Newsletter: ‘Hell of a Bad Two Weeks’

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In the U.S. and much of the West, the health and economic toll from the coronavirus is expected to get worse before it gets better. Jeff Sparshott here to take you through the latest.

Digital Divide

The new coronavirus pandemic is deepening a national digital divide, amplifying gains for businesses that cater to customers online, while businesses reliant on more traditional models fight for survival. The process is accelerating shifts already underway in parts of the U.S. economy in ways that could last long after the health crisis has passed. Many bricks-and-mortar retailers, which had seen falling foot traffic for years due to online competition, have now shuttered their stores while online merchants watch sales boom. Sectors that had long resisted the move online are now joining in, from doctors and therapists to fitness providers to schools and universities. The transition is also driving labor force upheaval, with those who can work online still drawing paychecks while workers who depend on face-to-face contact suffer, Harriet Torry reports.

The big question, economists say, is whether the changes created by this sudden, forced experiment will prove permanent after the coronavirus pandemic eases. If so, that could transform the U.S. economy and open the way to new types of businesses and providers.

WHAT TO WATCH TODAY

The ADP employment report for March is expected to show a net loss of 125,000 jobs from the prior month. That would be the weakest reading since October 2009. (8:15 a.m. ET)

IHS Markit’s U.S. manufacturing index for March is expected to fall to 47.3 from 49.2 earlier in the month. (9:45 a.m. ET)

The Institute for Supply Management’s manufacturing index for March is expected to fall to 44.5 from 50.1 a month earlier. That would be the lowest reading since May 2009. (10 a.m. ET)

U.S. construction spending for February is expected to increase 0.7% from the prior month. (10 a.m. ET)

The Boston Fed’s Eric Rosengren speaks by videoconference to the Greater Boston Chamber of Commerce at 2 p.m. ET.

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

TOP STORIES

Stay Home

The White House projected the U.S. could face 100,000 to 240,000 deaths from the coronavirus pandemic, as President Trump warned Americans to brace for an unprecedented crisis in the days ahead. “This could be a hell of a bad two weeks,” Mr. Trump said. The president repeatedly urged Americans to follow federal social-distancing guidelines, which have now been extended through the end of April, Alex Leary, Jennifer Calfas and Chong Koh Ping report.

Italian authorities believe the country’s coronavirus epidemic, the world’s deadliest, is slowing down appreciably after three weeks of national lockdown, a hopeful sign for other Western countries that are following approaches similar to Italy’s—with a time lag. Italy, where a national lockdown began on March 10, has become a test case of whether Western nations can suppress the pandemic while using strategies less draconian than China’s, Marcus Walker reports.

Factory Freeze

Factories across Asia and Europe cut output and jobs in March at the fastest pace since the global financial crisis, a sign the global economy has entered a deep freeze as governments lockdown their populations. Manufacturing activity in Japan, South Korea, Indonesia, Vietnam, the Philippines, Italy, Germany, Greece, Poland and elsewhere plunged in March, painting an almost uniform picture of sharply declining production, falling new orders and contracting payrolls, Paul Hannon reports.

The main exception was China, which saw a slight rebound in activity as its economy began to thaw out after sharp contractions in January and February. But sluggish demand at home and around the world is dampening hopes for a speedy recovery.

It’s What We Do

Restaurants with strong delivery businesses are best positioned to survive the fallout from the new coronavirus crisis. But an update from Domino’s shows the road won’t be easy. The pizza chain said late Monday that sales started to slow in February and March in its key markets as shelter-in-place directives, university and school closures, event cancellations and the lack of live televised sports started to squeeze business. Domino’s is actually hiring workers in localities where demand has picked up. But delivery providers aren’t immune to slowing economic growth and surging unemployment when cheaper meals can be had at the grocer, Charley Grant writes.

Consumers’ rush to buy groceries is fueling a rally in orange-juice prices, making the usually sedate asset the best-performing commodity in the first quarter of 2020. The price of frozen orange-juice-concentrate futures is the highest level since June, when traders were anticipating a strong hurricane season bearing down on states including Florida, Kirk Maltais reports.

Other commodities aren’t doing so well amid shifts in demand. U.S. lumber prices are signaling that the nascent housing boom is fizzling, despite home builders’ push to keep residential construction going through the coronavirus crisis. And copper prices are on track for their worst start to a year in more than three decades. The red metal, used heavily in industry and manufacturing, tends to respond to shifts in investors’ perceptions of global growth.

How To: Loans, Checks, Tech and Lockdowns

How to apply for small business loans.

Do you qualify for unemployment benefits?

Coronavirus stimulus payments: When will they be sent and who is eligible?

Working from home? The WSJ’s Joanna Stern has compiled a list of tips to help you through daily tech woes.

A guide to state coronavirus lockdowns.

The WSJ’s free coronavirus resources.

WHAT ELSE WE’RE READING 

Former Minneapolis Fed president Narayana Kocherlakota says a $2 trillion stimulus package isn’t enough. “What they’ve done for households is too limited. What they’ve done for state and local governments is also too limited. I think the package has been written with the idea that we’re going to be largely out of the woods by the end of June. My own forecast of the economy is less optimistic. Congress will have to come back to do more,” Mr. Kocherlakota, now a University of Rochester professor, says. 

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