U.S. Jobless Claims Drop to 385,000, Another Pandemic Low

U.S. Jobless Claims Drop to 385,000, Another Pandemic Low

June 3, 2021

ABI Bankruptcy Brief

U.S. Jobless Claims Drop to 385,000, Another Pandemic Low

The number of Americans seeking unemployment benefits fell last week for a fifth straight week to a new pandemic low, the latest evidence that the U.S. job market is regaining its health as the economy further reopens, the Associated Press reported. The Labor Department reported today that jobless claims dropped to 385,000, down 20,000 from the week before. The number of weekly applications for unemployment aid, which generally reflects the pace of layoffs, has fallen steadily all year, though it remains high by historical standards. The decline in applications reflects a swift rebound in economic growth and the job market’s steady recovery from the coronavirus recession. More Americans are venturing out to shop, travel, dine out and congregate at entertainment venues. All that renewed spending has led companies to seek new workers. Employers have added 1.8 million jobs this year — an average of more than 450,000 a month — and the government’s May jobs report on Friday is expected to show that they added an additional 656,000 last month, according to a survey of economists by the data firm FactSet. The economy remains down 8.2 million jobs from its level in February 2020, just before the virus tore through the economy.​​​

Labor Shortage Draws Attention of U.S. Lawmakers

With millions of Americans still out of work and job openings at a record high, policymakers are dealing with an unexpected problem: How to coax people back into the labor force, the Wall Street Journal reported. Congressional lawmakers from both parties are considering incentives such as providing federal funding to pay for hiring bonuses for workers and expanded tax credits for employers. A handful of states are moving to implement such programs on their own, without waiting for action from Washington, D.C.. Some economists, Republican lawmakers and business owners say enhanced federal unemployment benefits are contributing to the labor shortage, because many workers receive more in government aid than they would get on the job. Those benefits — $300 a week on top of regular state payments — are due to expire after Labor Day. Other economists say the payments have provided a boost to many lower-income families, who have disproportionately lost jobs in the coronavirus pandemic, while in turn pushing money back into the broader economy. Surveys suggest other factors are also holding people back from returning to work, such as continuing fear of contracting COVID-19 or lack of child care. As the economy continues to improve and the pandemic wanes, however, it is possible the payments could become a bigger disincentive for those who are still unemployed to return to work, some economists have said. While some Republicans and business groups, including the U.S. Chamber of Commerce, have called for an immediate end to the extra payments, some policy analysts have said it may make sense to consider scaling back the payments gradually or creating incentives for hiring to help guide the labor market back to full health. (Subscription required.)​​​

Analysis: Stimulus Checks Significantly Helped with Basic Bills, Reduced Anxiety

Stimulus checks sent out by the government during the pandemic significantly helped Americans pay basic bills and reduced their anxiety, according to a new analysis of Census Bureau data, The Hill reported. “What we find is that reported hardship drops sharply — across multiple domains — immediately following both the COVID-19 relief bill passed in late December 2020 and [the American Rescue Plan Act] ARPA passed in early March 2021,” researchers from the University of Michigan wrote in the report. “This is particularly true for adults with children, and adults living in households with annual incomes less than $25,000, though we also see declines in hardship further up the income ladder too,” they added. Food insufficiency, financial instability, housing hardship and anxiety all fell after the passage of the December relief bill under former President Trump and a larger measure signed by President Biden in March, both of which included stimulus payments. The direct relief from the stimulus checks and unemployment benefits enacted by both Trump and Biden resulted in decreased food insufficiency between December and April, with declines of more than 40 percent. Financial instability decreased by 45 percent and mental health symptoms went down by 20 percent, according to the analysis.​​​

Commentary: The Covid Trauma Has Changed Economics — Maybe Forever

In 2020, when the pandemic hit and economies around the world went into lockdown, policymakers effectively short-circuited the business cycle without thinking twice. In the U.S. in particular, a blitz of public spending pulled the economy out of the deepest slump on record — faster than almost anyone expected — and put it on the verge of a boom. The result could be a tectonic transformation of economic theory and practice, according to a Bloomberg News commentary. The Great Recession that followed the crash of 2008 had already triggered a rethink. But the overall approach — the framework in place since President Ronald Reagan and Federal Reserve Chair Paul Volcker steered U.S. economic policy in the 1980s — emerged relatively intact. Roughly speaking, that approach placed a priority on curbing inflation and managing the pace of economic growth by adjusting the cost of private borrowing rather than by spending public money. The pandemic cast those conventions aside around the world. In the new economics, fiscal policy took over from monetary policy. Governments channeled cash directly to households and businesses and ran up record budget deficits. Central banks played a secondary and supportive role — buying up the ballooning government debt and other assets, keeping borrowing costs low, and insisting that this was no time to worry about inflation. Policymakers also started looking beyond aggregate metrics to data that show how income and jobs are distributed and who needs the most help. While the flight from orthodoxy was most pronounced in the world’s richest countries, versions of this shift played out in emerging markets, too. Even institutions like the International Monetary Fund, longtime enforcers of the old rules of fiscal prudence, preached the benefits of government stimulus.​​​

What Does the Future Hold for Retail? Gain Key Insights from Laura Davis Jones on the Latest Episode of ABI's "Industry Viewpoints"

Laura Davis Jones of Pachulski Stang Ziehl & Jones (Wilmington, Del.) talks with ABI Editor-at-Large Bill Rochelle to provide key insights on the latest episode of ABI's #IndustryViewpoints. Watch now!  

ABI's "Industry Viewpoints" is a video series released periodically on social media (Facebook, Twitter, LinkedIn and YouTube) featuring bankruptcy professionals providing their perspectives on the current state and future of an industry.

Previous guests include:

- Deborah Williamson of Dykema Gossett PLLC (San Antonio) discussing what is next for oil and gas

- Jim Shea of Shea Larsen PC (Las Vegas) providing an outlook on the hospitality and tourism sectors.

- Jim Tussing of Norton Rose Fulbright US LLP (New York) talking about the future of aircraft leasing.

Be sure to subscribe to the ABI YouTube channel or follow ABI on social media (twitter.abi.org, facebook.abi.org or linked.abi.org) to watch upcoming episodes, including the future of the supply chain!

Notice Regarding the UST Program’s New Chapter 11 Periodic Reports Effective June 21

On Dec. 21, 2020, the U.S. Trustee Program (USTP) promulgated a final rule,“Procedures for Completing Uniform Periodic Reports in Non-Small Business Cases Filed Under Chapter 11 of Title 11,” according to a press release. The Final Rule, which is authorized by 28 U.S.C. § 589b, requires that chapter 11 debtors in possession and trustees — other than small business debtors — file monthly operating reports (MORs) and post-confirmation reports (PCRs) using streamlined, data-embedded, uniform forms in every case in every judicial district where the USTP operates. The Final Rule will be in effect for all reports filed on or after June 21, 2021. Prior to the effective date, the USTP encourages bankruptcy professionals to engage with their local USTP offices to learn more about the Final Rule and forms so that they will be ready to file data-embedded MORs and PCRs beginning June 21, 2021. Local USTP offices will make training available for bankruptcy professionals about completing, filing and serving the new uniform MOR and PCR forms. The uniform forms and instructions for their use and filing, which may be periodically updated prior to the effective date, are available on the USTP’s website at https://www.justice.gov/ust/chapter-11-operating-reports.​​​

Applications for ABI’s 2021 40 Under 40 Class Due June 30
ABI’s “40 Under 40” program recognizes outstanding bankruptcy, insolvency and restructuring professionals from around the world who are 40 years old or younger as of Dec. 1, 2021. The application deadline for members of the 2021 Class is June 30. Honorees will be announced in October and recognized at a special awards ceremony during the 2021 Winter Leadership Conference in early December. In addition:

• Honorees will be invited to attend an exclusive reception with ABI leaders and judicial faculty at the Winter Leadership Conference, as well as future special events;
• Honorees will be profiled on ABI’s website and in the ABI Journal; and
• Each class of honorees will receive other special recognition when attending ABI events. Know a colleague who should be recognized, or would you like to nominate yourself? Click here.

Sign up Today to Receive Rochelle’s Daily Wire by E-mail!
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Tap into Rochelle’s Daily Wire via the ABI Newsroom and Twitter!


New on ABI’s Bankruptcy Blog Exchange: Why More Banks Are Weaning Themselves Off Overdraft Fees

For several decades, U.S. banks reaped huge revenues from fees charged to customers who spent money they didn’t have, while also enduring a consumer backlash that tarnished their reputations. Now the calculus is changing at a growing number of large and mid-sized banks, according to a recent blog post: These firms are reducing or eliminating their reliance on overdraft fees at a time when regulatory scrutiny seems likely to increase, and as competition from lower-cost alternatives is on the rise.

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

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