coronavirus fallout
June 2, 2020

Over the course of the last three months, the Treasury Department has disbursed $146 billion in unemployment benefits to Americans who have lost their jobs as a result of the coronavirus pandemic, Bloomberg reports.

That's more than in all of 2009, when unemployment peaked following the financial crisis, but it's still reportedly only two-thirds of what's actually owed. The total bill, Bloomberg reports, should have reached $214 billion by now, which means millions of Americans have yet to receive their benefits.

Things aren't going to get easier, either — millions still haven't had their jobless claims processed, and Bloomberg reports that its calculations about what's currently owed are probably understated. A spokesperson for the Labor Department told Bloomberg that "it is also challenging to use these numbers because states are struggling to keep up with demand and some have backlogs they are working through," even as some, like Texas, have expanded call centers and brought in other government workers to help with the claims. Read more at Bloomberg. Tim O'Donnell

June 1, 2020

In response to a request from Senate Minority Leader Chuck Schumer (D-N.Y.), Phillip Swagel, the director of the Congressional Budget Office, outlined Monday what the next decade could look like for the United States if current economic trends continue.

In his letter, Swagel said the coronavirus pandemic prompted the CBO to significantly alter their economic projections in the span of a few months. Their estimate for the level of nominal GDP in the second quarter of 2020 is now 14.2 percent lower than it was in January. Things improve slightly after that — the difference in the January and May estimates is 9.4 percent for the end of 2020 and 2.2 percent by the end of 2030 — but, all told, that means the cumulative nominal economic output over the next decade is nearly $15.7 trillion less than the agency had pegged in January. Adjusted for inflation, that figure comes in at 7.9 trillion.

Schumer, in a joint statement with Sen. Bernie Sanders (I-Vt.), pointed to those numbers as a reason why "the Senate must act with a fierce sense of urgency to make sure that everyone in America has the income they need to feed their families and put a roof over their heads," rather than waiting to pass more legislation. Tim O'Donnell

May 23, 2020

There's been a lot of talk about the hard-hit airline industry during the coronavirus pandemic, but the decision by the United States' No. 2 car rental firm Hertz to file for bankruptcy protection Friday is just another example of how much the travel industry as a whole is reeling.

Hertz, which was founded in 1918, has struggled since the pandemic severely reduced global travel, and its lenders were unwilling to grant another extension on its auto lease debt payments beyond Friday's deadline. The Associated Press notes the filing wasn't much of a surprise as the company warned in its first-quarter report that it may not be able to repay or refinance debt or have enough cash to keep operating (though it will continue to do so, along with its subsidiaries, during the process.)

By the end of March, the company accrued more than $24 billion in debt and was unable to generate revenue after travel largely shut down. Around that time, Hertz laid off 12,000 workers, furloughed 4,000, cut vehicle acquisitions by 90 percent, and stopped all nonessential spending, but the moves proved too late. Read more at The Associated Press and Reuters. Tim O'Donnell

May 19, 2020

The Congressional Budget Office's updated economic projections for 2020 and 2021 revealed just how brutal the coronavirus pandemic has been for the leisure and hospital sector.

The CBO estimates the industry lost 48.3 percent of its jobs, or 8.6 million total, in March and April.

Looking toward the future, the latest projections are far from rosy, and leisure and hospitality isn't the only sector of the U.S. economy that will deal with the fallout. Real GDP is expected to shrink by 11.2 percent in the second quarter of 2020, before growing by 5 percent in the third. The CBO pegged unemployment to peak at 15.8 percent in the 2020's third quarter before gradually dropping until it settles at 8.6 percent by the end of 2021.

There's clearly no good news in those numbers, but it is actually a slight improvement from the CBO's April projections. Tim O'Donnell

May 18, 2020

The falling rate of routine vaccinations for young children in the United States during the coronavirus pandemic could lead to measles outbreaks in the future, the Centers for Disease Control and Prevention warned in a report published Monday.

Aside from hepatitis B vaccines, which are typically administered in the hospital at birth, the CDC found that vaccinations fell across all age groups among babies and toddlers after analyzing immunization data from Michigan. The decline is likely linked to more Americans skipping doctors' appointments because of the pandemic.

For the 16-month age group, coverage for all recommended vaccines declined, the report found, including measles-containing vaccinations, which dropped from 76.1 percent in May 2019 to 70.9 percent this year. "The observed declines in vaccination coverage might leave young children and communities vulnerable to vaccine-preventable diseases such as measles," the CDC wrote in its findings. "If measles vaccination coverage of 90 percent to 95 percent (the level needed to establish herd immunity) is not achieved, measles outbreaks can occur."

Of course, last May's numbers figures fall short of the herd immunity figure, as well, and there have been multiple outbreaks in the U.S. over the last few years. Tim O'Donnell

May 16, 2020

J.C. Penney filed for bankruptcy Friday, becoming the largest and fourth major retailer to do so during the coronavirus pandemic.

Neiman Marcus, J. Crew, and Stage Stores had previously filed, and many others are expected to follow suit as U.S. retail sales plummeted by a record 16.4 percent from March to April. Penney, which has been around for 118 years, said it will close some stores throughout the process.

CEO Jill Soltau said the company had made "significant progress" in its rebuilding efforts before the pandemic hit, but the virus has "created unprecedented challenges."The Associated Press reports that many experts are now skeptical about its long-term survival, even as the retail giant looks at a few different options, including the sale of the company, to save itself.

That's because its middle-to-low income customers have been hit the hardest by coronavirus-related layoffs. When they eventually return to shopping there's a good chance they'll choose Penney's discounter competitors, like Macy's, T.J. Maxx, or Walmart, Ken Perkins, president of retail research firm Retail Metrics, said. All of those companies had already presented a challenge for Penney, which has seen five straight years of declining sales. Read more at CNN and The Associated Press. Tim O'Donnell

May 2, 2020

Coronavirus lockdowns across the U.S. may be helping clear the air of pollution, but the pandemic has also led to a setback for the country's renewable energy industry, The Associated Press reports.

The wind and solar sectors were on good footing before the pandemic struck but now trade groups are predicting as many as 120,000 jobs in solar and 35,000 in wind could be lost when all is said and done. "There are many smaller companies going out of business as we speak," said Abigail Ross Harper, president of the Solar Energy Industries Association. "Up to half our jobs are at risk."

The wind industry is struggling to get parts from overseas, while residential solar businesses are taking the brunt of the hit in that industry since door-to-door sales aren't possible anymore, and individual customers are being cautious during the downturn. Subsequently, new solar installations could drop 17 percent this year, while wind manufacturing could fall up to 20 percent, consulting firm Wood McKenzie estimates.

"The industry was on a tremendous roll right up until the last month or two," said Tom Kiernan, CEO of the American Wind Energy Association. "That reversal is stunning and problematic."

But while the pandemic has caused the industry pain, there's a sense things will turn around again in the long run. Andrew Pershing, the chief scientific officer with Gulf of Maine Research Institute in Portland, Maine, for example, hopes the pandemic eventually results in an economy "that doesn't depend on burning coal and oil." Read more at The Associated Press. Tim O'Donnell

April 23, 2020

In an open letter to Congress sent Wednesday, National Independent Venue Association Board President Dayna Frank requested that independent venues have special consideration in acquiring Paycheck Protection Program loans to cover expenses during the coronavirus pandemic, reports Billboard.

More than 800 U.S. venues are members of the association, including the historic Orpheum Theater in Flagstaff, Arizona, and comedy club The Stand NYC.

The letter asks for the PPP to include industry-specific provisions, like increasing its loan cap to cover multiple venue locations and allowing tax relief for refunded tickets. "Our businesses were among the first to close as COVID-19 spread across the country and, unfortunately, are also likely to be among the last to reopen," the letter reads.

Frank, who owns a music venue in Minneapolis, says the coronavirus pandemic has resulted in ticket refunds for more than 100,000 concerts. She argued the importance of small venue stages not only in local communities but also in the music industry as a whole. "The world could be without the next Lady Gaga, Kenny Chesney, Chance the Rapper, or Bruce Springsteen if we cease to exist," Frank wrote.

Members of the music industry have also turned to other measures to get by. Rather than waiting for federal relief funding, artists like Moksha Sommer have sought aid from nonprofits like MusiCares, which launched March 17 and has already raised more than $10 million, Billboard reports. Sommer is one of 9,000 who received a one-time aid check of $1,000. Sommer said the funding will help her pay bills and plan for the future, but Frank told congressional leaders the industry at large is in dire need of a larger "lifeline." Read more at Billboard. Diana Riojas

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