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Analysis raises questions about coronavirus shutdown's effectiveness

Lockdowns designed to slow the spread of COVID-19 were justified initially but likely failed to “alter the course of the pandemic,” according to a statistical analysis by JPMorgan Chase that suggests restarting the U.S. economy may not lead to the second wave of infections that health officials fear.

Stay-at-home orders issued by governors across the U.S. over the past two months forced the closure of many businesses and put a halt to most travel, costing nearly 39 million Americans their jobs on at least a temporary basis. The U.S. economy is now witnessing its sharpest economic contraction of the post-World War II era.

“Unlike rigorous testing of potential new drugs, lockdowns were administered with little consideration that they might not only cause economic devastation but potentially more deaths than COVID-19 itself," wrote Marko Kolanovic, a quantitative strategist at the lender's investment bank.

Critics of the lockdowns have argued they would also lead to an increase in mental health problems and prevent the detection of other illnesses as people visit doctors less often. Health and government officials, however, have maintained the toll of the virus would have been far higher without the restrictions than the nearly 4.9 million infections recorded worldwide, which have led to 329,000 deaths.

New York, which is the country's biggest, densest city and an infection hot spot, is working toward a partial reopening in June, thanks to compliance among the city's 8 million residents with shelter-in-place orders, social distancing protocols and facial mask guidelines, Mayor Bill de Blasio said Thursday.

But what has happened after reopenings in other parts of the country, such as Florida, indicates that lockdowns might not have been the driving force in curbing infections, JPMorgan's Kolanovic said.

Infection rates continued to decline virtually everywhere once familiar routines were resumed, he noted, which indicates the disease's spread may have been diminished by factors as increased hand-washing and sanitizing, the arrival of warmer weather in the northern hemisphere and the fact that the people most vulnerable to COVID-19 had already contracted it.

Florida, which was one of the first states to begin reopening, has seen the number of new cases hold steady since partially lifting its lockdown orders on May 4.

Republican Gov. Ron DeSantis pushed back in a press briefing on Wednesday against the narrative that Florida was irresponsible in its reopening plan, pointing to his state’s lower death rate than places like Illinois, Ohio, Washington, D.C., Alabama and elsewhere.

“We've succeeded. And I think that people just don't want to recognize it because it challenges their narrative. It challenges their assumption,” he said. “So they've got to try to find a bogeyman.”

Still, some parts of the world have seen infections pick up after lifting restrictions: A resurgence has been reported in China, Hong Kong and South Korea.

The data available so far have fueled debate over what the U.S. should do next, in some cases deepening partisan fault lines, Kolanovic wrote. That's likely to continue, with implications not only for economic growth and financial market performance but for November's presidential election.

Typically, incumbents have had a difficult time winning a second term when the economy is in recession in the 24 months ahead of an election, losing five of seven campaigns since the end of World War I. They have been a perfect 11 for 11 when the economy did not experience a recession in the two years ahead of the election.

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