California’s 40 million residents have been ordered to stay home except for essential trips, the most drastic action taken to date to contain the coronavirus pandemic in the United States.
The statewide order that began on Thursday night will be in place until further notice, but allows residents to leave for necessary errands such as grocery runs and for essential jobs, said California Governor Gavin Newsom, whose state is America’s most populous.
The number of coronavirus cases in the US has been exponentially rising as more testing becomes available, fuelling fears that its outbreak will be as bad as Italy’s if more extreme measures to decrease contact between people are not taken.
More than 14,000 cases of coronavirus have been confirmed in the US, with over 200 deaths.
Mr Newsom said that a staggering 56 per cent of California’s population – 25.5 million people – would be infected over an eight-week period if mitigation efforts like the shutdown of non-essential businesses were not taken.
The projection was quoted in a request Mr Newsom made to the federal government for a hospital ship on Thursday.
Americans were warned not to travel internationally and to return home if overseas by the State Department on Thursday, joining other countries, including Singapore, where similar advisories have been issued to stem the spread of the coronavirus pandemic amid growing border closures.
In its highest-level advisory, the State Department told Americans abroad to arrange for immediate return to the US using whatever commercial means were available, unless they were prepared to remain overseas for an indefinite period.
It added: “Airlines have cancelled many international flights and several cruise operators have suspended operations or cancelled trips. If you choose to travel internationally, your travel plans may be severely disrupted, and you may be forced to remain outside of the US for an indefinite timeframe.”
It was the latest twist of the knife by the pandemic, which has disrupted travel, kept people in their homes and out of work amid drastic measures taken to halt it.
In the US, the coronavirus has upended the economy and brought many businesses to a standstill. As bars, restaurants, clubs, theatres and gyms were ordered to close indefinitely, many retail stores and other facilities have also shut temporarily as a precaution.
Hundreds of thousands of workers across the country were laid off, formally fired so they could immediately claim unemployment benefits rather than be left in limbo to wait for businesses to reopen.
The Labour Department reported on Thursday that 281,000 people applied for unemployment benefits last week, a staggering 33 per cent – or 70,000 people – more than the week before.
“The increase in initial claims is clearly attributable to impacts from Covid-19,” said the Labour Department, noting that a number of states had specifically cited layoffs related to the coronavirus.
Many states also reported increased layoffs in service-related industries broadly and in the accommodation and food services industries specifically, as well as in the transportation and warehousing industry, it added.
Economists warned that the unemployment numbers would worsen in the coming weeks and that a recession was on the horizon, if not already here.
“The US economy is in a recession,” said analytics firm Oxford Economics in a research briefing. “The coronavirus pandemic will lead to profound, pervasive and persistent, but not permanent, reductions in activity, with widespread cuts in social spending, severe disruptions to supply chains, and a major interruption in travel and tourism activity.”
S&P Global predicted that the effects of social distancing on consumer spending, and a knock-on effect on business investment, would lead the US economy to shrink by 1 per cent in the first quarter, and by an even larger 6 per cent in the second quarter.
“While economic data for March is just starting to be released, the severity of the blow from the coronavirus leads us to believe that the US is entering recession – if not already in one,” it said in a research note on Tuesday.
Congress is now working on a trillion-dollar relief and stimulus package, which could include federally guaranteed loans to small businesses and a US$50 billion (S$72 billion) bailout of the airline industry.
The White House is also proposing direct payments of US$1,000 to every American adult and US$500 for every child, Treasury Secretary Steven Mnuchin said on Thursday. These would total US$500 billion, and be sent in two tranches.
“Stimulus spending of this magnitude is not only warranted, but (also) indispensable,” wrote Oxford Economics. “Though it may still be insufficient to address the widespread economic losses, and further measures can’t be ruled out.”
On Wednesday, Congress passed an initial coronavirus Bill that included paid sick leave for some workers and free virus testing for all.