The Cyberthreat Looming over Virtual Currencies

The Cyberthreat Looming over Virtual Currencies

May 6, 2021

ABI Bankruptcy Brief

Total April Bankruptcy Filings Increase 6 Percent over Last Year, Commercial Chapter 11s Fall 49 Percent

Total U.S. bankruptcy filings in April 2021 increased 6 percent from the previous year, according to data provided by Epiq. Bankruptcy filings totaled 40,911 in April 2021, up from the April 2020 total of 38,459, when filings sharply declined in the early stages of the COVID-19 pandemic. The 38,833 consumer bankruptcy filings in April 2021 were a 7 percent increase from the April 2020 consumer total of 36,156. Total commercial filings decreased 10 percent in April 2021, as the 2,078 filings were down from the 2,303 commercial filings registered in April 2020. Total commercial chapter 11 filings experienced the largest decline, as the 287 filings dropped 49 percent in April 2021 from the 567 commercial chapter 11 filings in April 2020. “Massive stabilization efforts by the government, continued low interest rates and leniency by many lenders have helped lay the foundation for an economic recovery, but growing debt loads and financial uncertainty remain for many families and businesses amid the COVID-19 pandemic,” said ABI Executive Director Amy Quackenboss. “Bankruptcy provides a proven shield to struggling households and small businesses facing overwhelming financial distress.”​​​

U.S. Weekly Jobless Claims Drop Below 500,000; Layoffs Lowest Since 2000

The number of Americans filing new claims for unemployment benefits fell below 500,000 last week for the first since the COVID-19 pandemic started more than a year ago, signaling that the labor market recovery had entered a new phase amid a booming economy, Reuters reported. That was reinforced by other data on Thursday showing that U.S.-based employers in April announced the fewest job cuts in nearly 21 years. The reports added to other upbeat employment data by suggesting that the economy enjoyed another blockbuster month of job growth in April. But the labor market is not out of the woods yet, as about 16.2 million people are still collecting unemployment checks. Initial claims for state unemployment benefits tumbled 92,000 to a seasonally adjusted 498,000 for the week ended May 1, the Labor Department said. That was the lowest since mid-March 2020, when mandatory shutdowns of nonessential businesses were enforced to slow the first wave of COVID-19 infections.​​​

Millions Are Unemployed. Why Can’t Companies Find Workers?

In a red-hot economy coming out of a pandemic and lockdowns, with unemployment still far higher than it was pre-COVID, the country is in a striking predicament: Businesses can’t find enough people to hire, the Wall Street Journal reported. Rising vaccination rates, easing lockdowns and enormous amounts of federal stimulus aid are boosting consumer spending on goods and services. Yet employers in sectors like manufacturing, restaurants and construction are struggling to find workers. There are more job openings in the U.S. this spring than before the pandemic hit in March 2020, and fewer people in the labor force, according to the Labor Department and private recruiting sites. Surveys suggest why some can’t or won’t go back to work. Millions of adults say they aren’t working for fear of getting or spreading COVID-19. Businesses are reopening ahead of schools, leaving some parents without child care. Many people are receiving more in unemployment benefits than they would earn in the available jobs. Some who are out of work don’t have the skills needed for jobs that are available or are unwilling to switch to a new career. Still, hiring has been robust recently, despite the labor shortfall. U.S. employers added 916,000 jobs in March, according to the Labor Department, and economists project that the April jobs report, due out Friday, will show that employers added 1 million more. A Federal Reserve report in April described shortages across numerous occupations, including drivers and housekeepers. An April survey by job search site ZipRecruiter found that fewer jobseekers felt financial pressure to take the first job offer they received — 35% compared with 51% when the same question was asked in 2018. More than half the people surveyed said they preferred a job where they can work from home, and 45% said they would want that option after the pandemic abates. (Subscription required.)​​​

COVID-19 Savings Stockpile Could Accelerate Economy — if Consumers Spend It

Households in wealthy countries have amassed an unprecedented pile of savings to spend as parts of the global economy thaw after a year in suspended animation, the Wall Street Journal reported. But it isn’t clear whether consumers will seize that opportunity with enthusiasm. If they hold back, the recovery will be less rapid than it could be. Economists warn that predicting how much households will spend is fraught with difficulty, given that there are few precedents for such a large buildup of savings over such a short period. “There’s lots of uncertainty about how that’s going to unwind and how it will support the recovery,” said Alfred Kammer, head of the International Monetary Fund’s European department. One key to solving that puzzle is identifying who has accumulated the largest pot. Household spending patterns vary widely depending on income and age. Older and richer people tend to spend less and save more as a percentage of income, and the reverse is true for younger and poorer people. If that pattern holds this year, a large chunk of the pandemic savings pool won’t be spent quickly. Even so, the amount spent is expected to be large enough to spur a strong recovery, economists figure. (Subscription required.)​​​

“Rewind” Any Annual Spring Meeting Sessions Through May 31

ABI’s Annual Spring Meeting has now concluded, but if you missed any of the hard-hitting sessions, replays are available through the innovative virtual platform. If you have registered for ASM, you can access the replays through May 31! Not registered? You can still sign up; click here.​​​

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New on ABI’s Bankruptcy Blog Exchange: The Cyberthreat Looming over Virtual Currencies

Virtual currencies are not only here to stay but are becoming an ever-increasing part of the U.S. financial system. But as digital currencies expand, so too does the risk that they will be targeted by hostile nations and cybercriminals, according to a recent blog exchange.

To read more on this blog and all others on the ABI Blog Exchange, please click here.

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