GDP growth that’s probably north of -15, -20 per cent,” he told ABC News on Sunday.

Editor’s note

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The economist, formerly chairman of the Council of Economic Advisers, said US job losses far outstripped levels seen in the 2008 financial crisis.

“During the Great Recession, remember that was a financial crisis around 2008, that we lost 8.7m jobs and the whole thing. Right now, we’re losing that many jobs about every 10 days,” he said.

“A lot will depend on what happens next,” he said. “I think markets are hopeful that we could get the V-shaped recovery that the president is hoping for,” he added.

In order to achieve this, he said, everyone would have to pull together over the next three or four weeks to build on recent bipartisan support for a series of stimulus packages and “come up with a plan to give us the best chance possible for a V-shaped recovery”.

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