WASHINGTON (AP) — Government relief checks began arriving in Americans’ bank accounts as the economic damage to the U.S. from the coronavirus piled up Wednesday and the reopening of stores in Europe and China made it clear that business won’t necessarily bounce right back when the crisis eases.
With lockdowns and closings bringing factories and other businesses to a shuddering halt, American industrial output shriveled in March, registering its biggest decline since the U.S. demobilized in 1946 at the end of World War II. And retail sales fell by an unprecedented 8.7%, with April expected to be far worse.
The government this week began issuing one-time payments as part of its $2.2 trillion coronavirus relief package, with adults receiving checks of up to $1,200 each and $500 per child to help households make the rent or cover other bills. The checks will be directly deposited into bank accounts or mailed to households, depending on how they filed their tax returns in the past.
Meanwhile, the first steps in lifting the economically crippling restrictions in other parts of the world are running into resistance, with shoppers and other customers staying away from the reopened businesses and workers afraid the newly restored freedoms could put their health at risk.
In China, millions are still wary of spending much or even going out. Some cities have resorted to handing out shopping vouchers and trying to reassure consumers by showing officials in state media eating in restaurants.
“I put off plans to change cars and spend almost nothing on eating out or entertainment,” said Zhang Hu, a truck salesman in Zhengzhou who has gone back to work but has seen his income plummet because few people are looking to buy 20-ton rigs. “I have no idea when the situation will turn better.”
In Austria, Marie Froehlich, who owns a clothing store in downtown Vienna, said her staff was happy to get back to work after weeks of being cooped up at home. But with her business dependent largely on tourism, which has dried up amid the travel restrictions, she expects it will take months to return to normal.
“Until then, we are in crisis mode,” she said.
The scene was similar in hard-hit Italy, where the streets of Rome were largely deserted despite an easing of restrictions this week that allowed some stores to reopen.
Worldwide, deaths have topped 128,000 and confirmed infections have surpassed 2 million, according to the tally kept by Johns Hopkins University. The figures understate the true size of the crisis, in part because of limited testing, different ways of counting the dead, and concealment by some governments
The U.S. has by far been the hardest-hit country, with more than 26,000 deaths and over 600,000 confirmed infections, by Johns Hopkins’ count. Still, nightmare scenarios projecting a far greater number of deaths and hospitalizations have not come to pass, raising hopes from coast to coast.
At the same time, the economic damage from the effort to “flatten the curve” of infections has mounted alarmingly.
Signifying a huge shift in consumer behavior, grocery store sales in the U.S. jumped nearly 26% as Americans stocked up on food and consumer goods to ride out the crisis, while auto sales plummeted by one-quarter and clothing store sales slid by more than half, the government reported. The category that mostly includes online shopping rose more than 3%.
“With clear signs of panic buying of necessities and the fact that lockdowns were introduced only around the middle of the month means that far worse is to come in April and the second quarter more generally,” said Michael Pearce, an economist at the consulting firm Capital Economics.
U.S. manufacturing output by the world’s biggest economy dropped 6.3% last month, led by plunging production at auto factories, which have shut down entirely.
President Donald Trump has been anxious to lift stay-at-home orders and business shutdowns in the U.S. But those aspirations continue to meet stiff resistance on the state and local levels.
On Wednesday, a day after New York City added nearly 4,000 deaths to its toll, in part by counting people who were believed to have the virus but were never tested before they died, liberal Democrat Mayor Bill de Blasio told Fox News that he intends to move cautiously.
“In this case, I’ll call myself a conservative,” said de Blasio, whose city’s death toll now tops 10,000. “Look, I want to see people back to work as much as anyone. I feel it urgently. But we’ve got to secure the health and safety first of all New Yorkers and, obviously, all Americans. … We get one chance to get it right.”
The European Union echoed such concerns even as it published a 16-page road map plotting a united course out of the crisis for the 27 nations. The EU warned that “any level of gradual relaxation of the confinement will unavoidably lead to a corresponding increase in new cases.”
Foreign leaders, meanwhile, rushed to the defense of the World Health Organization after Trump vowed to cut off payments to the U.N. agency for not sounding the alarm over the virus sooner.
EU foreign policy chief Josep Borrell said the WHO is now “needed more than ever” to combat the outbreak.
“Only by joining forces can we overcome this crisis that knows no borders,” he said.
Associated Press journalists around the world contributed to this report.
Follow AP coverage of the pandemic at http://apnews.com/VirusOutbreak and https://apnews.com/UnderstandingtheOutbreak
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