April 26, 2020 / 3:45 PM / a month ago

Next wave of U.S. states set to reopen as coronavirus could push jobless rate to 16%

NEW YORK/CHICAGO (Reuters) - Another wave of states prepared to ease coronavirus restrictions on U.S. commerce this week, despite health experts warning there is still too little diagnostic testing, while the White House forecast a staggering jump in the nation’s monthly jobless rate.

Colorado, Mississippi, Minnesota, Montana and Tennessee were set to join several other states in reopening businesses without the means to screen systematically for infected people who may be contagious but asymptomatic, and to trace their contacts with others they might have exposed.

Many merchants have voiced ambivalence about returning to work absent the prerequisite public health measures authorities have advocated.

“I would stay home if the government encouraged that, but they’re not. They’re saying, ‘Hey, the best thing to do is go back to work, even though it might be risky,’” Royal Rose, 39, owner of a tattoo studio in Greeley, Colorado, told Reuters.

Rose said she was reopening her shop after closing a month ago, not because she wants to but because bills are piling up and she feels she has no choice.

Georgia, Oklahoma, Alaska and South Carolina have already forged ahead to restart their economies following weeks of mandatory lockdowns that have thrown nearly one in six American workers out of their jobs.

Public health authorities say increasing human interactions and economic activity now - without the means to do so safely - will only backfire, sparking a new surge of infections just as social-distancing measures appear to be bringing coronavirus outbreaks under control.

Medical experts say strict adherence to business closures and stay-at-home orders imposed over the past several weeks by governors in 42 of 50 states have worked to level off rates of hospitalizations and admissions to intensive care units.

Still the number of known U.S. infections climbed higher on Sunday, topping 960,000 as the number of lives lost to COVID-19, the highly contagious respiratory illness caused by the virus, surpassed 54,700.

The continuing rise in the number of U.S. cases has been attributed in part to increased diagnostic screening. But health authorities also warn that testing and contact tracing must be vastly expanded before shuttered businesses can be safely reopened on a wide-scale basis.

‘TERRIBLE’ TOLL ON JOBS

The economic fallout from the unprecedented social distancing requirements has been devastating.

Business shutdowns have led to a record 26.5 million Americans filing for unemployment benefits since mid-March. The nonpartisan Congressional Budget Office predicted on Friday that the economy would contract at an annual rate of nearly a 40% in the second quarter.

Even next year, the CBO forecast calls for an unemployment rate averaging above 10%. Before the pandemic struck, the U.S. jobless rate was hovering at a 50-year low of 3.5%.

People wear face masks waiting outside a beauty salon and check cashing facility as the coronavirus disease (COVID-19) continues to spread, in the Highland Park section of Detroit, Michigan U.S., April 25, 2020. REUTERS/Shannon Stapleton

White House economic adviser Kevin Hassett told reporters on Sunday the jobless rate would likely hit 16% or more in April.

“I think the next couple of months are going to look terrible,” Hassett said. “You’re going to see numbers as bad as anything we’ve ever seen before.”

Against a backdrop of scattered protests across the country calling for stay-at-home orders to be lifted, some of the states hardest hit by the public health crisis were taking a more cautious approach to economic reopenings.

New York state, the U.S. epicenter of the pandemic, reported 367 new deaths on Sunday, its lowest loss of life in a single 24-hour span since March 20, but has extended its business restrictions through mid-May.

Democratic Governor Andrew Cuomo said construction and manufacturing would be the first workplaces permitted to reopen and could restart after May 15 in the upstate region with certain precautions and if cases continue to decline.

By and large the states forging ahead with reopenings this week are concentrated in the South, the Midwest and mountain West, where outbreaks have been far less severe than in the Northeast. Most are led by Republican governors.

Tennessee said it will allow restaurants to reopen on Monday. Mississippi’s stay-at-home order expires the same day.

Montana, which reported three new cases on Sunday, is allowing businesses to reopen Monday if they limit capacity and practice social distancing, while Minnesota is clearing the way for 80,000 to 100,000 workers in industrial and office jobs to return to work on Monday.

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In Colorado, Democratic Governor Jared Polis has given the green light for retail curbside pickup to begin on Monday. Hair salons, barbershop and tattoo parlors can open on Friday, with retail stores, restaurants and movie theaters to follow.

Even within states, the lifting of restrictions may vary from place to place. Denver, for example, extended stay-at-home orders to May 8 but city dwellers can drive to a nearby county for a haircut. Georgia, on the other hand, has prohibited any local measures stricter than the state orders.

Eight states never ordered residents to stay at home — Arkansas, Iowa, Nebraska, North Dakota, Oklahoma, South Dakota, Utah and Wyoming.

Opinion polls have generally shown a bipartisan majority of Americans want to remain at home to protect themselves from the coronavirus, despite the impact to the economy.

Reporting by Nick Brown in New York and Brendan O'Brien in Chicago; Additional reporting by Tim Ahmann in Washington and Maria Caspani in New York; Writing by Lisa Shumaker and Steve Gorman; Editing by Daniel Wallis

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