Trending News

Get Your Daily Dose of Trending News


A Penny for Your Thoughts Could Be a Lot Harder to Find


WASHINGTON — Randy Graham, the chief executive of the First National Bank of Tennessee, was surprised to learn in mid-June that the Federal Reserve would not be filling his entire order of pennies, nickels, dimes and quarters.

The reason: The nation’s coin supply was coming up short.

In the latest indication of how the coronavirus is disrupting life in unexpected ways, the flow of coins has become gummed up as consumers stayed home and avoided touching physical cash. In particular, customers have not been dumping their piggy banks into kiosks at grocery stores in exchange for bills.

As the country has begun to reopen, the supply of coins has failed to keep up with renewed demand for a type of currency that, even in an increasingly digital world, remains essential to business.

“Many businesses are dependent on the coin — they don’t need the disruption,” Mr. Graham said. He was told that his allocation would be cut drastically, to less than half of its usual total. Mr. Graham received about 40 percent of his usual order this week, and expects that to persist into early July.

“If this lasts any length of time, there’s no question that we’ll be looking at our customer base and saying, ‘Sorry, don’t have it,’” he said.

Even as digital payments become more of the norm in America, change remains crucial to some parts of the economy: Parking meters, vending machines, amusement parks and even campground showers have kept coins in regular use.

The U.S. Mint manufactures America’s coins, and the Federal Reserve distributes them across the country. As typical coin circulation has been disrupted by the pandemic, those institutions have had to change their normal practices to solve the problem, with the Fed allocating coins to banks based on their historical order sizes and the Mint ramping up new coin shipments to pump fresh supply into the system.

“What’s happened is that with the partial closure of the economy, the flow of coins through the economy, it has gotten all — it’s kind of stopped,” Jerome H. Powell, the chair of the Fed, told lawmakers while testifying on Capitol Hill last week. “We’ve been aware of it, we’re working with the Mint to increase supply, we’re working with the reserve banks to get the supply to where it needs to be.”

Treasury Secretary Steven Mnuchin said on Tuesday that he believed the shortage would be solved. He noted that the staff at the Bureau of Engraving and Printing worked throughout the lockdown to ensure that cash was delivered to the Federal Reserve so it could be distributed to banks.

“As it relates to coins, so many businesses shut down, a lot of coins got stuck in the system, so we are a little bit far behind on coins,” Mr. Mnuchin said at a virtual investment summit sponsored by Bloomberg. “But I know they are redoubling their efforts and that will work out fine.”

The Fed began to ration its coin supply on June 15, giving banks a portion of their requested change supply depending on what they had historically requested, among other factors, a move that the central bank says is a “temporary measure.”

The strategy will remain in place as long as necessary, a Fed spokeswoman said Wednesday, pointing out that change needs to begin circulating through commerce for things to go back to normal.

“The coin shortage has been mainly caused by coins not re-entering distribution,” Michael White, a spokesman for the Mint, said in an emailed statement. “With businesses opening back up, we expect that the situation will improve as Americans return their coins to banks or recycling machines for redistribution.”

Coin shipments are also ramping up, he said, as the Mint puts safeguards into place so manufacturers can work safely. Facilities in Denver and Philadelphia returned to full production staffing levels on June 15 after reducing employees per shift earlier in the pandemic, he said.

  • Updated June 24, 2020

    • Is it harder to exercise while wearing a mask?

      A commentary published this month on the website of the British Journal of Sports Medicine points out that covering your face during exercise “comes with issues of potential breathing restriction and discomfort” and requires “balancing benefits versus possible adverse events.” Masks do alter exercise, says Cedric X. Bryant, the president and chief science officer of the American Council on Exercise, a nonprofit organization that funds exercise research and certifies fitness professionals. “In my personal experience,” he says, “heart rates are higher at the same relative intensity when you wear a mask.” Some people also could experience lightheadedness during familiar workouts while masked, says Len Kravitz, a professor of exercise science at the University of New Mexico.

    • I’ve heard about a treatment called dexamethasone. Does it work?

      The steroid, dexamethasone, is the first treatment shown to reduce mortality in severely ill patients, according to scientists in Britain. The drug appears to reduce inflammation caused by the immune system, protecting the tissues. In the study, dexamethasone reduced deaths of patients on ventilators by one-third, and deaths of patients on oxygen by one-fifth.

    • What is pandemic paid leave?

      The coronavirus emergency relief package gives many American workers paid leave if they need to take time off because of the virus. It gives qualified workers two weeks of paid sick leave if they are ill, quarantined or seeking diagnosis or preventive care for coronavirus, or if they are caring for sick family members. It gives 12 weeks of paid leave to people caring for children whose schools are closed or whose child care provider is unavailable because of the coronavirus. It is the first time the United States has had widespread federally mandated paid leave, and includes people who don’t typically get such benefits, like part-time and gig economy workers. But the measure excludes at least half of private-sector workers, including those at the country’s largest employers, and gives small employers significant leeway to deny leave.

    • Does asymptomatic transmission of Covid-19 happen?

      So far, the evidence seems to show it does. A widely cited paper published in April suggests that people are most infectious about two days before the onset of coronavirus symptoms and estimated that 44 percent of new infections were a result of transmission from people who were not yet showing symptoms. Recently, a top expert at the World Health Organization stated that transmission of the coronavirus by people who did not have symptoms was “very rare,” but she later walked back that statement.

    • What’s the risk of catching coronavirus from a surface?

      Touching contaminated objects and then infecting ourselves with the germs is not typically how the virus spreads. But it can happen. A number of studies of flu, rhinovirus, coronavirus and other microbes have shown that respiratory illnesses, including the new coronavirus, can spread by touching contaminated surfaces, particularly in places like day care centers, offices and hospitals. But a long chain of events has to happen for the disease to spread that way. The best way to protect yourself from coronavirus — whether it’s surface transmission or close human contact — is still social distancing, washing your hands, not touching your face and wearing masks.

    • How does blood type influence coronavirus?

      A study by European scientists is the first to document a strong statistical link between genetic variations and Covid-19, the illness caused by the coronavirus. Having Type A blood was linked to a 50 percent increase in the likelihood that a patient would need to get oxygen or to go on a ventilator, according to the new study.

    • How many people have lost their jobs due to coronavirus in the U.S.?

      The unemployment rate fell to 13.3 percent in May, the Labor Department said on June 5, an unexpected improvement in the nation’s job market as hiring rebounded faster than economists expected. Economists had forecast the unemployment rate to increase to as much as 20 percent, after it hit 14.7 percent in April, which was the highest since the government began keeping official statistics after World War II. But the unemployment rate dipped instead, with employers adding 2.5 million jobs, after more than 20 million jobs were lost in April.

    • What are the symptoms of coronavirus?

      Common symptoms include fever, a dry cough, fatigue and difficulty breathing or shortness of breath. Some of these symptoms overlap with those of the flu, making detection difficult, but runny noses and stuffy sinuses are less common. The C.D.C. has also added chills, muscle pain, sore throat, headache and a new loss of the sense of taste or smell as symptoms to look out for. Most people fall ill five to seven days after exposure, but symptoms may appear in as few as two days or as many as 14 days.

    • How can I protect myself while flying?

      If air travel is unavoidable, there are some steps you can take to protect yourself. Most important: Wash your hands often, and stop touching your face. If possible, choose a window seat. A study from Emory University found that during flu season, the safest place to sit on a plane is by a window, as people sitting in window seats had less contact with potentially sick people. Disinfect hard surfaces. When you get to your seat and your hands are clean, use disinfecting wipes to clean the hard surfaces at your seat like the head and arm rest, the seatbelt buckle, the remote, screen, seat back pocket and the tray table. If the seat is hard and nonporous or leather or pleather, you can wipe that down, too. (Using wipes on upholstered seats could lead to a wet seat and spreading of germs rather than killing them.)

    • What should I do if I feel sick?

      If you’ve been exposed to the coronavirus or think you have, and have a fever or symptoms like a cough or difficulty breathing, call a doctor. They should give you advice on whether you should be tested, how to get tested, and how to seek medical treatment without potentially infecting or exposing others.

The Mint will ship 1.2 billion coins during June, Mr. White said, and is on track to increase that to 1.35 billion coins every month for the rest of 2020. Typically, the number is close to 1 billion per month.

Still, there’s a risk that the crunch in cold hard cash in the United States could touch off literal penny hoarding as businesses become nervous that they will not get the coins they need to make change for customers.

Mr. Graham in Tennessee said that he had been able to meet all ordinary business requests for change, but that some customers had asked for several months’ worth of coins to protect against a shortfall. He has not filled those requests.

The coin shortage could renew the debate about the fate of the penny, which has faced calls for abolition because its purchasing power has fallen and its cost of production has eclipsed its value.

For now, the disruption is expected to blow over.

“There’s plenty of coin out there. It’s just not making it to the right place at this point,” Jim Gaherity, the chief executive of Coinstar, said on CNBC this week. His company, which has kiosks that take consumers’ coins in exchange for bills, recirculates $2.7 billion worth of coins annually, he said. “We need to get it back into the system.”

Cash in circulation in general has continued to expand in the United States even as digital options become increasingly prevalent. As of June 10, there were $1.91 trillion worth of Federal Reserve notes were in circulation, based on central bank data. That has climbed significantly in recent years, as $100 bills in particular have been in demand.

Precautionary cash hoarding has skyrocketed in some coronavirus-hit economies, including the United States and Italy, the Bank for International Settlements — a financial institution that serves central banks — found in a new report out Wednesday. Even so, the institution suggested that the pandemic, which has also spurred an increase in contactless card transactions, could actually accelerate the shift toward digital payments, and away from paper cash and the newly scarce quarters and pennies.

“The Covid-19 pandemic has highlighted both the progress achieved and the remaining shortcomings in payments,” according to the report. “The crisis has amplified calls for greater access to digital payments by vulnerable groups and for more inclusive, lower-cost payment services going forward.”


Sahred From Source link Business

Leave a Reply

Your email address will not be published. Required fields are marked *