America’s growth streak is over: The economy shrank 4.8 percent, and the worst is yet to come.
The coronavirus pandemic has officially snapped the United States’ economic growth streak.
The questions now are how extensive the damage will be — and how long the country will take to recover.
U.S. gross domestic product, the broadest measure of goods and services produced in the economy, fell at a 4.8 percent annual rate in the first quarter of the year, the Commerce Department said Wednesday. That is the first decline since 2014, and the worst quarterly contraction since 2008, when the country was in a deep recession.
Things will get much worse. Widespread layoffs and business closings didn’t happen until late March, or the very end of the last quarter, in most of the country. Economists expect figures from the current quarter, which will capture the shutdown’s impact more fully, to show that G.D.P. contracted at an annual rate of 30 percent or more.
“They’re going to be the worst in our lifetime,” Dan North, chief economist for the credit insurance company Euler Hermes North America, said of the second-quarter figures. “They’re going to be the worst in the post-World War II era.”
The larger question is what happens after that. Steven Mnuchin, the Treasury secretary, said this week that he expected the economy to “really bounce back” this summer as states lift stay-home orders and trillions of dollars in federal emergency spending reaches businesses and households.
Most independent economists are much less optimistic. The Congressional Budget Office last week released projections indicating that the economy will begin growing again in the second half of the year but that the G.D.P. won’t return to its pre-pandemic level until 2022 at the earliest.
Despite Wednesday’s grim report, stocks on Wall Street were set for a gain, following a rally in global stocks. Futures for the S&P 500 got a boost after signs that a drug being tested as a possible treatment could be showing progress.
More big news on Wednesday is set for 2 p.m., when Federal Reserve officials will give an update on their outlook for the economy and their nonstop plans over the past two months to avert financial calamity. The central bank’s chair, Jerome H. Powell, will hold a news conference that will be closely watched by investors and business leaders.
Gilead said a drug study showed ‘positive data,’ but another study found no benefit to severely ill patients.
Gilead Sciences on Wednesday announced that the company “is aware of positive data” from a federal trial of its experimental coronavirus drug, remdesivir, even as a new study reported that the drug offered no benefit to severely ill patients in China.
Neither Gilead nor officials at the National Institute of Allergy and Infectious Diseases, sponsor of the federal research, provided further details about the trial sponsored by N.I.A.I.D., part of the National Institutes of Health.
President Trump is expected to discuss the findings at a White House briefing later today. In the past, Mr. Trump has hailed remdesivir as a potential “game changer,” despite spotty evidence.
The other study, conducted in China and published in the Lancet, questioned the value of the drug for treatment of severely ill patients but left open the possibility that it might be useful for others. The research was incomplete, however, because not enough participants could be enrolled.
Regarding the federal trial, the brief announcement by Gilead read: “We understand that the trial has met its primary endpoint and that N.I.A.I.D. will provide detailed information at an upcoming briefing.”
Trading in the company’s stock was halted before the market opened. The news drove stocks higher, and the S&P 500 rose about 2 percent in early trading.
The Food and Drug Administration acknowledged that officials were discussing approval of remdesivir for treatment of Covid-19 patients, presumably under emergency use provisions.
The N.I.A.I.D. study includes 400 patients who were hospitalized with Covid-19, the illness caused by the coronavirus, and randomly assigned to take remdesivir or a placebo. Outcomes were scored on a scale ranging from recovery to death.
Remdesivir has never been approved as a treatment for any disease. It was developed to fight Ebola, but results from a clinical trial in Africa were disappointing.
Expectations were fueled by anecdotal reports of Covid-19 patients who took remdesivir and recovered.
Two such reports were published in the prestigious New England Journal of Medicine, lending credibility to what researchers later said were uncertain results.
Without trials comparing the drug to a placebo, it has been impossible to know whether the drug made a difference or patients got better on their own with normal supportive care.
The study of remdesivir published in the Lancet found no benefit to the drug, compared to placebo.
President Trump and Dr. Anthony S. Fauci, the federal government’s leading epidemiologist, on Wednesday hailed the early trial results, holding out hope that it could help stem the rising death toll.
Meeting with reporters at the White House, Dr. Fauci called the study very optimistic, although he cautioned that it still needs to be properly peer reviewed.
Dr. Fauci said the trial suggested that the drug could shorten the time to recovery by about a third. “Although a 31 percent improvement doesn’t seem like a knockout 100 percent, it is a very important proof of concept because what it has proven is that a drug can block this virus,” Dr. Fauci said. “This is very optimistic.”
Mr. Trump said that “certainly it’s positive, it’s a very positive event.”
But the company noted that remdesivir is not yet licensed or approved in the United States or anywhere else “and has not yet been demonstrated to be safe or effective for the treatment of Covid-19.”
Stocks rallied on Wednesday, boosted by indications that a drug being tested as a possible treatment could be showing progress, and as investors pinned their hopes on the gradual reopening of the world’s major economies.
The S&P 500 gained more than 2 percent, and major benchmarks in Europe were also higher.
The gains came despite data that showed the U.S. economy shrank by the most since 2008 in the first quarter of the year. Earnings reports from Volkswagen, Samsung, Airbus, Boeing and other giant businesses were also grim.
But investors have been shaking off bad news on the economy for weeks as they focus on progress on efforts to contain the coronavirus pandemic. A steady climb has lifted the S&P 500 by nearly 30 percent since its March 23 low.
The trading on Wednesday had all the hallmarks of a rally fueled by hopes of a return to normal, with shares of airlines and cruise operators — both industries that are dependent on the end of restrictions and the return of travelers — among the best performing stocks in the S&P 500.
Oil prices also surged, with gains picking up steam after a weekly report on crude oil stockpiles showed they increased by less than expected. Investors have been worried about a glut of crude as demand for energy plunges, along with storage capacity in the United States.
On Wednesday, West Texas Intermediate crude, the U.S. benchmark, was up as much as 30 percent, to more than $16 a barrel. Brent crude, the international benchmark, was trading at a little over $23 a barrel, up about 14 percent.
Residents in most states in the country — along with more than half of all humanity — have been ordered to shelter in their homes in the hopes of slowing the spread of the highly contagious virus and to try to keep hospital systems from being overwhelmed.
While the timeline for the spread of the virus across the country has shifted as public health authorities find evidence that the pathogen was spreading in communities earlier than believed, the speed at which the world has been transformed is shocking.
The country has watched President Trump speak about the pandemic almost every day in ways that were alternately misleading, resentful, insulting, dangerous and, often, sown with self-praise.
But as the country tries to slowly move out of a lockdown and find a way to restore some form of public life, with no vaccine or therapy yet available, the virus is still setting the course.
Gov. John Bel Edwards of Louisiana, which has had some of the areas hardest hit by the coronavirus in the nation, was meeting with Mr. Trump on Wednesday, having planned to ask for federal help to ramp up the state’s testing capability and outline plans for reviving the state’s economy.
As the governors in surrounding states have been eager to ease stay-at-home orders and reopen businesses, Mr. Edwards, a Democrat, extended Louisiana’s until May 15. The state has more than 27,000 confirmed cases — the fifth-highest per capita rate in the nation — and has reported at least 1,758 deaths.
“The fact is,” Mr. Edwards said at a briefing on Monday afternoon, “we just don’t meet the criteria.”
“I know some may be looking to other states in our region and looking and seeing what they’re doing and wondering why we can’t match our schedule with theirs,” said Mr. Edwards, whose initial order was to expire this week. “But the reality is the disease has spread through our state at a rate and in numbers that far exceeds our neighbors.”
Mr. Edwards appears to have taken great pains to avoid alienating the Trump administration, noting in the announcement on Monday that he had talked to Mr. Pence before extending Louisiana’s order and said he had his backing.
Although Mr. Trump, who met with Gov. Ron DeSantis of Florida on Tuesday, has urged states toward reviving their economies — often over the concerns of health experts — he publicly criticized Gov. Brian Kemp of Georgia for a plan that began that state’s reopening last week.
The number of total deaths in seven states hit hard by the virus was nearly 50 percent higher than normal over a five-week span during the pandemic, according to statistics released by the Centers for Disease Control and Prevention on Tuesday. There were 9,000 more deaths in those states than the official counts of virus deaths suggest.
The newly released data is partial and most likely undercounts the recent death toll, but it still illustrates how the virus is causing a surge in deaths.
From March 8 through April 11, provisional deaths from all causes soared far above their normal levels in Colorado, Illinois, Maryland, Massachusetts, Michigan, New Jersey and New York.
The gap between total mortality and the official count of virus deaths probably reflects both an undercount of virus deaths and a surge in deaths from other causes. There is increasing evidence that stresses on the health care system and fears about catching the disease have caused some Americans to die from ailments that are typically treatable.
While no mortality statistics are perfect, the C.D.C. uses detailed death certificates to code the causes of death for everyone who dies in the United States. But that process typically takes more than a year to complete. For now, measures of total deaths are the most useful tool, several epidemiologists said, for measuring the impact of the virus in the United States.
Mr. de Blasio warned “the Jewish community, and all communities” on Twitter that violating social-distancing guidelines could lead to summonses or arrest. Police Commissioner Dermot F. Shea said that 12 summonses were issued, including four for refusal to disperse.
At his Wednesday briefing, the mayor repeated the point, saying that he had a long-held relationship with the Orthodox Jewish community.
“The notion that people gather in large numbers and even if they didn’t mean to would spread a disease that will kill other members of the community is just unacceptable to me,” he said.
He added: “Members of the Jewish community were putting each other in danger. They were putting our police officers in danger.”
Mr. de Blasio said the funeral was “by far the largest gathering in any community of New York City of any kind that I had heard of or seen directly or on video since the beginning of this crisis, and it’s just not allowable.”
New York’s ultra-Orthodox Hasidic communities have been hit especially hard by the virus — one Brooklyn resident called the disease “a plague on a biblical scale” — and Hasidic residents’ tendency to congregate in big groups has been held partly responsible.
Some Jewish leaders criticized the mayor for seeming to single out one community.
Jewish leaders and others pointed out that Mr. de Blasio’s Tuesday diatribe came on the same day that New Yorkers clustered in large dense crowds to watch a flyover by the Blue Angels fighter-jet squadron and accused the mayor of a double standard.
Mr. de Blasio offered a limited apology on Wednesday, but said that he would not stand for anyone violating social distancing guidelines.
“If I see it in any other community, I’ll call that out equally,” he said. “If in my emotion I said something that in any way was hurtful, I’m sorry about that, that was not my intention. But I also want to be clear, I have no regrets about calling out this danger and saying I want to deal with it very, very aggressively.”
At his daily briefing, Gov. Andrew M. Cuomo said 330 more people had died in the state, a third consecutive day at a flat rate. That brought the state’s total official tally to 17,968. But the number of new hospital admissions for the virus increased slightly, for the first time in 12 days. “That is not good news,” the governor said.
He said he was issuing an order allowing elective surgeries to resume in 35 counties that have been hit less hard by the virus. New York City and the five downstate counties closest to the city were not among them.
A group of prominent independent restaurant owners is asking Congress for a $120 billion stabilization fund to prevent thousands of restaurants across the country from closing after massive and protracted losses stemming from the pandemic.
“We are fighting to give restaurants a fighting chance,” said José Andrés, a Washington-based chef and philanthropist who has been at the forefront of lobbying for his industry, which has accounted for roughly 60 percent of all American job losses in March, according to the Independent Restaurant Coalition. The group formed after the vast majority of independent operators were unable to take part in a vast federal program to aid small businesses.
Under that program, businesses will be forgiven if their employees are paid over the eight-week period after the loan is made. But that is difficult for bars and restaurants, many of which government officials ordered to close. Even once reopened, many restaurants will be unable to comply with social distancing rules and run at full capacity.
“How do I make money if I have to bring back all my staff doing less volume and less sales?” Nina Compton, the owner of Compère Lapin in New Orleans, said during a conference call on Wednesday. “We need support, we need stabilization.”
Andrew Zimmern, the executive producer of the Travel Channel’s “Bizarre Foods” and a member of the coalition, said that only 20 percent of independent restaurants owners in cities that are shut down are certain they will be able to sustain their businesses.
“The severity of this crisis is extremely deep,” he said.
The Navy delays a decision on restoring the captain of the Theodore Roosevelt carrier and extends an investigation.
The acting secretary of the Navy on Wednesday ordered a wider investigation into the events aboard the aircraft carrier Theodore Roosevelt, apparently shelving for now a recommendation by the Navy’s top admiral to restore Capt. Brett E. Crozier to command the virus-stricken warship.
“I have unanswered questions that the preliminary inquiry has identified and that can only be answered by a deeper review,” the acting secretary, James E. McPherson, said in a statement.
Mr. McPherson said he was directing the chief of naval operations, Adm. Michael M. Gilday, to conduct a follow-on investigation, expanding a preliminary review that the Navy completed and presented to Defense Secretary Mark T. Esper last week.
Mr. McPherson’s announcement came just days after Admiral Gilday recommended giving Captain Crozier his job back. But Mr. Esper, who initially said he would leave the process largely in the hands of the military chain of command, delayed endorsing the findings last week until he said he could review the Navy’s investigation into the matter.
In an executive order issued late Tuesday, Mr. Trump said that recent closures of meat processing facilities “threaten the continued functioning of the national meat and poultry supply chain, undermining critical infrastructure during the national emergency.”
The president said his administration would “take all appropriate action” to ensure that meat and poultry processors “continue operations” consistent with federal health and workplace safety guidance.
While Mr. Trump said the step would ensure an ample supply of “protein for Americans,” the announcement provoked swift backlash from unions and labor advocates, who said the administration needed to do more to protect workers who often stand shoulder to shoulder in refrigerated assembly lines. At least 20 workers have already died of the virus, the United Food and Commercial Workers International Union said.
Without a vaccine or proven treatment, survivors and the antibodies they carry are considered potential saviors for patients with a disease that has killed more than 53,000 people in the United States. Demand for “convalescent plasma” has outstripped supply by roughly two to one as hospitals, blood banks and relatives of sick patients scramble to find donors.
Under a national program overseen by the Mayo Clinic and authorized in early April by the Food and Drug Administration, about 2,500 patients at U.S. hospitals have been given the experimental treatment. The F.D.A. has also granted “numerous” applications from individual doctors to use convalescent plasma for patients, the agency said in a recent statement.
In St. Louis County, Mo., an Army veteran received plasma from a lawyer who had recently recovered. In Westchester County, N.Y., a college student who previously had a mild case donated to a man in his 70s on a ventilator. Convalescent plasma shipped from a blood bank in San Diego was given to a hospitalized patient in a Philadelphia suburb.
Whether convalescent plasma is an effective treatment is still unknown. One clinical trial is starting this week to weight that question. Even so, blood banks have had trouble keeping up with demand.
“The ideal situation would be for all the places who are going to be doing this at any scale to have some in the freezer, some inventory,” Dr. Michael Joyner of the Mayo Clinic said.
A pug in North Carolina named Winston has tested positive in what is apparently the first known case in which the virus was detected in a dog in the United States, researchers at Duke University said.
The dog belongs to a Chapel Hill family participating in a research study at the university, in which researchers were trying to understand how humans respond to different types of infection. Three of the family members were also infected by the virus.
The dog’s symptoms lasted only a few days and were mild, according to members of the family — he was sluggish, sneezing and breathing heavily. Most telling of all, they said, he didn’t finish breakfast one morning.
A spokeswoman for the Agriculture Department said that the agency was aware of the report and was following up, but that it had not yet confirmed the test results. If confirmed, Winston would be the first official case of a dog testing positive in the United States.
Winston’s preliminary test results, if confirmed by the U.S. Agriculture Department, will raise broader questions about how susceptible animals are to the virus. Experts have said that there is no evidence that pets can transmit the virus to people, and that people should not worry about giving the virus to their pets.
The pulse oximeter is the pandemic go-to gadget. Do you need one?
A pulse oximeter is a small device that looks sort of like a chip clip or a big clothes pin. You place your finger snugly inside, and within seconds it lights up with numbers indicating your blood oxygen level and heart rate.
Health officials are divided on whether home monitoring with a pulse oximeter should be recommended. Studies of reliability show mixed results, but many doctors are advising patients to get one, making it the go-to gadget of the pandemic.
Follow updates on the pandemic from our team of international correspondents.
Sweden forged its own path while countries around it shut down, and Russia extended its lockdown despite having relatively few confirmed cases.
Reporting was contributed by Alan Blinder, Eileen Sullivan, Michael Cooper, Marc Santora, Nicholas Bogel-Burroughs, Audra D. S. Burch, Michael Gold, Amy Harmon, Josh Katz, Denise Lu, Rick Rojas, Margot Sanger-Katz, Linda Villarosa, Ben Casselman, Christine Hauser, Jenny Gross, Jennifer Steinhauer and Gina Kolata.