News Brief: Economic Data, Meat Shortage Concerns, Research Funds Pulled

We get a measure of how much damage COVID-19 has done to the economy. President Trump orders meat processors to stay open. And, the government terminates funding for a coronavirus research project.

STEVE INSKEEP, HOST:

The United States now has more than 1 million cases of coronavirus. And today, we get a measure of how much economic damage the pandemic did in the first quarter.

RACHEL MARTIN, HOST:

Yeah, and the government is going to release its measure of the Gross Domestic Product, the GDP, from January through March. Those months started with a high stock market and low unemployment. They ended with a crashing market and millions out of work.

INSKEEP: NPR chief economics correspondent Scott Horsley is on the line. Scott, good morning.

SCOTT HORSLEY, BYLINE: Good morning, Steve.

INSKEEP: How bad are the GDP numbers likely to be?

HORSLEY: Forecasters expect this morning's report is going to show the U.S. economy shrank during the first three months of the year. That would be the first quarterly contraction in six years.

INSKEEP: Wow.

HORSLEY: As Rachel suggests, it's all because of the coronavirus. For the first 2 1/2 of those months, the economy was chugging along, growing at a steady if not spectacular pace. But then we got to the middle of March and there was this sharp and sudden downturn. That's when restaurants and retail shops around the country closed their doors. Tens of millions of Americans were ordered to stay home. Ben Herzon, who's an economist at IHS Markit, says that triggered a sharp decline in consumer spending. And that was enough to erase whatever growth we'd seen before.

BEN HERZON: Whenever you have the entire country changing behavior at one time in a way that reduces spending, it's certainly enough to wipe out any gains that we saw earlier in the year.

HORSLEY: Herzon's expecting to see first-quarter growth declining at an annual pace of nearly 5%. And some forecasters expect an even sharper slowdown.

INSKEEP: That is really bad, and yet you're saying that reflects only a couple of weeks of the shutdown. Things were running as normal the first couple of months. If that couple of weeks was bad enough to cause a contraction, what about the quarter we're in now?

HORSLEY: Yeah. That's what's kind of scary. If half a month of hunkering down can send the economy into reverse, what happens in this quarter when we're looking at a full month in some parts of the country, much more than that in many other parts of the country? Economists expect to see a really deep contraction in the second quarter. When those numbers come out in July, Herzon expects them to show the economy shrinking at an annual pace about 37% between April and June. You know, in just the last five weeks, we've seen some 26 million people applying for unemployment. Millions more could be added to the rolls before this is over. So this is shaping up to be the deepest recession in the U.S. since the 1930s.

INSKEEP: And the only thing that people have been able to hang on to really is the idea that this should be temporary, that things should improve in some later quarter. Is there any indication here how that recovery might go?

HORSLEY: The Commerce Department numbers look backwards, not forwards, but certainly economists are trying to make predictions. It's not a really clear picture. It depends on, of course, what the virus does and how people respond. The best-case scenario is the economy starts to stabilize this summer, and then we begin to get a rebound later in the year. But there's no guarantee of that. You know, if a lot of businesses go under before we get to the other side, that recovery will be weaker and will take longer. And then there's the danger of a big second wave of infections later in the year that requires another round of lockdowns.

INSKEEP: And already we have this indication from an NPR poll of how many Americans have been affected by this economic damage.

HORSLEY: Yeah. This is a poll NPR conducted along with the PBS NewsHour and Marist College, and it found 50% of Americans have either lost a job or lost work hours because of the pandemic. That's up from just 18% who said that a month ago. The pain is definitely widespread, but it is not spread equally. You know, people of all stripes have been affected, but the job losses and the economic pain has fallen hardest on younger people, people without a college degree, people who make less than $50,000 and black and brown people. And even with that big economic cost, 80% say they don't want schools, restaurants and big sporting events to restart until there's more testing.

INSKEEP: Scott, always a pleasure talking with you. Thank you so much.

HORSLEY: Good to be with you, Steve.

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INSKEEP: The president has begun giving orders to the meatpacking industry.

MARTIN: He invoked something called the Defense Production Act. This is a law that puts industry at the government's command during emergencies. And President Trump used it to tell meat processors when and how to stay open. So what does this mean for America's food supply chain?

INSKEEP: Luke Runyon is going to have some answers for us. He's from member station KUNC in Colorado. And he follows the meatpacking industry. Luke, good morning.

LUKE RUNYON, BYLINE: Hi there.

INSKEEP: What exactly is in the president's order?

RUNYON: So it says that some of the plant closures may be inconsistent with worker safety guidance that was issued by the CDC and the Occupational Safety and Health Administration. And it suggests that some of these plant closures that have been happening have been unnecessary. And we should note that the worker safety guidelines that the president is talking about were only issued this past weekend, well after a lot of plants were announcing these temporary or indefinite closures in response to coronavirus outbreaks among their workers. And what constitutes a necessary closure isn't, you know, something that's universally agreed upon. We've seen meatpacking workers in several states protest plants staying open despite these outbreaks. And one other thing the president said was that this would solve, quote, "any liability issues" for meatpacking plants. Though, right now, the legal ramifications really aren't clear.

INSKEEP: I want to be as clear as I can on this. When the government says plant closures may be inconsistent with worker safety guidance, they're not saying you're leaving your workers unsafe, shut down. They're saying keep going even though you, your company, may feel it is unsafe. What is it about working conditions in these meatpacking plants that make them so susceptible to outbreaks?

RUNYON: I've been inside one of these plants, a big beef plant in Greeley, Colo., and it looked like an assembly line except all of the workers are actually disassembling cattle. So you have these conveyor belts that are snaking through these facilities. And to churn out a lot of meat, you have workers standing in close quarters along these conveyor belts for hours. They're cutting meat with far less than six feet between them. And a lot of times, there's thousands of workers in these plants at one time. And you have break rooms and cafeterias and locker rooms that are being used by a lot of people every day.

INSKEEP: These are plants, I guess, that are not automated to the extent that, say, an auto plant would be. So what are you hearing from some of those thousands of workers?

RUNYON: Well, there have been protests about unsafe working conditions in several states. Yesterday in Nebraska, some of the 2,000 workers at a Smithfield pork plant outside Lincoln briefly walked off the job to protest plans to keep it open in the midst of an outbreak at that facility, which has 48 positive cases. My colleague Christina Stella at NET Nebraska spoke to a worker at the plant in Crete and asked for anonymity for fear of losing her job.

UNIDENTIFIED PERSON: Because it's almost like they don't care about us. Just keep production going, keep the money coming in. Whatever they can do to just keep going, that's how I feel. And I know I'm not the only one that's, like, actually scared.

INSKEEP: Well, that doesn't sound like a pleasant situation for workers.

RUNYON: No. And I think a lot of the workers really are concerned about getting sick, not just for their own health but potentially taking the virus back home with them.

INSKEEP: Luke, thanks so much.

RUNYON: Thank you.

INSKEEP: That's Luke Runyon at KUNC.

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INSKEEP: Some other news now. The U.S. government has terminated funding for a research project on coronaviruses in China.

MARTIN: It was actually run by a U.S. nonprofit and funded entirely through grants from the National Institutes of Health. The U.S. group was working closely with the Wuhan Institute of Virology, which is the lab in the same city where the outbreak started. Some U.S. officials have been working to raise suspicions that the virus escaped from that very lab, though experts have cast doubt on that theory.

INSKEEP: NPR global health correspondent Nurith Aizenman is covering this story. Good morning.

NURITH AIZENMAN, BYLINE: Good morning, Steve.

INSKEEP: What was this group working on?

AIZENMAN: It goes back to 2003. Remember the outbreak of severe acute respiratory syndrome, or SARS, in China?

INSKEEP: Yeah.

AIZENMAN: Well, scientists think some version of SARS, which is a type of coronavirus also, had long been circulating in bats before suddenly making its way to humans. So EcoHealth Alliance started this work in China to essentially prepare for the next coronavirus outbreak by capturing bats, testing them to see what other viruses they were harboring that could spark the next outbreak. They found literally hundreds. And they teamed up with this respected local outfit, as you say the Wuhan Institute of Virology. And that's what seems to be behind the U.S. government's suddenly pulling of the funding because of all these conspiracy theories recently circulating that the Wuhan Institute might have started the current coronavirus outbreak through some kind of contamination accident.

INSKEEP: What has your reporting shown when you look into it more deeply?

AIZENMAN: Yeah. NPR has spoken with half a dozen researchers who are familiar with lab accidents and how research on coronaviruses is conducted. And the consensus is there's virtually no chance the new coronavirus was released as a result of a lab accident in China or anywhere else. But there has been that steady drumbeat of criticism of this institute, particularly by Republican leaders, the U.S. intelligence departments are looking into it, leaks by the State Department. Then about a week ago at a press conference, a reporter asked President Trump why U.S. funds had been provided to the institute as a result of this project run by EcoHealth Alliance. Trump said officials would look into it. Days later, EcoHealth Alliance got an email from the National Institutes of Health, which provides the grant, saying it was terminating it.

I should say that both the questioner and then President Trump in his answer misstated the details of the funding. They implied the Obama administration had sent $3.7 million to the Wuhan Institute. While the grant was started under Obama, it was renewed for another five years under Trump. Also only a small portion of the money goes to the Wuhan Institute to cover the costs of using their labs to collect and analyze samples.

INSKEEP: I guess, just on an objective basis, it doesn't matter which administration approved the money. It's just a question of whether it makes sense or not. But, of course, politically, it matters an enormous amount to the president whether something is linked with Obama or whether he can link it with Obama. What has this group said about losing the money?

AIZENMAN: Well, I spoke with EcoHealth Alliance's president, Peter Daszak, and he is mystified. He says without this funding, the project can't go forward, and there's a real cost. They have samples of hundreds of different coronaviruses sitting in the freezer in Wuhan that now they won't be able to access. And those samples are really useful because, you see, scientists are desperately developing treatments and vaccines for the current coronavirus. But, ideally, they want to design them to also work on those other similar coronaviruses because it's only a matter of time before one of those sparks another outbreak.

INSKEEP: This is NPR global health correspondent to Nurith Aizenman speaking with us. Nurith, thanks as always.

AIZENMAN: You're welcome.

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