We’ll be Social Distancing Until July, 2020
I’ve been listening to state Governors in the U.S. and provincial heads in Canada about what they are saying to their constituents. What’s clear is that it differs greatly from the U.S. Federal and Presidential PR and rhetoric — since North America was last to test, contain and mitigate.
It’s not by accident the Canadian Emergency Response Benefit (CERB) is for 4 months. So how long will we be social isolating? I believe it will be at least until July, 2020. And in the fall we’ll be at it again as infections pick up again, since it’s a highly contagious virus.
Essentially flattening the curve just slows it down and saves lives until we have a vaccine. For the U.S. the question becomes economic, that is; how long can a nation of 327 million people endure with work and schools closed, lost jobs, and people still dying from a pandemic with no proven treatment?
The answers is basically until unemployment reaches 20%. The new coronavirus has brought American life to a near standstill, closing businesses, canceling large gatherings, and keeping people at home. All of those people must surely be wondering: when will things return to normal?
The peak for many states will actually be in May, 2020, so there’s no way we’ll be returning to work up to one month after the peak. To make sure, we’ll likely only be bringing the economy back online for Independence Day. The recent estimate by the Coronavirus Task Force that we’ll see between 100,000 and 240,000 deaths in the U.S. due to covid-19 is based on optimistic modelling.
In short, Donald Trump won’t be able to save the stock market and we’ll see the Fed actually buying stocks. We’ll see a hitting of the reset button in travel, tourism, hotel, retail, box office and tons of other related industries. Travel will be completely shut down. Small businesses and startups will make the ultimate sacrifice: they’ll die to save some of us.
If social distancing is the new normal, grocery delivery and working from home will become a permanent transition for many of us. Retail will be reforged, and restaurants will turn to cloud kitchen models.
We won’t be going back to work in April, or May, or June. The U.S. added 30 days to the shutdown, but from the U.K. to Canada to California, we are all coming to realize it will be 90 more days at least of physical social distancing. While Taiwan, China and Singapore have flattened the curve, the West is paying the price for a huge lack of health care preparedness and poor leadership. It’s also paying the price for Chinese misinformation.
According to a new report by the U.S. intelligence community, it’s official: China hid key facts as to the spread of the new coronavirus. The West didn’t just fail in testing, it failed in contact tracing, wearing masks (which breaks chains of asymptomatic transmission) and limiting economic damage that is now being compared to the Great Depression of the 1930s. China obscured the real data on how dangerous Covid-19 would become for the entire world and could be directly responsible for $Trillions of dollars in losses.
The coronavirus economic freeze could cost 47 million jobs and send the unemployment rate past 32%, according to St. Louis Fed projections.
Many Americans would not have been able to pay their rent today, April 1st, 2020. What 90 days more of social distancing means is the end of careers and unemployment rates the likes of which we have never seen for millions of people in North America and Europe.
Since there will be several waves of Covid-19 before a vaccine is found, will it be worth opening up the economy for just July and August as new cases emerge in the fall? It will be important to improve moral, social stability and energize people to prepare for the rest of 2020 until a vaccine is found. Life wont’ be the same, but it will be worth it.
- The U.S. labor force reached a high of 164.6 million persons in February 2020
- In the first week after the pandemic hit, 3.3 million filed for unemployment benefits.
- This week another 3 to 9 million are expected to have done the same as we head into April. (5.6 million is the mean estimate).
- The stock market should test March’s lows since the majority of job losses will take place in April, as over 2,300 people a day could die in the U.S. at the peak death rate. This is when the health system falls apart.
The call to stay isolated will likely last for months, in my calculations until July, 2020. This may differ slightly in some U.S. states, some of which lag behind.
In Toronto, on April 1st we found out it will last 12 more weeks. The credibility of deadlines Donald Trump has given obviously will be broken as more Americans begin to not respect social distancing norms the further we get along.
The pandemic is a public health crisis and a financial shutdown that impacts everybody. Social distancing will continue and U.S. states that don’t lock down at all (.e.g. Florida/Texas) will be worse off than Italy or Spain. Brazil, Sweden and the UK are good examples of what happens when you are late in social distancing.
In a fractured and horrific Federal response, as of April 1st, Alabama, Florida, Mississippi, Oklahoma, South Carolina, and South Dakota have ignored calls from public health experts to institute strict social distancing measures.
The problem for the rest of us is how many of us will lose our jobs? Unemployment rates doubling is an optimistic estimate. 100,000 deaths is an optimistic guess-estimate.
Today the U.S. reached over 200,000 infections as I had predicted. 215.4 thousand at last count. But there aren’t enough ventilators, medical equipment and medical staff, although make-shift hospitals built at the last minute will help. The U.S. could have averted a pandemic, had it been ruthless like Taiwan or smart like South Korea.
In 2020, China and the U.S. economy will both be in recession, and this means a global recession for at least 2020 — with a U-shaped or perhaps even an L-shaped recovery.