U.S. Economic News

U.S. Economic News

July 13, 2020

U.S. News

The Washington Post reports that tens of thousands of workers throughout the country are still waiting to receive unemployment payments after the flood of applications earlier in the pandemic overwhelmed state unemployment systems. The delay in disbursing benefits has frustrated workers who have been forced to default on debt payments and turn to food banks and other safety net programs to make ends meet as they wait for claims to be reviewed and benefits to be paid out. WaPo

Bloomberg reports that discrepancies in reported data for Paycheck Protection Program (PPP) loans raise concerns about the accuracy of estimates for the number of jobs saved by the program. The lack of consistent reporting by lenders and applicants for businesses’ number of employees could present challenges for small businesses applying for loan forgiveness as the program requires that a certain level of jobs be maintained to qualify. Bloomberg

U.S. Economic News

U.S. Economic News

July 10, 2020

U.S. Economic Indicators

The headline Producer Price Index (“PPI”) for final demand fell 0.2% in June and is down 0.8% year-over-year. The core – which removes the volatile prices of food, energy, and trade services – rose 0.3% in June, the largest increase since January, but is down 0.1% from a year ago. BLS Report

U.S. News

The Washington Post reports that state transportation departments face an estimated $50 billion shortfall in funding due to the loss of tax revenue from gasoline, forcing states to delay much-needed infrastructure projects. Transportation organizations are urging Congress to close the budget gap in an additional stimulus package, arguing that such a measure would help bring back jobs and provide a boost to productivity. WaPo

Bloomberg reports that U.S. banks are expected to reveal their worst quarterly performance since the financial crisis when second quarter results are released next week. Banks have combated the rise in unemployment and consumer spending slowdown by increasing loan-loss provisions to post-2008 highs, a hit to earnings that has been partially offset by trading revenue and refinancing activity. Bloomberg

U.S. Economic News

U.S. Economic News

July 9, 2020

U.S. Economic Indicators

Initial jobless claims fell 99,000 to 1,314,000 last week. The four-week moving average fell 63,000 to 1,437,250. DOL Report

U.S. News

The Wall Street Journal reports that despite a rocky start to the Main Street Lending Program, Federal Reserve officials overseeing the program expect it to provide critical insurance if rising coronavirus cases cause the economic disruption to worsen. Since its creation in April, the program has suffered from limited interest from both banks and borrowers, though Fed officials remain resolute that loans through the program will eventually take off. WSJ

According to the Washington Post, in an effort to limit the size of the coming relief package, conservative lawmakers and White House officials are deliberating reducing the income threshold for a second round of stimulus payments. However, the persistent economic turmoil of the crisis alongside the high administrative burden of more targeted payments lead some experts to believe that GOP leadership is likely to back off the proposal to curb payments. WaPo

U.S. Economic News

U.S. Economic News

July 8, 2020

U.S. News

The Wall Street Journal reports the coronavirus-induced recession has forced state and local governments to cut 1.5 million jobs thus far – mostly concentrated in the education sector – with more job losses expected in the months to come. While states have largely avoided raising taxes by cutting spending and dipping into reserves, this may change as uncertainty about the virus and future revenues rise. WSJ

According to the Financial Times, recovery in the retail sector is beginning to flat-line as foot traffic at U.S. malls begins to decline, especially in areas that are experiencing large increases in COVID cases. In these areas, some executives have discussed re-closing stores until the virus subsides – a troubling sign for many debt-laden retailers who are relying on improving sales to avoid bankruptcy. FT

U.S. Economic News

U.S. Economic News

July 7, 2020

U.S. Economic Indicators

The Job Openings and Labor Turnover Survey (“JOLTS”) report indicates that the number of job openings increased 401,000 to 5.4 million in May. The number of hires increased to a series high of 6.5 million, while the quits rate rose to 1.6 percent. BLS Report

U.S. News

Bloomberg reports that U.S. house prices are expected to experience the first annual decline since 2012 during the 12 months ending May 2021, falling by an estimated 6.6% according to a recent forecast by CoreLogic. As the pandemic wears on and unemployment remains elevated, the recent buying spree driven by pent-up demand and low interest rates will ease, causing home prices to decline overall. Bloomberg

According to the Wall Street Journal, the OECD predicts that the jobless rate for OECD members will hit 9.4% in the final three months of the year – the highest level since the 1930s – and could rise as high as 12.6% if there is a second wave of coronavirus outbreaks. The research group warned that the premature withdrawal of government stimulus and wage subsidy schemes could hinder recovery, and is advocating for the creation of additional government programs to encourage hiring. WSJ