The COVID Crisis: No Quick Economic Recovery, More Trouble For The PPP Loan Program

The national The COVID Crisis tally from Harlem to Hollywood compiled by Johns Hopkins University.

(Previous numbers in parentheses.)

• Total U.S. confirmed cases: 1,812,742 (1,793,780)
• Total U.S. deaths: 105,262 (104,450)
• Total global cases: 6,309,107 (6,206,773)
• Total global deaths: 376,445 (372,752)

CBO: It’ll take 10 years for the economy to recover

The Congressional Budget Office (CBO) has put a projected price tag on the impact of the coronavirus (COVID-19), and it’s huge. Government accountants believe it will take the U.S. economy 10 years to fully recover, and economic activity will go down by nearly $8 trillion during that time.

In a response to a written inquiry by Sen. Chuck Schumer (D-N.Y.), the CBO said the pandemic will reduce nominal Gross Domestic Product (GDP) by 3 percent from January’s estimates. In the short run, the fallout could be even worse.

Last month, the CBO estimated that real GDP will contract by 11 percent in the second quarter of this year, which is equivalent to a decline of 38 percent at an annual rate. That means the number of people employed will be almost 26 million lower than the number in the fourth quarter of 2019.

Double-dipping

The popular Payroll Protection Program (PPP) under the CARES Act may have been a good idea on paper, but its execution has been riddled with glitches, from big loans going to big companies to small companies getting left out.

Now, Reuters reports that some companies that applied for loans received their money twice. The news agency cites nearly a dozen people with knowledge of the matter as saying a “technical glitch” caused a number of applicants to receive their requested loans more than once.

The sources say the “glitch” may have caused excess payments of hundreds of millions of dollars. Efforts are reportedly underway to identify the businesses that received multiple loans and recover the money.

Delta parks its older jets

The airline industry is still reeling from the plunge in passenger traffic during the pandemic and has canceled hundreds of daily flights. Delta has taken that opportunity to prioritize its fleet, sending older planes into retirement.

Specifically, the airline is discontinuing the use of MD-88 and MD-90 aircraft that it had used for short-hop and regional flights. The twin-engine jets were never popular with passengers since the narrow-bodied configuration made for a cramped cabin.

Residents of neighborhoods near airports didn’t like them much either since they tended to be much noisier than more modern jets.

Farmers slightly more optimistic

Small businesses and restaurants have borne the brunt of the coronavirus’ economic damage, but farmers have gotten more than their fair share of pain as well.

The Purdue University/CME Group Ag Economy Barometer shows farmer sentiment improved slightly in May after falling sharply in both March and April, but it’s still near record lows. The index was up 7 points from April to a reading of 103, but it remained nearly 40 percent below its all-time high of 168 set in February, just before the pandemic hit.

“This month’s survey was conducted the same week that USDA announced the details of the Coronavirus Food Assistance Program (CFAP) so awareness of that program’s details could be one of the key reasons for this month’s barometer improvement,” said James Mintert, the barometer’s principal investigator and director of Purdue University’s Center for Commercial Agriculture. “Yet some farmers remain worried about their bottom line and are still looking for options to alleviate those concerns.”

Employees decry the loss of the office’s social culture

The work-from-home movement brought on by the coronavirus has its advantages, including avoiding a stressful commute and being able to work, in some cases, in sweatpants. But a survey shows many employees miss the office’s social culture.

A new survey by Clutch, a business ratings and review firm, shows 63 percent of employees are spending less time socializing with their colleagues, both in-person and virtually.

“When working remotely, there’s not really the option to have a quick chat with your co-workers by the coffee machine,” said Sara Bandurian, human resources coordinator at Online Optimism, a design agency.

Around the nation

• Michigan: The state is beginning to open up after two months, entering phase 4 of its reopening plan. State officials have lifted the stay-at-home order and will reopen bars and restaurants next week. Starting Thursday, retailers can reopen.
• Maine: The state continues to lift restrictions on a county-by-county basis. Gov. Janet Mills’ latest move allowed some restaurants in the heart of Portland’s Old Port to reopen for outdoor dining this week. Restaurants in other areas were permitted to open for dine-in service on May 18.
• Tennessee: Gov. Bill Lee has suspended distribution of free face masks after a news report raised safety concerns about an antimicrobial agent used to treat the black, knitted cloth coverings.”We have paused further distribution of free masks to county health departments while further inquiry is pursued,” Gillum Ferguson, the governor’s spokesman, told the Chattanooga Times Free Press.