Tag Archives: Unemployment

‘This is about livelihoods’: U.S. virus hotspots reopen despite second wave specter

By Andrew Hay

(Reuters) – Facing budget shortfalls and double-digit unemployment, governors of U.S. states that are COVID-19 hotspots on Thursday pressed ahead with economic reopenings that have raised fears of a second wave of infections.

The moves by governors of states such as Florida and Arizona came as Treasury Secretary Steven Mnuchin said the United States could not afford to let the novel coronavirus shut its economy again and global stocks tanked on worries of a pandemic resurgence.

As Florida reported its highest daily tally of new coronavirus cases on Thursday, Governor Ron DeSantis unveiled a plan to restart public schools at “full capacity” in the autumn, arguing the state’s economy depended on it.

North Carolina reported record COVID-19 hospitalizations for a fifth straight day on Thursday, a day after legislators passed a bill to reopen gyms, fitness centers and bars in a state where more than one in ten workers are unemployed.

Governors of hotspot states face pressure to fire up economies facing fiscal year 2021 budget shortfalls of up to 30% below pre-pandemic projections in the case of New Mexico, according to data from the Center on Budget and Policy Priorities think tank. Nevada, which has seen cases increase by nearly a third in the past two weeks, is suffering 28% unemployment, based on U.S Bureau of Labor statistics.

“This is about saving lives, this is also about livelihoods in the state of Arizona,” Governor Doug Ducey told a news briefing, adding that a second shutdown of the economy was “not under discussion” despite official figures showing a 211% rise in virus cases over the past 14 days.

About half a dozen states including Texas and Arizona are grappling with rising numbers of coronavirus patients filling hospital beds.

Ducey and Texas Governor Greg Abbott say their hospitals have the capacity to avoid the experiences of New York, where the system was stretched to near breaking point as some COVID patients were treated in hallways and exhausted workers stacked bodies in refrigerated trailers.

‘FOOT ON THE BRAKE’

A second wave of coronavirus deaths is expected to begin in the United States in September, the Institute for Health Metrics and Evaluation said on Thursday, citing a surge in mobility since April. Its latest model projects 170,000 deaths by Oct. 1, with a possible range between 133,000 and 290,000.

A note of caution came from Utah, where Governor Gary Herbert said most of the state would pause its reopening after a 126% rise in cases over the past two weeks.

Austin, Texas on Thursday also said it would likely extend stay-at-home and mask orders past June 15 after the state reported its highest new case count the previous day. Austin health officials blamed a record week of infections on easing business restrictions and Memorial Day gatherings.

There was no talk of new shutdowns.

In New Mexico, Health Secretary Kathy Kunkel pointed to outbreaks at the Otero County Prison Facility, as well as in nursing homes and assisted living facilities, as factors behind an uptick in cases.

“It means a little bit of a foot on the brake, watch carefully for the next couple of weeks, not much in the way of major changes in what we’re doing,” said Human Services Secretary David Scrase.

(Reporting By Andrew Hay in Taos, New Mexico; Additional reporting by Brad Brooks in Austin and David Schwartz in Phoenix; Editing by Bill Tarrant and Daniel Wallis)

U.S. consumer confidence stabilizes as economy reopens

By Lucia Mutikani

WASHINGTON (Reuters) – U.S. consumer confidence nudged up in May, suggesting the worst of the novel coronavirus-driven economic slump was probably in the past as the country starts to reopen, but it would probably take a while to dig out of the hole amid record unemployment.

The Conference Board said on Tuesday its consumer confidence index edged up to a reading of 86.6 this month from a downwardly revised 85.7 in April. Economists polled by Reuters had forecast the index rising to 87.5 in May from the previously reported reading of 86.9 in April.

Businesses across the country are opening doors after shuttering in mid-March as states and local governments took drastic measures to slow the spread of COVID-19, the respiratory illness caused by the virus, almost grounding the country to a halt. The economy contracted at its deepest pace in the first quarter since the Great Recession and lost at least 21.4 million jobs in March and April.

“While the decline in confidence appears to have stopped for the moment, the uneven path to recovery and potential second wave is likely to keep a cloud of uncertainty hanging over consumers’ heads,” said Lynn Franco, senior director of economic indicators at The Conference Board in Washington.

Stocks on Wall Street rallied, spurred by the reopening of the economy and optimism about a potential coronavirus vaccine. The dollar was trading lower against a basket of currencies. U.S. Treasury prices fell.

The Conference Board survey’s present situation measure, based on consumers’ assessment of current business and labor market conditions, fell to a reading of 71.1 this month from 73.0 in April. This measure has declined by nearly 100 points in the last couple of months, underscoring the impact of COVID-19.

But the expectations index based on consumers’ short-term outlook for income, business and labor market conditions climbed to 96.9 from a reading of 94.3 in April.

Despite the improvement in expectations, households remained worried about their finances. They also anticipated higher inflation, which could lead to a sense of diminished purchasing power and hurt much-needed consumer spending.

The Conference Board’s so-called labor market differential, derived from data on respondents’ views on whether jobs are plentiful or hard to get, improved to a reading of -10.4 in May from -15.7 in April. That measure closely correlates to the unemployment rate in the Labor Department’s employment report.

The percentage of consumers expecting an increase in income dropped to 14.0% this month from 17.2% April and the proportion anticipating a drop fell to 15.0% from 18.4%.

A separate report from the Commerce Department on Tuesday showed new home sales increased 0.6% to a seasonally adjusted annual rate of 623,000 units last month. Still, the gain left the bulk of March’s 13.7% plunge intact.

March’s sales pace was revised down to 619,000 units from the previously reported 627,000 units. Economists polled by Reuters had forecast new home sales, which account for about 10% of housing market sales, diving 21.9% to a pace of 480,000 units in April.

(Reporting by Lucia Mutikani, Editing by Franklin Paul and Andrea Ricci)

U.S. weekly jobless claims remain high as backlogs, layoffs linger

By Lucia Mutikani

WASHINGTON (Reuters) – Millions more Americans filed for unemployment benefits last week as backlogs continue to be cleared and disruptions from the novel coronavirus unleash a second wave of layoffs, pointing to another month of staggering job losses in May.

Initial claims for state unemployment benefits totaled a seasonally adjusted 2.438 million for the week ended May 16, the Labor Department said on Thursday. Data for the prior week was revised down to show 2.687 million claims filed instead of the previously reported 2.981 million. Connecticut said last week it had misreported its numbers.

Economists polled by Reuters had forecast claims would total 2.4 million in the latest week. The jobless claims report, the most timely data on the economy’s health, could offer early clues on how quickly businesses rehire workers as they reopen and on the success of the government’s Paycheck Protection Program (PPP).

A broad shutdown of the country in mid-March to contain the spread of COVID-19, the respiratory illness caused by the novel coronavirus, has resulted in the worst unemployment since the Great Depression.

“None of these states had systems set up to process the unprecedented amount of claims in one fell swoop, so there are backlogs,” said Steve Blitz, chief U.S. economist at TS Lombard in New York. “We continue to read of firms cutting their workforce and these are firms that were not immediately impacted by the mandated contraction from COVID-19.”

Claims have been gradually declining since hitting a record 6.867 million in the week ended March 28.

Economists said claims numbers were staying high also as states were now processing applications for gig workers and many others trying to access federal government benefits.

These workers generally do not qualify for regular unemployment insurance, but to get federal aid for coronavirus-related job and income losses they must first file for state benefits and be denied.

Last week’s claims data covered the week during which the government surveyed establishments for the non farm payrolls portion of May’s employment report. The economy lost a record 20.5 million jobs in April, on top of the 881,000 shed in March.

(Reporting by Lucia Mutikani; Editing by Chizu Nomiyama and Paul Simao)

What did eight weeks and $3 trillion buy the U.S. in the fight against coronavirus?

By Howard Schneider

WASHINGTON (Reuters) – Unemployment checks are flowing, $490 billion has been shipped to small businesses, and the U.S. Federal Reserve has put about $2.5 trillion and counting behind domestic and global markets.

Fears of overwhelmed hospitals and millions of U.S. deaths from the new coronavirus have diminished, if not disappeared.

Yet two months into the United States’ fight against the most severe pandemic to arise in the age of globalization, neither the health nor the economic war has been won. Many analysts fear the country has at best fought back worst-case outcomes.

For every community where case loads are declining, other hotspots arise and fester; for states like Wisconsin where bars are open and crowded, there are others such as Maryland that remain under strict limits.

There is no universal, uniform testing plan to reveal what is happening to public health in any of those communities.

Between 1,000 and 2,000 people a day continue to die from the COVID-19 disease in the United States, and between 20,000 and 25,000 are identified as infected.

If there is consensus on any point, it is that the struggle toward normal social and economic life will take much more time, effort and money than at first thought. The risks of a years-long economic Depression have risen; fact-driven officials have become increasingly sober in their outlook, and the coming weeks and coming set of choices have emerged as critical to the future.

Faced with two distinct paths – a cavalier acceptance of the mass deaths that would be needed for “herd immunity” or the truly strict lockdown needed to extinguish the virus – “we are not on either route,” Harvard University economist James Stock, among the first to model the health and economic tradeoffs the country faces, said last week.

That means no clear end in sight to the economic and health pain.

“I am really concerned we are just going to hang out. We will have reopened across the board, not in a smart way … and we will have months and months of 15% or 20% unemployment,” Stock said. “It is hard to state how damaging that will be.”

TAKING STOCK

Treasury Secretary Steven Mnuchin and Fed chair Jerome Powell will appear via a remote internet feed before the Senate Banking Committee on Tuesday to provide the first quarterly update on the implementation of the CARES Act, which along with a follow-up bill formed the signature $2.9 trillion legislative response to the pandemic. (See a graphic  of the full stimulus.)

They will likely face detailed questions about their efforts after a rocky few months. The Paycheck Protection Program, in particular, was originally overwhelmed with applicants and criticized for hundreds of loans doled out to publicly traded companies.

Yet, now two months in, a replenished program still has $120 billion in funding available – money on the table that analysts at TD Securities suggest people have refused to pick up because of confusion about the terms.

The hearing is also likely to be a platform for Democrats to coax Mnuchin and Powell toward acknowledging that more must be done – Powell said so directly in an appearance last week – and for Republicans arguing against quick new action.

DEATH PROJECTIONS DOWN, TESTING UP

The lockdowns and money have had an impact on the disease’s spread, as the postponement of sporting events and other mass gatherings, and restaurant and store closings curbed the spread of a virus that some early estimates saw killing as many as 2 million Americans.

Deaths as of Saturday stood at around 87,000 and are expected to pass 135,000 by early August. (Graphic )

After federal government missteps and delays, testing has ramped up to 1.5 to 2 million tests a day, still less than half what health experts say the country needs. (Graphic )

Strict lockdowns slowed the rate of infection in the hardest-hit areas, “flattening the curve” so hospitals could retrain nurses, cobble together donations of personal protective equipment such masks, gloves and gowns, and were spared from the direst predictions about intensive care shortages.

However, the fight against the coronavirus may still be in its initial stages in more than a dozen U.S. states, where case numbers continue to rise. (Graphic )

And community agencies are noting increases in cases of domestic violence and suicide attempts after weeks of home confinement.

TRILLIONS MORE SPENDING AHEAD?

At its passage in late March the CARES Act was regarded as a major and perhaps sufficient prop to get the U.S. economy through a dilemma.

Fighting the spread of the virus came with a massive economic hit as stores closed, transportation networks scaled back, and tens of millions of people lost jobs or revenue at their businesses. (See a graphic of the economic fallout.)

Facing a decline not seen since the Great Depression of the 1930s, the main goal of the bill was to replace that lost income with checks to individuals and loans to small businesses that are designed to be forgiven.

JPMorgan economist Michael Feroli estimated recently that the loans and transfer payments under the act turned what would have been an annualized blow to income of nearly 60% from April through June into an annualized decline of 15% – sharp, but far more manageable.

GDP in the second quarter, however, will drop 40% on an annualized basis. The budget deficit this fiscal year is expected to nearly quadruple to $3.7 trillion.

Some of the deadlines in the CARES Act are approaching. The small business loans were meant to cover eight weeks of payroll, a period that has already lapsed for companies that closed in mid-March when President Trump issued a national emergency declaration. The enhanced $600 per week unemployment benefit expires at the end of July.

The House on Friday passed a new $3 trillion CARES Act to replenish some funding, but it is unclear whether the Republican-led Senate will take it up.

Weeks after a V-shaped economic recovery was predicted in March, most economists and health officials have a darker message.

“It is quite possible this thing will stay at however many deaths it is a day indefinitely, just wobbling up and down a little bit as epidemics move to different places around the country,” said economist and Princeton University professor Angus Deaton.

“The sort of social distancing we are prepared to put up with is not going to do very much.”

(Reporting by Howard Schneider; Additional reporting by Susan Cornwell; Editing by Heather Timmons and Daniel Wallis)

U.S. companies discover the dark side of a COVID-19 business boom

By Timothy Aeppel

(Reuters) – Kevin Kelly has discovered the many ways a deadly pandemic can be both a boom and a burden on some U.S. businesses.

As the nation clamped down with stay-at-home orders, Kelly said his company, Emerald Packaging Inc. in Union City, Calif, saw demand for the factory’s output explode. Emerald churns out plastic bags for produce, like baby carrots and iceberg lettuce, and Kelly attributed the growth, in part, to the perception that packaged produce is a safer alternative to unwrapped items.

Emerald represents the other side of the current novel coronavirus crisis, which has seen unemployment surge to levels not seen since the Great Depression. The jobless rate hit 14.7% in April. While many companies face a slump, some are rushing to add workers, including delivery services like Instacart. A recent survey by the Atlanta Fed concluded there have been three jobs added to the U.S. economy for every 10 layoffs.

Eric Schnur, CEO of specialty chemical maker Lubrizol Corp., owned by Warren Buffett’s Berkshire Hathaway Corp, said he anticipates “many millions in extra costs associated with responding to COVID-19.” Lubrizol’s business boom includes a three-fold increase in its output of the gelling agent used to make hand sanitizer.

Schnur said the extra costs go beyond stepped up cleaning and safety equipment and includes “significant increases in supply chain and logistics costs as we work to get our materials to those who have the greatest need.”

Another company facing added costs is Calumet Electronics Corp., in Calumet, Mich., which said it has spent $80,000 on everything from soap to mobile desks to keep workers safe through the crisis. For more on Calumet, click here:

For Emerald, orders surged 150% in March and were up another 7% in April. But there’s a dark side to that surge, both in terms of cost and complexity.

All the steps the company has taken — both to boost output and keep workers safe — are expected to add at least $350,000 to costs by the end of the year. This doesn’t include the lost production time, which adds up to at least an hour each day, that machines have to be shut down for cleaning. Kelly, Emerald’s chief executive officer, said he hasn’t figured out what this will do to his profits, but he expects a big hit to his margins. Emerald is a family-owned business with annual sales of about $85 million.

One of the biggest costs for Emerald was $50,000 Kelly spent on an automated temperature scanner. When the crisis first hit, Emerald implemented a regimen that included workers getting their temperature taken at the start and end of each shift.

But Kelly soon realized there was a problem having 40 people at the start of each shift waiting to be checked, one by one, by someone standing close to each employee as they were screened.

“It also just isn’t comfortable,” he said. “You know it’s a temperature gun, but you basically are holding a gun up to someone else’s head. It just made everyone uncomfortable.”

The new system will be a scanner that flashes a red warning signal if someone walks by with a body temperature over 100.4 degrees.

COVID-RELATED COSTS

Another big-ticket item is the cleaning, which accounts for $75,000 of the added costs. This includes assigning six workers — two on each shift — to constantly scrub and sanitize surfaces and $10,000 for six backpacks that these workers now use to hose floors with cleanser. The company, which was founded in 1963 by Kelly’s father, has added 10 workers to its staff of 240 and is heaping on overtime as well to get the orders out the door.

Even the company’s rag bill exploded. They used to buy 2,000 rags a week. Now it’s 7,000. The cost of that one item has jumped from $300 a month to $1,000, while disposable glove use has tripled.

Michael Rincon, Emerald’s director of operations, says each week brings new twists. For instance, they’ve discovered that having workers constantly wiping surfaces with isopropyl alcohol erodes signs and buttons — but they only realized that after it was too late. On one machine in the factory, the word “danger” printed in bright red has blurred.

Rincon said the faded labels will be repainted. But he’s also had to replace buttons on machines that have had the lettering rubbed away. The cost of a new button isn’t much, but the repairs mean costly shutdowns on lines that run around the clock. Some buttons can be replaced in a few minutes, but others take longer, said Rincon.

Kelly said he even thought about trying to put through a price increase to offset some of these expenses. But a few weeks ago, his biggest customer let him know that was a non-starter. The customer told Kelly he was going to see who else might be able to supply him with produce bags, presumably at a better price.

Besides the costs, there are also plenty of unpredictable management challenges. The company made masks mandatory eight weeks ago, at the very beginning of the crisis, but Kelly and other managers still find workers in the plant who aren’t wearing them or are wearing them incorrectly.

One problem is the nature of their factory, which is dominated by large, noisy machines. The only way to communicate in many parts of the factory is to lean your head right next to your coworker. “I’m constantly walking through the factory — throwing my arms apart — to remind people,” said Kelly.

Emerald has had three false alarms, with workers either calling in sick or falling sick at work and being sent home. However, none tested positive for COVID-19, the illness caused by the novel coronavirus.

Kelly said that in a country that regulates so many things, there’s still no good government guidance beyond general guidelines.

“The toughest thing is that there isn’t much direction from the state or the federal government,” Pallavi Joyappa, Emerald’s chief operating officer, said. “You are kind of making it up as you go along.”

(Reporting by Timothy Aeppel; editing by Diane Craft)

U.S. jobless claims remain elevated amid second layoffs wave

By Lucia Mutikani

WASHINGTON (Reuters) – The novel coronavirus crisis continues to pummel the U.S. labor market, with the number of Americans filing for unemployment benefits falling less than expected last week, suggesting a second wave of layoffs in industries and jobs not initially impacted by business closures caused by the pandemic.

The Labor Department’s weekly jobless claims report on Thursday, the most timely data on the economy’s health, supports economists’ contention that it would take a while for activity to rebound after almost grounding to a halt in mid-March as authorities tried to slow the spread of COVID-19, the respiratory illness caused by the virus.

Federal Reserve Chair Jerome Powell warned of an “extended period” of weak growth and stagnant incomes. Though many parts of the country are reopening, businesses and factories are operating well below capacity. More states and local governments are laying out plans to restart their economies.

“The U.S. labor market remains under tremendous pressure, although the pace of job losses is at least slowing,” said Gus Faucher, chief economist at PNC Financial in Pittsburgh, Pennsylvania. “The key question is how quickly businesses will rehire workers in the weeks ahead as restrictions on movement are gradually lifted.”

Initial claims for state unemployment benefits totaled a seasonally adjusted 2.981 million for the week ended May 9, the Labor Department said on Thursday. While that was down from 3.176 million in the prior week and marked the sixth straight weekly drop, claims remain astoundingly high.

Economists polled by Reuters had forecast applications for unemployment benefits totaling 2.5 million in the latest week. Claims have been gradually decreasing since hitting a record 6.867 million in the week ended March 28.

U.S. stocks opened lower as investors grappled with the possibility of prolonged economic weakness due to the coronavirus pandemic. The dollar was little changed against a basket of currencies. U.S. Treasury prices rose.

MILLIONS UNEMPLOYED

The latest numbers lifted to 36.5 million the number of people who have filed claims for unemployment benefits since mid-March, or more than one in five workers losing their job.

Economists said weak demand is causing layoffs of workers in industries and jobs not initially affected by the coronavirus shutdowns. They also attributed the continued elevation in claims to the processing of application backlogs, which accumulated as state unemployment offices were overwhelmed by the unprecedented wave of applications.

The economy lost a staggering 20.5 million jobs in April, the steepest plunge in payrolls since the Great Depression of the 1930s. While there are no signs yet that the reopening of businesses will ease unemployment, there is cautious hope that April was probably the trough for job losses during this economic downturn, which has also been marked by the sharpest decline in output since the 2007-09 Great Recession.

Some businesses have accessed loans from an almost $3 trillion fiscal package, which could be partially forgiven if they used the credit for employee salaries. But many small enterprises are expected to close permanently, leaving some of the 21.4 million people who lost their jobs in March and April out of work for a long time.

Thursday’s claims report also showed the number of people receiving benefits after an initial week of aid increased 456,000 to a record 22.833 million for the week ending May 2. The so-called continuing claims data is reported with a one-week lag and will be closely watched in the coming months to get a better sense of the depth of the labor market downturn.

“Jobless claims pour cold water on the V-shaped recovery talk,” said Chris Rupkey, chief economist at MUFG in New York. “Economic growth might get a boost from pent-up demand, but the labor markets have dug themselves a deeper hole that will be harder to climb back out of.”

The Labor Department also reported that 3.4 million people had their applications for Pandemic Unemployment Assistance (PUA) processed in the week ending April 25. The PUA program covers gig workers and many others who do not qualify for regular insurance unemployment but have been forced out of work because of COVID-19.

(Reporting By Lucia Mutikani; Editing by Chizu Nomiyama and Andrea Ricci)

White House considers more coronavirus aid as jobs picture worsens

By David Morgan and Susan Heavey

WASHINGTON (Reuters) – The White House has begun informal talks with Republicans and Democrats in Congress about what to include in another round of coronavirus relief legislation, officials said on Sunday, while predicting further U.S. jobs losses in the coming months.

Officials in President Donald Trump’s administration, including Treasury Secretary Steven Mnuchin and White House economic adviser Larry Kudlow, said they were holding discussions with lawmakers on issues including potential aid to states whose finances have been devastated by the pandemic.

Another White House economic adviser, Kevin Hassett, said future legislation could include food aid to help Americans struggling with hunger amid widespread job losses that have ruined the finances of many people. It also could include broadband access for those who lack it, Hassett added.

While Democrats, who control the House of Representatives, are moving to unveil new legislation as early as this week, the White House signaled it is in no hurry to pass another relief bill.

“Let’s take the next few weeks,” Mnuchin told the “Fox News Sunday” program.

Since early March, Congress has passed bills allocating $3 trillion to combat the pandemic, including taxpayer money for individuals and companies to blunt an economic impact that includes an unemployment rate to 14.7% in April after U.S. job losses unseen since the Great Depression of the 1930s.

“We just want to make sure that before we jump back in and spend another few trillion of taxpayers’ money that we do it carefully,” Mnuchin said. “We’ve been very clear that we’re not going to do things just to bail out states that were poorly managed.”

Pressure for further action may mount as the near-term economic picture worsens.

On CBS’s “Face the Nation,” Hassett said the U.S. unemployment rate could rise to somewhere “north of 20 percent” in May or June before the economy moves into what administration officials have said will be a robust recovery in late 2020.

The April unemployment rate announced by the Labor Department undercounts some out-of-work Americans, economists say.

Asked if the country could now be facing a “real” unemployment rate of close to 25 percent, Mnuchin replied: “We could be.” Such a rate also includes people who have lost jobs and are not actively seeking employment and people considered underemployed.

IMMIGRATION ENFORCEMENT

Trump has previously threatened to withhold more coronavirus relief funds from states that limit cooperation with federal immigration enforcement – a stance critics said would exploit a public health crisis to advance political goals. Advisers said last week the White House would not consider new stimulus legislation in May.

Democrats are pushing for another massive relief bill that would include more money for state and local governments, coronavirus testing and the U.S. Postal Service.

“It’s not that we’re not talking. We are. It’s just informal at this stage,” Kudlow told ABC’s “This Week” program, referring to White House discussions with lawmakers.

“We’re collecting ideas for next steps, which will undoubtedly be data-driven,” Kudlow said.

Kudlow said he took part in a Friday conference call with House lawmakers from both parties, and plans to do the same on Monday with members of the Senate, which is controlled by Trump’s fellow Republicans.

“If we go to a phase-four deal, I think that President Trump has signaled that, while he doesn’t want to bail out the states, he’s willing to help cover some of the unexpected COVID expenses that might have come their way,” Hassett said on CNN’s “State of the Union.”

The White House is “absolutely” pushing for a payroll tax cut, Mnuchin said. Trump has called for a cut to the tax, which is paid by employers and workers and funds the social safety-net programs Social Security and Medicare. The proposal has garnered little congressional support.

White House predictions on the economy and how quickly a coronavirus vaccine could be rolled out were questioned on Sunday by both Democrats and Republicans.

The United States will need more tests before schools can reopen later in the year, said Republican Lamar Alexander, chairman of the Senate Health, Education, Labor and Pensions Committee.

Appearing on NBC’s “Meet the Press,” Alexander appeared to question the White House’s ability to meet a target of having 100 million vaccine doses by autumn and 300 million by the end of 2020. Alexander called it “an amazingly ambitious goal” and added, “I have no idea if we can reach that.”

No such vaccine for this pathogen has been approved though a number are under development.

Neal Kashkari, president and CEO of the Federal Reserve Bank of Minneapolis, told ABC’s “This Week” he would welcome a robust recovery.

“But that would require a breakthrough in vaccines, a breakthrough in widespread testing, a breakthrough in therapies, to give all of us confidence that it’s safe to go back,” Kashkari said. “I don’t know when we’re going to have that confidence.”

(Reporting by David Morgan, Susan Heavey and Heather Timmons; Writing by Heather Timmons; Editing by Lisa Shumaker, Daniel Wallis and Will Dunham)

Pandemic inflicts historic U.S. job losses, as states struggle to reopen

By Lucia Mutikani and Maria Caspani

WASHINGTON (Reuters) – The coronavirus pandemic triggered the steepest monthly loss of U.S. jobs since the Great Depression, government data showed on Friday, while Michigan and California prepared to put people back to work after a manufacturing shutdown.

Labor Department data for April showed a rise in U.S. unemployment to 14.7% – up from 3.5% in February – demonstrating the speed of the U.S. economic collapse after stay-at-home policies were imposed in much of the country to curb the pathogen’s spread.

Worse economic news may yet come. White House economic adviser Kevin Hassett said the unemployment rate is likely to move up to around 20% this month.

The economic devastation has put a sense of urgency into efforts by U.S. states to get their economies moving again, even though infection rates and deaths are still climbing in some parts of the country.

At least 40 of the 50 U.S. states are taking steps to lift restrictions that had affected all but essential businesses.

Two manufacturing powerhouses, Michigan and California, outlined plans on Thursday to allow their industrial companies to begin reopening over the next few days.

Public health experts said reopening prematurely risks fueling fresh outbreaks. They also have raised concerns that a state-by-state hodgepodge of differing policies confuses the public and undermines social distancing efforts.

“If we make a mistake and react too quickly, the situation is only going to get worse,” New York Governor Andrew Cuomo told a news conference. “We have people who are dying.”

The virus has killed nearly 76,000 Americans with more than 1.26 million confirmed cases, according to a Reuters tally.

An astounding 20.5 million U.S. jobs were lost in April – the steepest loss since the Great Depression some 90 years ago – and the jobless rate broke the post-World War Two record of 10.8% in November 1982, the government said.

Just as the pathogen itself has hit black and Hispanic Americans particularly hard – they are overrepresented in the U.S. death toll relative to their population size – minorities also have suffered greater job losses during the crisis.

The April unemployment rate was 14.2% for white Americans, but the rate reached 16.7% among African Americans and 18.9% among Hispanic Americans, the data showed.

Adding to the pain, millions of Americans who have lost their jobs have been unable to register for unemployment benefits. A survey released last week by the left-leaning Economic Policy Institute found that up to 13.9 million people have been shut out of the unemployment benefits system.

‘JUST SO TENSE’

Rita Trivedi, 63, of Hudson, Florida, was furloughed as an analyst at Nielsen Media Research on April 23 and has struggled to secure benefits from the state’s troubled unemployment system. Trivedi worries that she does not have enough money to cover her husband’s medical bills and other expenses.

“I’m more than anxious, I’m more than worried – it’s ‘can’t sleep’ kind of anxious,” Trivedi said in an interview. “I’m just so tense thinking about these things and how to manage.”

Tom Bossert, Trump’s former White House homeland security adviser, said the national trend of new cases outside New York – where the situation has stabilized – was of great concern.

“What we’re looking for now is red flags for reopening, and unfortunately we’re seeing those red flags – about a 2 to 4% daily increase in the rest of the country when you take New York out of the analysis,” Bossert told ABC News.

That increase, if not contained, could lead to “really devastating results in the next 72 days,” Bossert added.

Governor Gretchen Whitmer on Thursday gave the go-ahead to Michigan manufacturers to restart on Monday, removing a major obstacle to North American automakers seeking to bring thousands of idled employees back to work this month.

In California, her fellow Democratic Governor Gavin Newsom unveiled rules permitting manufacturers in his state – ranging from makers of computers, electronics and textiles to aerospace and chemical plants – to reopen as early as Friday.

President Donald Trump, seeking re-election in November, initially played down the threat posed by the coronavirus and has given inconsistent messages about how long the economic shutdown would last and the conditions under which states should reopen businesses.

“Those jobs will all be back, and they’ll be back very soon,” Trump told Fox News on Friday.

A member of Vice President Mike Pence’s staff has tested positive for the virus, briefly delaying Pence’s Friday flight to Iowa and prompting some fellow passengers on Air Force Two to disembark, according to a White House official.

Trump said certain White House staff members have started wearing masks, one day after the White House said his personal valet had tested positive.

As many as 75,000 Americans could die due to alcohol or drug misuse and suicide triggered by the pandemic, according to a report by the Well Being Trust, a national foundation working on mental health and wellbeing.

(Reporting by Lucia Mutikani, Jeff Mason, Mari Caspani, Andy Sullivan, Lisa Shumaker, Rajesh Kumar Singh and Susan Heavey; Writing by Will Dunham, Editing by Howard Goller)

‘The government is failing us’: Laid-off Americans struggle in coronavirus crisis

By Andy Sullivan and Brad Brooks

(Reuters) – For Claudia Alejandra, unemployment has become a full-time job.

Since losing her position at the makeup counter at the Macy’s department store in Orlando, Florida, on March 28, Alejandra spends her days trying to secure the unemployment benefits that should have arrived weeks ago, sometimes placing more than 100 calls a day.

The online application, a 10-hour ordeal of error messages, ended with a notice that her identity could not be verified. If she’s lucky, she’ll reach a representative who will say there’s nothing they can do to help. Otherwise, it’s a busy signal, or an hours-long wait on hold, followed by a sudden hang-up.

Alejandra, 37, cashed out her retirement fund — $800, a year’s worth of savings — to make the monthly payments on her 2010 Mazda, but doesn’t know how she’ll pay the rent for her studio apartment or her phone bill. Longer-term goals — a promotion, a family, a house of her own — seem even more elusive.

Alejandra’s experience is similar to that of more than two dozen Americans thrown out of work during the coronavirus pandemic who Reuters interviewed over the past week.

While U.S. government guidelines say jobless workers who qualify for assistance should get payments within three weeks of applying, many — like Alejandra — are waiting twice that long. Increasingly desperate, some are lining up at food banks or bargaining with landlords to postpone bills. Most fill their days seeking answers from overwhelmed state bureaucracies.

Alejandra has not heard anything from the state — though she has gotten a fundraising email from Republican Senator Rick Scott, who set up the current unemployment system during his tenure as governor.

“I feel like the government is failing us,” she said in a telephone interview.

Florida has overhauled and expanded the computer system and brought in 2,000 agents to field calls, and plans an investigation of the system’s failings, Governor Ron DeSantis said at a Monday news conference. People who applied in March and haven’t gotten payments yet likely have not provided all of the required information or might not be eligible, he said.

“You’ve started to see a really significant volume of payments going out, and it’s really taken a major overhaul behind the scenes,” he said. His office did not respond to an email with detailed questions on the situation.

In the past six weeks, states have struggled to process over 33 million jobless claims, more than they typically see in a year. That figure does not capture those who have been unable to even file a claim due to bureaucratic hurdles — up to 14 million more, according to an Economic Policy Institute study released last week.

The Reuters interviews across four states — Florida, Michigan, Arizona and Minnesota — revealed a wide disparity in whether or when people received payments depending on where they live. In Minnesota, where state employees field queries on social media platforms as well as by phone, six out of seven jobless people said they were getting benefits — sometimes more than they were earning before.

In Florida, where a buggy computer system has spurred widespread outrage, only three out of eight people said they were getting payments, while all six people interviewed in Arizona and all eight in Michigan said they had not yet received payment.

The interviews, to be sure, do not represent a scientific sample of Americans’ experiences with jobless benefit systems. But the people interviewed described similar situations in each state. Some who had begun to be paid benefits said they believed public servants were doing their best to respond to a fast-moving crisis, but even those described difficulties in getting the system to work.

All four states face high levels of jobless claims and will be important in the Nov. 3 presidential election. The governors of Florida and Arizona are Republicans, those of Michigan and Minnesota Democrats.

‘I JUST NEED WHAT I’M OWED’

Before the pandemic, Detroit restaurant server Deshan Hedrick used to worry about saving for a new home. Now she has a new problem: where to find food to last her through the next few days.

Hedrick, who lives in a small house with a roommate and had never been laid off in 25 years of waitressing, hasn’t received an unemployment payment since she lost her job on March 16.

“I don’t know who to blame. I just need what I’m owed,” she said.

By one measure, Michigan is a relative success story. As of April 25, the state had enrolled 21.1% of eligible working-age adults into unemployment programs, the third-highest rate in the country and above the national rate of 13.3%, U.S. Labor Department figures show.

That’s little comfort to Hedrick, 40, who says she wrestled for more than a month with a website for processing claims that repeatedly failed and couldn’t get through by phone. Her claim wasn’t accepted until April 18. Under federal guidelines, she should have received funds by early April.

Hedrick, who has no kids and grew up poor in Detroit, earned about $3,200 a month at Starter’s Bar and Grill. By mid-April, she exhausted her $1,700 in savings. Now she’s surviving on noodles and canned soup donated by friends and faces a $4,000 backlog of bills — from utilities and insurance to her monthly rent of $825.

Michigan’s Department of Labor and Economic Opportunity spokeswoman Erica Quealy acknowledged there have been delays but said that it has extended call center hours due to the surge in demand and delays, and has quadrupled the number of staffers helping customers.

Unemployment brought a different set of concerns for Phoenix resident Jamell Verse, who suffers from a chronic inflammatory disease called ankylosing spondylitis that causes severe pain in his joints, eyes and stomach.

His employer-based health insurance ended after he lost his job as an account executive on April 9. Now, Verse doesn’t know how he’ll pay for medication that costs $2,000 per month — or a visit to the hospital.

“When the disease flares up it’s quick and it’s violent and it’s with no notice,” he said.

Arizona Republican Governor Doug Ducey eased some restrictions in March, allowing recipients to get payments sooner and no longer requiring proof they are looking for work. But as of April 25, just 5.9% of eligible workers received those benefits, the fourth-lowest rate in the nation, according to a Reuters analysis of Labor Department data.

Verse, 41, says he applied for unemployment on April 10, the day after he lost his job but has yet to receive a payment — or a response of any sort. Like applications in most other states, Verse’s claim has been held up by anti-fraud measures designed to weed out those who don’t qualify. A letter asking him to confirm his application arrived on the day it was due, prompting a scramble to find a fax machine to get it back on time.

The state requires him to speak with a representative before he can get his payments, but the phone lines have been jammed. He says he calls 100 times a day, sometimes starting two hours before the phone lines open at 7 a.m. local time on weekdays in hopes of snagging a spot at the front of the virtual line.

Last week Verse went to the state’s unemployment agency office. Staffers told him to call the same number he has been trying for weeks. “All they were doing was telling people to call the phone numbers that are listed online,” Verse said. “That upset me even more, because their phone lines are all backed up.”

The Arizona Department of Economic Security, which administers unemployment benefits, said it has added 310 staffers since the pandemic began and was hiring 200 more. The state has also contracted with a private-sector call center to help keep up with high call volumes. Officials in Arizona and the three other states declined to discuss the specifics of the cases of the people Reuters interviewed.

PRIORITIES: MORTGAGE, FOOD AND DIAPERS

The picture appears brighter in Minnesota, which says a worker who files a claim can expect to receive their first payment that same week. The state provides a maximum weekly payment of $740, one of the highest figures in the United States. As of April 18, the state had registered of 13.8% its covered workforce, slightly better than the national average.

As elsewhere, Minnesota initially faced a deluge of applications. Residents interviewed by Reuters say they struggled to reach someone by phone, especially in the first half of April.

Car salesman Preston Jorgensen estimates he placed 200 calls a day using an automatic redialer for two weeks after his application was rejected on April 5, encountering busy signals each time. After weeks of sleuthing — contacting elected representatives, trading tips on social media, and calling other state offices — he thought he caught a break when he was transferred to a line that appeared to work. It rang and he got through. But after five hours on hold, he was disconnected.

Two weeks ago, a state employee called to tell him that his claim had been resolved.

Jorgensen, 36, says his monthly payment of $1,340 falls short of the $8,000 or so he used to earn each month, but covers his mortgage payments and food and diapers for his three young children. His wife, a stay-at-home mother, is expecting another child. The weeks spent trying to resolve his claim were frustrating, he says, but he expressed sympathy for overwhelmed state workers.

“It’s a new time for us as a country and they’re trying to do what they can,” he said.

The Minnesota Department of Employment and Economic Development said it was working to process the high volume of applicants and enroll eligible people as fast as possible.

In Florida, Governor DeSantis has faced an angry backlash as his state has failed to deliver for hundreds of thousands of jobless residents.

As of April 25, the state was providing benefits to just 4.1% of its covered workforce, the lowest in the nation. In response to a request for comment, state officials cited state figures showing that as of Tuesday 43% of the 1.1 million people who applied for unemployment benefits received payments.

“I’m willing to take anything at this point,” said Jessica Da Silva, 40, was laid off from her restaurant job in the coastal city of Port St. Lucie and was told she qualified for state and federal benefits that totaled about half the $1,200 or so she typically earned in a week. As she and her husband juggle bills and defer payments, she’s riding a bicycle to reduce stress.

“It does a number on you — it causes loss of sleep, it causes you to either overeat, or not eat at all,” said Da Silva.

(Reporting by Andy Sullivan in Washington and Brad Brooks in Austin, Texas; Editing by Scott Malone and Jason Szep)

States ask Trump administration to pay laid off oil workers to plug abandoned wells

By Nichola Groom

(Reuters) – A coalition of U.S. oil-producing states has asked the Trump administration for stimulus funds to hire laid-off energy workers to plug abandoned wells, a proposal aimed at fending off unemployment while tackling a growing environmental problem, a spokeswoman for the group said.

The request from the Interstate Oil and Gas Compact Commission, a consortium of 31 states, comes as the coronavirus pandemic triggers a historic downturn in crude oil prices and fuel consumption, forcing the once-booming U.S. drilling industry to slash production and cut its workforce.

IOGCC spokeswoman Amy Childers said the group had recently asked the Department of Energy for stimulus funds “to help keep oil and gas crews working during the current crisis.” Childers did not say if a specific amount of funds was requested.

DOE officials would not comment on the proposal.

There are about 3 million abandoned oil and gas wells in the United States, about two-thirds of which are unplugged, according to the U.S. Environmental Protection Agency. That number is likely to grow as the current market meltdown pushes hundreds of drilling companies toward bankruptcy, according to industry analysts, bankruptcy attorneys and state regulators.

Unplugged wells are typically abandoned by distressed operators and can pose serious environmental and safety risks if left to leach pollutants into the air and water. Most state governments lack sufficient funding to plug all the wells themselves, according to the IOGCC.

The push from U.S. states comes after Canada said last month that it would invest $1.2 billion to clean up abandoned wells in three provinces as part of a suite of measures to help the hard-hit oil and gas industry during the coronavirus outbreak.

U.S. states would like to see a similar commitment from the Trump administration, Oklahoma Secretary of Energy and Environment Kenneth Wagner said in an email.

“Oklahoma is certainly supportive of the idea around a stimulus similar to what has been done in Canada around plugging abandoned wells,” he said. Oklahoma has roughly 4,000 abandoned and unplugged wells, according to state records.

North Dakota’s top energy official, Lynn Helms, said at a public meeting last month that his state is seeking federal stimulus money to tackle its list of around 800 abandoned wells: “We’ll be asking for some of this money.”

(Reporting by Nichola Groom; editing by Richard Valdmanis and Marguerita Choy)