By Martin Crutsinger, Washington USA
Scientists on Wednesday
announced the first effective treatment against the coronavirus — an
experimental drug that can speed the recovery of COVID-19 patients — in a major
medical advance that came as the economic gloom caused by the scourge deepened
in the U.S. and Europe.
The U.S. government said it is working to make
the antiviral medication remdesivir available to patients as quickly as
possible.
“What it has proven is that a drug can block
this virus,” said Dr. Anthony Fauci, the government’s top infectious-disease
expert. “This will be the standard of care.”
Stocks surged around the world on the news, with the Dow Jones
Industrial Average gaining more than 530 points on the day, or over 2%.
Still, word of the new
drug came as the U.S. government reported that American
economic output is shriveling in the biggest and fastest
collapse since the Depression.
The virus has killed over 220,000 people
worldwide, including more than 60,000 confirmed deaths in the U.S., and led to
lockdowns and other restrictions that have closed factories and other
businesses around the globe.
The U.S. said its gross domestic product, or
output of goods and services, shrank at an annual rate of 4.8% in the
January-March period, the sharpest quarterly drop since the global financial
meltdown of more than a decade ago.
And the worst is yet to
come: The Congressional Budget Office has estimated that the GDP of the world’s
biggest economy will plunge at a 40% annual rate during the three-month period
that ends in June.
The latest figures on people applying for
unemployment benefits in the U.S. come out Thursday, with economists estimating
perhaps 1 in 6 American workers, or nearly 30 million people, have lost their
jobs over the past six weeks.
The U.S. unemployment rate for April will be
released at the end of next week, and economists have said it could range as
high as 20% — a level last seen during the Depression.
Mario Franco, who worked at a McDonald’s at a
rest stop along Interstate 95 in Darien, Connecticut, for 26 years, rising to
night manager in charge of the kitchen staff, was laid off in late March. The
50-year-old said he has little savings and now relies on a food bank and union
donations.
“They didn’t give us any notice,” he said
through an interpreter. “They didn’t tell us about it. Just suddenly the night
shift ended and that was it. There was no more work.”
Amid the economic carnage, President Donald
Trump was pushing to reopen the country,
allowing federal social distancing guidelines to expire Thursday and even
saying he plans to travel to Arizona next week.
Trump who in recent weeks had predicted the
total U.S. virus death toll would come in at around the 60,000 milestone passed
Wednesday, laid out plans for returning to pre-virus normalcy despite doctors’
warnings that the country will need to embrace extended social distancing and
mask-wearing.
Confirmed infections globally reached about 3.2
million, including 1 million in the U.S., according to a tally by Johns Hopkins
University. The true numbers of deaths and infections are believed to be much
higher because of limited testing, differences in counting the dead and
concealment by some governments.
California-based biotech company Gilead
Sciences and the U.S. government reported that in a major study, remdesivir
shortened the time it takes for COVID-19 patients to recover by four days on
average — from 15 days to 11. Also, a trend toward fewer deaths was seen among
those on the drug, Fauci said.
The study was run by the U.S. National
Institutes of Health and involved 1,063 hospitalized coronavirus patients
around the world.
An effective treatment could have a profound
effect on the outbreak, since a vaccine is probably a year or more away.
Economic damage, meanwhile, is piling up around
the world.
The United Nations’ main labor body predicted
the world will lose the equivalent of about 305 million full-time jobs in the
second quarter.
It also projected that 1.6 billion workers in
the “informal economy,” including those working beyond the reach of the
government, “stand in immediate danger of having their livelihoods destroyed.”
That is nearly half the global workforce of 3.3 billion people.
In Europe, almost every measure of the economy
is in free fall. Figures due to be released Thursday are expected to show a
drop of about 4% in the first three months of the year in the eurozone, and an
even steeper hit is projected this quarter. Unemployment is expected to rise to
about 8%.
The figure would be worse if not for massive
amounts of government aid to keep millions of workers on payrolls. Government
debt is exploding to cover the costs of such relief.
“The lockdowns to contain the COVID-19 pandemic
are taking an unprecedented toll on the European economy,” said Florian Hense,
an economist at Berenberg Bank.
In Paris, aircraft maker Airbus reported
a first-quarter loss of 481 million euros ($515 million), laid off thousands of
workers and sought billions in loans to pull through the crisis. U.S.-based
rival Boeing said it is cutting 10% of its workforce and reducing the
production rate of commercial jets.
Italy’s credit rating was lowered in the first
downgrade of a major economy as a result of the crisis. Its rating stands just
one level above junk bond status. Italy expects its economy to shrink 8% this
year.
Germany’s economy minister said the government
is projecting a contraction of about 11% in GDP by the end of the quarter. But
he also predicted a sharp recovery in 2021.
Many economists are
skeptical the U.S. economy will bounce back quickly later in the year, noting
that the virus could flare up again or consumers and employees might be too
worried to return to business as usual.
“The virus has done a lot of damage to the
economy, and there is just so much uncertainty now,” said Mark Zandi, chief
economist at Moody’s Analytics.
With the crisis easing in places like Italy,
France and Spain, European governments are making adjustments in their transportation
networks to try to get their economies running again without
setting off a second wave of infections.
In Italy, Milan is putting red stickers on the
floor to tell bus passengers how far apart to stand. The Dutch are putting on
longer, roomier trains. Berlin and many other cities are opening up more lanes
to bicyclists. And in Britain, bus passengers are using the middle or rear
doors to reduce the risk to the driver. - AP
