Looking ahead at what the world will be like after the coronavirus is challenging, but today’s news suggest at least two likely outcomes.
First, the bad news. The President of the Federal Reserve Bank of Boston predicted that the unemployment rate in the United States would remain at 10% or above, even until the end of the year. In a webinar hosted by the New England Council, Boston Fed President Eric Rosengren said the unemployment rate, measured at 14.7% in April, could rise to nearly 20%. The Congressional Budget Office offered a slightly sunnier look, predicting that the economy would begin to bounce back in the third quarter, but that GDP would not rise to pre-COVID-19 heights until after 2021.
Secondly, the refocus on world supply chains, for better or worse, is likely to increase the pressure on the U.S. government and corporations to reshore their operations from overseas.
A Promising Vaccine?
Moderna, a Cambridge, Massachusetts-based biotech company, made headlines Monday for its vaccine candidate, which was allegedly showing great promise in Phase 1 human trials. According to Stat News, a health-focused website, Moderna’s report on the vaccine did not include data on the eight subjects of 45 who developed the key “neutralizing antibodies,” information on the responses of other patients to the medicine, or, curiously, a comment from Moderna’s partner on the vaccine effort, the National Institute for Allergy and Infectious Diseases.
Refocusing on Reshoring
The Department of Health and Human Services awarded a $354 million contract to Phlow Corp., a Virginia-based pharmaceutical company dedicated to increasing the United States’ domestic supply of pharmaceuticals. The company will join with a number of private-sector partners to produce generic drugs for the United States’ Strategic National Stockpile. A number of the drugs Phlow produces are currently being used to fight the coronavirus in hospitals, leading to shortages: According to the company, the initial money from the contract has allowed them to deliver more than 1.6 million doses of sedatives, antibiotics, and painkillers. Read the full story here.
Another industry in need of reshoring attention, according to retired Brigadier General John Adams, is our mining industry. “Minerals and metals are the front end of nearly every manufacturing supply chain,” writes Adams, who is also president of Guardian Six LLC, a national security consulting firm, but despite that, almost all of the United States’ capacity for mining and producing metals has been exported to China. That’s a mistake, says Adams. “We must bring essential industries back home and reestablish our vital supply chains,” he writes. Read the full story here.
The White House announced today they were speaking with Intel about initiatives to ramp up semiconductor production in the United States. According to the Pentagon, the COVID-19 outbreak has emphasized how reliance on foreign supply chains can lead to unexpected vulnerability.