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July 11, 2022 - Brief Issue 345

The Coronavirus Daily Brief is a daily news and analysis roundup edited by New America’s International Security Program and Arizona State University.

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Top Headlines

BA.5 Variant Drives Surge in Cases (Health & Science)

Big Pharma Tries to Treat Long Covid (Health & Science)

Europe Sees Rise in Infections Due to BA.4 and BA.5 (Around the World)

Britain’s Next Prime Minister Inherits Pandemic Complications (Around the World)

Macau Closes All Casinos (Around the World)

Schumer Tests Positive for Covid (U.S. Government & Politics)

Commerce Secretary: We Shouldn’t Talk Ourselves Into a Recession (U.S. Government & Politics)

Jobless Claims Rise Slightly, Still Near Pre-Pandemic Levels (U.S. Economy)

Housing Market Shows Signs of Cooling (U.S. Economy)

Freight Rates Fall (U.S. Economy)

Health & Science

There have been 88,594,118 coronavirus cases in the United States, and 1,020,863 people have died (Johns Hopkins). The United States has administered 593,739,529 vaccine doses, with 78.4% of all Americans having received at least one vaccine dose and 67% fully vaccinated. Among adults aged 18 or older 89.7% have received at least one dose, and 76.9% are fully vaccinated (U.S. CDC). 47.9% of fully vaccinated Americans have received a first booster shot. 26.7% of Americans aged 50 or older have received a second booster shot. Worldwide, there have been 555,490,873 cases of coronavirus, with 6,351,357 deaths.

BA.5 Variant Drives Surge in Cases

The latest Omicron variant, known as BA.5, has become dominant in the United States and is driving a surge in cases across the country. Officials are not able to determine the exact number of cases because most people are testing at home–or not testing at all. Eric Topol, a professor at Scripps Research, calls it “the worst version of the virus that we’ve seen” (WaPo). While infections are increasing, hospitalizations have not risen dramatically. About 38,000 people were hospitalized with Covid-19 as of Friday. Hospitalizations have been rising steadily since early March but haven’t spiked. Infectious-disease experts say that the BA.5 variant demonstrates that the coronavirus remains dangerous and that the country isn’t doing enough to limit transmission (NYT). 

Big Pharma Tries to Treat Long Covid

Even after the drug industry developed Covid-19 vaccines and treatments at previously unheard of speed, treatments for the post-viral illness known as long Covid are far from being developed. Long covid is characterized by a range of symptoms, like fatigue, brain fog, digestive issues, blood clots, strokes, diabetes, and kidney damage, to name a few. The range of symptoms is so broad because it’s an umbrella term used to refer to the lingering presence of the virus in the body. The healthcare industry has found it difficult to develop treatment for the condition because there is no clear way to measure the efficacy of treatments and many governments and academics are still collecting data to try to understand the best approach (WSJ). “No one knows how to define it, so no one wants to invest $1 billion in a Phase III program,” says Steven Deeks, an HIV expert who is studying long Covid at the University of California, San Francisco. The Centers for Disease Control and Prevention estimates that 7.5% of U.S. adults have long Covid symptoms, defined as those lasting three or more months after infection. Long covid could be a significant burden to the healthcare system and the economy, as many sufferers are unable to return to work. 

Bonus Read: “A Clunky Mask May Be the Answer to Airborne Disease and N95 Waste,” (NYT).

Around the World

Europe Sees Rise in Infections Due to BA.4 and BA.5

Across Europe, a summertime surge of the coronavirus is being driven by the Omicron subvariants known as BA.4 and BA.5. Health officials say the relaxation of most Covid policies in the spring have combined with the more transmissible variants. Known cases in Europe rose to 57 cases per 100,000 as of Wednesday from 33 cases per day per 100,000 just two weeks earlier, according to the Center for Systems Science and Engineering at Johns Hopkins University. The New York Times notes, “That is the sharpest increase—a rise of about 70 percent—of any region of the world over the same period.” But similar to the U.S., Europe’s newest wave could be much worse than it seems due to “almost a collapse in testing,” as Dr. Michael Ryan, the executive director of the World Health Organization’s Health Emergencies Program, said last week. He added, “what we’re not seeing is an increase in intensive care unit admissions, so the vaccines are still very much working.”

Britain’s Next Prime Minister Inherits Pandemic Complications

Britain’s next prime minister will be facing a multitude of challenges in governing the country: the largest drop in real incomes in the U.K. since the 1950s, inflation forecast to touch 11% by the end of the year, and a deep erosion of public trust in the political institutions that run the country (WSJ). Former Prime Minister Boris Johnson resigned after a series of scandals, including parties at Downing Street during Covid-19 lockdowns and appointing a man who Johnson knew had a complaint upheld against him for sexual harassment to a senior government role. Johnson’s key achievement in office was securing the country’s exit from the European Union, but that departure has been rocky and further complicated by the coronavirus pandemic and now, the war in Ukraine as supply chain issues and trade agreements remain unresolved.

Macau Closes All Casinos

On Monday, Macau closed all its casinos for the first time in more than two years in order to contain the worst coronavirus outbreak yet in the area. The city is the world’s largest gambling hub but the 30-plus casinos and its other businesses will be shuttered for one week as residents were ordered to stay home. Economic analysts predict that the recovery in gaming revenue might not happen until the end of the third quarter (Reuters). Macau recorded around 1,500 infections since mid-June and around 19,000 people are in mandatory quarantine.

U.S. Government & Politics

Schumer Tests Positive for Covid

On Sunday, a spokesperson announced that Senate Majority Leader Chuck Schumer (D-NY), had tested positive for Covid (CNN, WaPo). The spokesperson stated, “As a part of his regular testing regimen, Leader Schumer received a positive test result for COVID-19. The Leader is fully vaccinated and double boosted, and has very mild symptoms.” As a result, Schumer will isolate. The Washington Post notes, “The majority leader was expected to meet privately with Sen. Joe Manchin III (D-W.Va.) this week to work out a spending deal that would lower health-care costs and combat climate change, according to two people familiar with the matter, who spoke on the condition of anonymity to describe the deliberations.”

Commerce Secretary: We Shouldn’t Talk Ourselves Into a Recession

On Sunday, Secretary of Commerce Gina Raimondo expressed optimism that the U.S. will avoid a recession and warned against talking the U.S. into one (Politico). On ABC, she downplayed the risk of a “serious recession,” instead predicting, “a more steady growth.” She stated, “I do think at some point, you know, we will see a less rapid growth in the economy, but I don’t see any reason to think that we will have a serious recession,” adding, “We recovered all the jobs since the pandemic. People’s household balance sheets are strong. Companies are doing well. Companies are hiring. Companies are growing.” Raimondo noted that inflation is a problem, but added, “I don’t think we should be talking ourselves into a recession.”

U.S. Economy

Bonus Read: “The Stock Market Faces Next Test as Inflation Looms Over Earnings Season,” (WSJ).

Jobless Claims Rise Slightly, Still Near Pre-Pandemic Levels

According to data released by the Labor Department on Thursday applications for unemployment increased slightly last week, but claims remain near pre-pandemic levels (WSJ). The Wall Street Journal writes, “Initial jobless claims, a proxy for layoffs, rose to a seasonally adjusted 235,000 last week from 231,000 the week before, the Labor Department said Thursday. The figure stands just above the 2019 prepandemic weekly average of 218,000, when the labor market was also strong.” Despite the slight uptick, the Journal concludes, “The report indicates that the job market remains tight even though other parts of the economy are losing steam as the Federal Reserve aggressively raises interest rates to combat high inflation.” Meanwhile, a report on Friday showed that the unemployment rate held steady at record low levels in June with the addition of 372,000 jobs, prompting relief at the White House, which touted the report as a sign the economy is doing better than some have portrayed it (WaPo).

Housing Market Shows Signs of Cooling

The Washington Post reports that the housing market is showing signs of cooling off from a period of pandemic driven high demand (WaPo). The Post writes, “The volume of U.S. monthly home sales registered double-digit declines in the past year, according to estimates from Zillow and the National Association of Realtors. In May alone, the number of houses sold is down 19 percent from the previous year, and preliminary data suggests the falloff was more pronounced in June.” The cooling market is not necessarily good news for buyers. Jeff Tucker, a senior economist at Zillow, told the Post, “The market is cooling off, but that cooling has happened on the backs of buyers getting discouraged, on buyers being forced out of the market.” The Post writes, “The slowdown has, so far, provided little relief to buyers. Instead, analysts say, a growing affordability crisis, driven by the collision of inflation and rising interest rates, is forcing many potential buyers to walk away.”

Freight Rates Fall

Freight rates are falling, as pandemic-driven high demand falls and companies renegotiate contracts (WSJ). The Wall Street Journal writes, “The reduction in transportation costs is good news for manufacturers and retailers after two years of rapidly rising expenses. It also suggests the contribution of the freight sector to inflation is at least leveling off. But shippers note they are still paying several times more than they did before the Covid-19 pandemic snarled supply chains world-wide.” The Journal adds, “The situation is a sharp turnaround for shippers who at the start of 2022 were willing to pay record-high contract rates to guarantee space on container ships ahead of this year’s fall and winter peak shipping seasons following severe delays and inventory shortages through much of 2021,” citing an importer saying it had negotiated a 15 to 20% decline in rates compared to rates just months prior.

Bonus Read: “Fed Up With China, One Boss Tries Removing It From the Supply Chain,” (WSJ). 

Analysis & Arguments

Ian Bogost writes that hybrid work is doomed (Atlantic).

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The Brief is edited by David Sterman and Emily Schneider with Senior Editor Peter Bergen.

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