U.S. companies lose hope for a quick rebound as COVID-19 cases surge

Signs of a closed store due to COVID-19 in Niles, Illinois, May 21, 2020. /AP

The fierce resurgence of COVID-19 cases in early June, especially in the south and west,isputting economic recovery in jeopardyas over a thousand scientists criticized Trump for his coronavirus response.

So far, there have been nearly 3.9 million confirmed cases in the U.S., with more than 141,000 death, a toll that experts warn will likely surge following recent record spikes in case numbers and an alarming rise in hospitalizations in dozens of states.

Businesses from airlines to restaurant chainsaredownsizing production indefinitely and turningfurloughs into permanent layoffs. This has thrown a wrench into those hoping to return to work soon and has forced more consumers to freeze spending.

Last Wednesday, American Airlines warned workers that it may have to cut up to 25,000 jobs in October because of sharply reduced air travel. United Airlines warned 36,000 of its employees two weeks ago that they may lose their jobs.

According to a recent paper from Becker Friedman Institute at the University of Chicago, more than 40percent of the layoffs that were intended to be temporary in Aprilwhen lockdowns began is likelyto become permanent.

The International Monetary Fund (IMF) predicted last Friday that the U.S. economy will shrink by 6.6percentthis year, andthe unemployment rate (11.1 percent in June) will remain elevatednext year, the IMF said.

Since the coronavirus outbreak, U.S. President Donald Trump has been at loggerheads with scientists over the country's coronavirus containment policies, publicly refusing to wear face mask and urging people to get back to work as soon as possible despite scientists' warning of risks.

Empty United Airlines ticket machines are shown at Tampa International Airport in Tampa, Florida, April 24, 2020. /AP

In a rare open letter to the Trump administration, over 1,200 members of the U.S.National Academy of Sciences (NAS)rebuked Trump's coronavirus responses, claiming the Trump administration has underestimated the COVID-19 outbreak, ignoring expert advice, including physical distancing, wearing masks and avoiding crowds.

Dr. Anthony Fauci, U.S. government's top infectious diseases expert, on numerous occasions warned that reopening economy too soon could trigger fresh and uncontrollable outbreaks of COVID-19.

He acknowledged that the coronavirus and shutdown measures have hit the U.S. economy "very severely," but emphasized that reopening the economy and returning to normality can only happen when the country gets the coronavirus under control, adding coronavirus containment is not at odds with reopening.

As the coronavirus cases continue surging in the country, Trump finally began to encourage people to wearmasks in his briefing at the White House on the pandemicon Tuesday, after months of downplaying the importance of it.

However, for most businesses and families, this is too late. Trump's coronavirus response has already inflicted disastrous damages.

Eric Benz, who worked as a graphic designer in Atlanta before the pandemic, was laid off in March. At the time, he didn't worry very muchandfelt sure he'd be recalled to work once the viral pandemic eased and his firm's clients resumed spending.

However, three months later, there's been no call. Instead, Benz has applied for gig work as an Instacart shopper.

Hope has given way to an urgent need to pay bills because Benz's unemployment benefits haven't yet come through. Benz has negotiated with his mortgage lender to defer payments on the home he and his wife bought earlier this year. But the deferral won't last long.

"I'm doing everything I can," said Benz, 37. "It will take a little while to get back."

(With input from agencies)