Business Highlights

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Why prospect of deflation could pose a threat to US economy

WASHINGTON (AP) — The economic paralysis caused by the coronavirus led in April to the steepest month-to-month fall in U.S. consumer prices since the 2008 financial crisis — a 0.8% drop that was driven by a plunge in gasoline prices. And excluding the normally volatile categories of food and energy, so-called core prices tumbled 0.4% last month. That was the sharpest such drop on records dating to 1957. The report raises the prospect of deflation, a prolonged drop in prices and wages that typically makes people and companies reluctant to spend and can prolong a recession. Not since the Great Depression has deflation posed a serious threat in the United States.

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Cubicle comeback? Pandemic will reshape office life for good

LONDON (AP) — Office jobs are never going to be the same. When workers around the world return to their desks, they’ll find many changes spurred by the pandemic. For a start, there will be fewer people as working from home becomes a more accepted practice. Workers who do go to the office will arrive in staggered shifts to avoid rush hour crowds. Staff might take turns working alternate days to reduce crowding. One-way paths will be laid out for better flow. Elevators could be limited to a few people at a time. Floor markings or sensors will remind people how far apart to stand. And there will be a lot more cleaning.

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Elon Musk becomes champion of defying virus stay-home orders

FREMONT, Calif (AP) — Tesla CEO Elon Musk has emerged as a champion of defying stay-home orders intended to stop the coronavirus from spreading, picking up support as well as critics on social media. Among supporters was President Donald Trump, who on Tuesday tweeted that Tesla’s San Francisco Bay Area factory should be allowed to open despite health department orders to stay closed except for basic operations. Trump wrote that the plant can be reopened safely. Tesla’s factory reopened Monday with Musk daring authorities to arrest him. The company submitted a plan to protect worker safety, which the Alameda County Public Health Department is reviewing,

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Wall Street drops after reopening worries lead to late slide

NEW YORK (AP) — Wall Street fell to its biggest loss since the start of the month on worries about the downside of reopening the economy too soon. The S&P 500 dropped 2.1% Tuesday after spending much of the day drifting between small gains and losses. Investors are debating whether the lifting of lockdowns across U.S. states and the world will drive an economic rebound or just more coronavirus infections. The concerns were summed up in straightforward testimony from the top U.S. infectious diseases expert. Dr. Anthony Fauci told Congress that if the country reopens too soon, “the consequences could be really serious.”

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Pelosi unveils $3T virus bill, warns inaction costs more

WASHINGTON (AP) — House Speaker Nancy Pelosi has unveiled a more than $3 trillion new coronavirus aid package. It would provide nearly $1 trillion for states, cities and tribal governments to avert layoffs and another $200 billion in “hazard pay” for essential workers. It would offer $1,200 in direct cash aid to individuals, up to $6,000 per household. It would also extend unemployment benefits, and there would be $75 billion more for virus testing. A House vote is expected Friday. But the Senate’s Republican leader is cautioning his colleagues not to go so fast. Senate Majority Leader Mitch McConnell says there is no “urgency” to act immediately.

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Counterfeit masks reaching frontline health workers in US

WASHINGTON (AP) — Counterfeit face masks that provide inadequate COVID-19 protection have been distributed to frontline health care workers across the country. An Associated Press investigation has tracked the masks to a U.S.-certified factory in China where legitimate medical masks are made. Adding to the confusion, millions of masks now considered inadequate for medical protection entered the U.S. and are now in use because of the federal government’s relaxed standards. Meanwhile state and local governments, hospitals, private caregivers and well wishers have spent hundreds of millions of dollars on the flawed masks. Before the pandemic, N95 masks sold for about 60 cents each. Today they’re priced as high as $6 apiece.

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US government sees record monthly deficit of $737.9 billion

WASHINGTON (AP) — The federal government piled up a record deficit in April, traditionally a month of big budget surpluses. The sea of red ink is being created by a drop in revenue and a massive increase in spending to fund to efforts to deal with the coronavirus pandemic. The Treasury Department said Tuesday that the government racked up a shortfall of $737.9 billion last month. That was more than three times larger than the previous record monthly deficit of $235 billion set in February. The deficit so far for the fiscal year that began Oct. 1 climbed to $1.48 trillion.

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The S&P 500 fell 60.20 points, or 2.1%, to 2,870.12. The Dow Jones Industrial Average fell 457.21 points, or 1.9%, to 23,764.78, and the Nasdaq composite lost 189.79, or 2.1%, to 9,002.55. The Russell 2000 index of smaller-company stocks dipped 45.70, or 3.5%, to 1,275.54.