US layoffs impact small business loans
The US jobless claims data expected to show another 1.35 million people applying for unemployment benefits
By John BIERS
The US economy continues to bleed jobs in the aftermath of Covid-19 shutdowns, even as the economy reopens and despite federal initiatives like the pay check protection programme (PPP).
The PPP programme aims to mitigate some of the downturn's harshest impacts of the pandemic.
Faced with then near-complete shutdown of travel, and a devastating hit to its business from the coronavirus, arrangements abroad mobilized to secure a US$597 000 loan under the pay check protection program (PPP).
The funds allowed the New York company to pay salaries for a couple of months, but last week it laid off six of 30 employees.
The US jobless claims data due out Thursday is expected to show another 1.35 million people applied for unemployment benefits last week, fewer than the prior week, but many times the pre-pandemic levels.
Persistent unemployment
Federal Reserve Chair Jerome Powell also has warned of the dangers of persistent unemployment that he said would "negate the gains made by many disadvantaged Americans during the long expansion."
The steady stream of layoffs also points to the PPP's mixed record, with some companies still cutting jobs, and others like Minnesota's legacy toys still unable to rehire a majority of staff.
PPP, which provides forgivable loans to coronavirus-impacted small businesses to cover employee salaries and some expenses, was crafted by a bipartisan coalition in congress as part of the US$2 trillion cares Act.
The initiative had a troubled rollout as a massive number of applications repeatedly crashed the small business administration's computer systems.
The first round was quickly drained by loans to NBA teams and large companies like Ruth's Chris Steakhouse that sparked outrage. Those funds were later returned.
More recently, lawmakers have criticized president Donald Trump's administration for its refusal to release information on recipients, saying the lack of transparency has marred public confidence and raised questions about whether it has adequately supported minority-owned businesses.
Still, many analysts credit the PPP with helping to support US employment and believe the program helped fuel the surprise 2.5 million increase in jobs in May.
Friedlander said the PPP provided his company a chance to reposition itself for the coming months, when domestic travel is expected to recover more quickly, and it kept employees from adding to the burden of overwhelmed state unemployment offices. -Nampa/AFP
The US economy continues to bleed jobs in the aftermath of Covid-19 shutdowns, even as the economy reopens and despite federal initiatives like the pay check protection programme (PPP).
The PPP programme aims to mitigate some of the downturn's harshest impacts of the pandemic.
Faced with then near-complete shutdown of travel, and a devastating hit to its business from the coronavirus, arrangements abroad mobilized to secure a US$597 000 loan under the pay check protection program (PPP).
The funds allowed the New York company to pay salaries for a couple of months, but last week it laid off six of 30 employees.
The US jobless claims data due out Thursday is expected to show another 1.35 million people applied for unemployment benefits last week, fewer than the prior week, but many times the pre-pandemic levels.
Persistent unemployment
Federal Reserve Chair Jerome Powell also has warned of the dangers of persistent unemployment that he said would "negate the gains made by many disadvantaged Americans during the long expansion."
The steady stream of layoffs also points to the PPP's mixed record, with some companies still cutting jobs, and others like Minnesota's legacy toys still unable to rehire a majority of staff.
PPP, which provides forgivable loans to coronavirus-impacted small businesses to cover employee salaries and some expenses, was crafted by a bipartisan coalition in congress as part of the US$2 trillion cares Act.
The initiative had a troubled rollout as a massive number of applications repeatedly crashed the small business administration's computer systems.
The first round was quickly drained by loans to NBA teams and large companies like Ruth's Chris Steakhouse that sparked outrage. Those funds were later returned.
More recently, lawmakers have criticized president Donald Trump's administration for its refusal to release information on recipients, saying the lack of transparency has marred public confidence and raised questions about whether it has adequately supported minority-owned businesses.
Still, many analysts credit the PPP with helping to support US employment and believe the program helped fuel the surprise 2.5 million increase in jobs in May.
Friedlander said the PPP provided his company a chance to reposition itself for the coming months, when domestic travel is expected to recover more quickly, and it kept employees from adding to the burden of overwhelmed state unemployment offices. -Nampa/AFP
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