Newsletter: We Have a Deal

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This is the web version of the WSJ’s newsletter on the economy. You can sign up for daily delivery here.

Global stocks rallied Wednesday as investors cheered an agreement between U.S. lawmakers and the Trump administration on an estimated $2 trillion stimulus package to limit the economic damage of the coronavirus pandemic. Jeff Sparshott here with the latest.

Pressure Drop

The U.S. and Europe saw record declines in business activity in March, as economic output slowed around the world due to measures aimed at containing the new coronavirus. Data firm IHS Markit said its composite purchasing managers index for the U.S.—an aggregate measure of activity in the manufacturing and services sectors—dropped to a record low for the 10½-year-old series. The comparable index for the eurozone fell to its lowest level since the surveys began in July 1998. The surveys of purchasing managers—which have a good record of measuring economic activity—point to large drops in output and big job losses in some of the world’s largest economies, Harriet Torry, Paul Hannon and Megumi Fujikawa report.

“We’re going to see some absolutely horrific [gross domestic product] numbers coming through for the second quarter based on what these surveys are telling us for March,” said Chris Williamson, IHS Markit’s chief business economist.


U.S. durable goods orders for February are expected to fall 0.5% from the prior month. (8:30 a.m. ET)

The White House coronavirus task force holds a press briefing at 5 p.m. ET.

Note: This is a partial listing of key economic events and subject to change.


Is $2 Trillion Enough?

How bad will the economic hit be? That will depend on the virus’s spread, efforts to contain it and government programs to offset the shock. One step: Lawmakers and the Trump administration reached an agreement on an estimated $2 trillion stimulus package aimed at shielding the U.S. economy. The legislation will provide direct financial checks to many Americans, drastically expand unemployment insurance, offer hundreds of billions in loans to both small and large businesses and provide health-care providers with additional resources as the virus spreads. A vote on the massive bill is expected Wednesday, Joshua Jamerson and Andrew Duehren report.

President Trump said he hopes to have the country “opened up and just raring to go by Easter.” The comments marked the extension of a complicated debate, both inside and outside the White House, over how to balance the public-health benefits of coronavirus restrictions against the broad economic pain those measures are causing, Rebecca Ballhaus, Stephanie Armour and Alex Leary report.

One wildcard: Will states and cities follow the federal lead? State by state, America is locking down its residents. Indiana, Michigan and Oregon are among the latest to  announce orders to stay home other than for essential business, Jennifer Levitz and Kris Maher report.

One hitch: The unemployment-insurance system wasn’t designed to move as quickly as the coronavirus is knocking the U.S. labor market off course. That’s leading to delayed benefits checks, Sarah Chaney and Eric Morath report.

Who is still working? The men and women deemed essential carry on, including grocery-store clerks, prison guards and delivery drivers. Workers from New Hampshire to California say they feel both duty and dread. They’re also glad to still be working, Valerie Bauerlein, Jennifer Levitz and Alejandro Lazo report.

Good news: Many businesses are paying higher wages or providing bonuses to employees who are vital for dealing with the current pandemic. Campbell Soup is the latest to join the growing list, adding $2 an hour for hourly workers. Another popular boost is a $300 bonus for full-time employees and a $150 one for part-time workers. Among the companies taking this approach: Kroger, Walgreens Boots Alliance, Walmart and Hormel Foods, Jennifer Hodson reports.

While the U.S. is trying to soften the blow for millions who have already lost jobs, Europe is taking a different approach: stopping people from getting fired in the first place. In the past days, governments across the continent have deployed new programs—or extended existing ones—to subsidize the wages of idled workers, allowing employers to keep them in their jobs even if there is nothing for them to do. While the models vary by country, eligible workers would generally see all or part of their wages paid by the government while they either stop working or work a reduced shift, all the while remaining on their company’s payroll. Such programs can not only provide quick relief to businesses and workers, but also allow companies to hit the ground running once activity picks up again, Tom Fairless and Paul Hannon report.

We Can Get Through This

U.S. companies in China expect business to return to normal soon. In a poll of 119 companies conducted in mid-March by the American Chamber of Commerce in China, 22% of respondents said they have already resumed normal business operations after a prolonged period of shutdown. Another 13% expect a return to normal business by the end of March and 23% more by the end of April, Yoko Kubota reports.

How did China turn the tide? The cordon sanitaire that began around Wuhan and two nearby cities on Jan. 23 helped slow the virus’s spread but didn’t really stop it in Wuhan itself. The key was a shift to a more aggressive and systematic quarantine regime whereby suspected or mild cases—and even healthy close contacts of confirmed cases—were sent to makeshift hospitals and temporary quarantine centers. The tactics required turning hundreds of hotels, schools and other places into quarantine centers, as well as building two new hospitals and creating 14 temporary ones in public buildings. It also underscored the importance of coronavirus testing capacity, which local authorities say was expanded from 200 tests a day in late January to 7,000 daily by mid-February, Jeremy Page reports.

The WSJ has lowered its paywall for live coronavirus coverage. Follow along here.


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America needs to create an economy that can operate under pandemic conditions. “This could bring such changes as widespread touchless delivery, temperature checks at retail stores and restaurants and nightly sanitation at essential businesses. It means an expansion of health clinics, in-home physician services and perhaps the provision of social-distance-compliant day care. Building these kinds of services will require not only entrepreneurial creativity but also a lot of labor. The U.S. has both,” Tax Foundation vice president Karl Smith writes at Bloomberg Opinion.


Real Time Economics has launched a downloadable calendar with concise previews forecasts and analysis of major U.S. data releases. To add to your calendar please click here.

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