Afternoon Coffee: N95 mask manufacturing shortage; Weekly jobless claims worse than expected; California wildfires’ economic impact

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While the U.S. has caught up to demand for certain COVID-19 medical supplies, like ventilators, shortages still persist in key equipment, specifically N95 respirators, according to the Associated Press.

The demand for N95 masks has put pressure on the medical supply chain that has persisted for nearly six months. White House officials say hospitals have all medical supplies needed to battle the deadly COVID-19 virus, but others — including the Food and Drug Administration — say shortages persist.

N95 masks pose a particular manufacturing challenge as they use the meltblowing process — which turns plastic into dense mesh that makes the masks effective at blocking extremely small particles like viruses. While manufacturers say the Trump administration hasn’t made the long-term investments necessary to ramp up to full capacity, other manufacturers risk significant losses to produce a product expected to have a short-lived demand, the article said.

“I’m not going to sit here and tell you that we’re going to guarantee purchases in 2021 or whatever date you pick,” said Rear Adm. John Polowczyk, who heads FEMA’s Supply Chain Stabilization Task Force.

Weekly jobless claims worse than expected last week

The U.S. Labor Department on Thursday announced that weekly jobless claims counted 884,000 last week, but this was worse than expected, according to CNBC.

First-time filings for unemployment insurance were set to be at 850,000 for the week. The jobless claims come amid a bid to improve the economy after the initial COVID-19 disruption. Continuing claims from those filing for at least two weeks rose, hitting 13.85 million, the article reported. The Labor Department changed its methodology in how it seasonally adjusts its numbers, so it’s hard to compare reports from earlier in the pandemic.

The article reported that the U.S. economy is recovering from the unprecedented shock brought on by COVID-19. However, economists worry that a resurgence of the virus this fall could slow or reverse some progress.

How the California wildfires could affect the economy

Wildfires have blazed through California, Oregon and Washington the past few days, according to CNN. A Reuters article reported how the wildfires could affect the larger economy.

The article said effects of the wildfires could set off a cascade of events like defaults and market disruptions that can undermine the U.S. economy and spark a crisis.

Some effects could be more frequent and intense fires, which economists have traditionally treated as localized shocks. Lower home values can result from fires because around 12 million homes in California are at high risk from wildfires, which increases mortgage default risk. Insurers might retreat from coverage, especially with homes, the article said.

“You can tell the same story in terms of sea level rise and flooding and more intense storms and their impact on residential real estate value,” Dave Jones, a senior director at The Nature Conservancy, told Reuters.

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