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Florida is paying only 14% of unemployment claims filed – CNN

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Florida is paying only 14% of unemployment claims filed – CNN_5e9f848f5bf5a.jpeg

The state reported Tuesday that only 14.2% of the more than 668,000 unique claims filed since March 15 were being paid — just under 95,000 people. That’s up from Monday, when the share was only 6.2%.

Florida has paid out a total of $125.6 million since March 15, including more than $79 million in $600 weekly checks that were mailed to residents as part of the Congress’ historic expansion of the unemployment program in its $2 trillion relief package last month. Florida’s maximum benefit is $275 a week.

The state’s Department of Economic Opportunity said it had conducted “necessary performance enhancements” over the weekend and expected to speed things up going forward.

“We believe we are going to see results this week,” an agency spokeswoman said in an email to CNN.

While many states have struggled to handle the crush of roughly 22 million Americans filing initial jobless claims amid the coronavirus pandemic, Florida has faced particular problems. A recent Associated Press analysis showed Florida ranked at or near the bottom of all states in its speed of processing claims.

Floridians filed a total of more than 1.6 million claims since mid-March, but many were duplicates or even triplicates. The state agency undertakes a four-step system to verify the applications but has processed only 170,380, or 25.5%, of the unique claims.

Just over a quarter of claims processed were found ineligible, though some people still may qualify for benefits under Congress’ expansion, which temporarily extends the unemployment program to independent contractors, the self-employed, gig workers and those affected by the coronavirus.

Difficulty submitting claims

Like their peers elsewhere, many Florida residents have been unable to file their initial claims because the state unemployment agency’s online system keeps crashing and the call center is overloaded.

Among the state’s solutions: paper applications.

Republican Gov. Ron DeSantis, who called the filing problems “totally unacceptable” earlier this month, directed the department to provide paper forms that residents could download and mail in. Or they could go to CareerSource locations, which can provide the application and assist Floridians in filing it. FedEx is also offering free printing and mailing of the forms at more than 100 storefronts across the state.

Don Walkley is one of those frustrated residents who found themselves having to print applications after being unable to file claims online or by phone, even though the state has added dozens of new servers and hundreds of staffers and has contracted with customer call centers. He donned a mask and dropped off his application at FedEx last week.
Don Walkley had to file for unemployment benefits in Florida with a paper application.

The Palm Beach Gardens resident was furloughed from his part-time job designing closets at The Container Store earlier this month. His wife, Micky, is about to start a three-week furlough from her position at an air conditioner manufacturing company.

Walkley, 70, hasn’t heard anything about his application and said there’s no way for him to follow up to see if it arrived.

“My question is ‘So now what?’ ” said Walkley, who has started to cut back on food shopping to avoid dipping into savings. “I assume it’s there. When does someone actually work on it, process it, do whatever they have to do so benefits can start being sent out? I’m not optimistic.”

Demands for improvements

Democratic state and federal lawmakers have pummeled DeSantis, demanding he improve the system.

Rep. Stephanie Murphy, a Democrat representing the northern Orlando suburbs, posted an online survey and has gotten thousands of responses from people who either can’t complete their applications online or by phone or can’t determine the status of their claims.

“The crime and the shame in this is that they built a system that wasn’t functioning in normal times,” Murphy said, “and now, in a crisis, are having to scramble to figure out how to compensate for the fact that there are all these workers who are out of work through no fault of their own and try to get them the benefits that they need.”

Rosa Flores and Sara Weisfeldt contributed to this story.

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Economy

The US will need to spend trillions more as economy takes until 2022 to fully recover: CNBC survey – CNBC

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The economy could take one to two years to rebound to full strength and the Federal Reserve and Congress, having already committed historic sums to fight the coronavirus pandemic, will have to commit trillions more, according to respondents to the CNBC Fed Survey.

With the Federal Reserve’s balance sheet already at an unprecedented $6.45 trillion, the 36 respondents see it rising on average to $9.8 trillion. The additional trillions will be added by the end of the current quarter, the respondents expect. Congress, having already committed about $2.5 trillion, is seen putting in an additional $2 trillion.

“My guess is that the virus itself will largely disappear within a year, but that the structural social and economic impacts will be with us much longer,” John Kattar, chief investment officer at Ardent Asset Management, wrote in response to the survey.

Jack Kleinhenz, chief economist for the National Retail Federation, said, “The policy response has been appropriate, but policy takes time to work its way into the economy and targeted sectors. … Many small businesses stand at risk.”

Despite the massive relief, respondents still see the unemployment rate rising to 19%, hitting that level in August. It’s expected to decline only gradually, to 11% by December and to 7% by the end of 2021. That would leave it at about double the rate before the crisis.

Second quarter of 2022

“With spiking unemployment and rising business closures … the prospects of a sharp rebound (is) far outweighed by the more realistic prospect of a longer-term structural disruption,” said Lindsey Piegza, chief economist at Stifel.

A 33% plurality believes the economy won’t be fully restored until the second quarter of 2022. But 19% believe it will be back by year-end and another 19% believe it can happen even earlier, highlighting a wide range of views about the speed and strength of a recovery.

“During the pandemic, production and consumption have been largely deferred and not lost,” wrote Rob Morgan, director of market strategy at US Energy Advisors. “This leads me to believe the economy will experience a V-shaped recovery beginning in the third quarter 2020.”

On average, respondents see gross domestic product falling by 24% this quarter, followed by a rebound of 4.7% in the third quarter and another strong quarter in the fourth. It won’t be enough to make back the losses in the first half. For the full year, GDP is forecast to decline by 5%.

Mark Zandi, chief economist at Moody’s Analytics, said a vaccine is essential for the economy to gain traction. “Until then, any recovery will remain something of a slog, characterized by halting growth and high single-digit unemployment. And even then, the economy won’t be in full swing and fully recovered until mid-decade.”

The Fed funds rate is seen remaining at zero for the rest of the year and rise to 1.9% in 2021. The Federal Reserve concludes its two-day policy meeting on Wednesday. Answers for CNBC’s Fed Survey from investors and economists were collected Thursday to Saturday. 

The S&P is forecast to finish lower on the year at 2,844 than Monday’s close, and rise to 3,141 next year for a 9% gain by the end of 2021.

 “I think the risk markets are anticipating a faster return to normalized economic conditions than we are likely to see,” says John Ryding, chief economic advisor at Brean Capital LLC.

Among the risks: Respondents place a 61% probability on a second round of contagion in the fall and winter.

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White House reportedly considering another round of stimulus checks – Atlanta Journal Constitution

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As the U.S. economy slowly reopens, Americans across the country are still grappling with job loss, furloughs and economic uncertainty. To combat the continued financial struggles some are facing, a White House official says the administration is “studying carefully” another $1,200 payment to citizens.

White House economic adviser Kevin Hassett told the media the administration is determining whether to provide those who qualify another round of stimulus checks, according to NBC News reporter Geoff Bennett. The additional financial support could be included in a phase 4 deal.

 

No word on when the package would be presented the House, but, with the virus still looming, House Majority Leader Steny Hoyer told the media Tuesday that the House will no longer come back next week after speaking to House physician, according to a tweet by Politico congressional reporter Sarah Ferris

 “We made a judgment that we will not come back next week,” Hoyer told reporters.

While the new stimulus checks are being considered, some Americans have not yet received the first round of checks. The IRS began cutting stimulus checks in mid-April. As of this week, about 90 million people have seen the economic bump in their accounts, according to economic news site Market Watch

 The hope is that the checks, which average about $1,200 a piece, will encourage spending and quell the financial pressure to pay essential bills as the COVID-19’s impact has shuttered manufacturing plants, retail stores and limited business hours for dozens of companies.

»MORE: The US is reopening but ‘normal’ is still a ways off

The IRS had distributed about 88.1 million stimulus checks as of April 17 and paid out $157.96 billion, according to statistics released April 24. That’s more than half of the $290 billion put aside for direct payments to individuals in the $2.2 trillion bill called the CARES Act.

Consumer confidence is still low

The Conference Board Tuesday reported that its consumer confidence index tumbled in the month of April, as millions lost their jobs and others feared for the current and future work conditions. 

The Conference Board said Tuesday that its confidence index plunged to a reading of 86.9, down from 118.8 in March. The index is composed of consumers’ assessment of present conditions and expectations about the future. 

 The present conditions index dropped from 166.7, to 76.4, a 90-point drop that was the largest on record. The expectations index, based on the future outlook, improved slightly from 86.8 in March to 93.8 in April.

The numbers in the present conditions index “reflects the sharp contraction in economic activity and surge in unemployment claims,” said Lynn Franco, senior director of economic indicators at the Conference Board.

Kathy Bostjancic, chief U.S. financial economist at Oxford Economics, said the confidence declines were worrisome because “consumers’ downbeat views about future income prospects can restrain consumer spending and the overall economy.”

Consumers drive about 70% of all economic activity in the U.S.

Many economists believe the country has already entered a recession that will be the largest economic disruption since the Great Depression of the 1930s.

The Associated Press contributed to this report.


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Economy

Goldman Sachs explains why stocks can keep rising even as a record-sized recession beckons – Business Insider

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  • Markets may continue to look past negative coronavirus news, especially if projections continue to show that the economy is expected to rebound after the pandemic, a Monday note from Goldman Sachs said.
  • An analysis of GDP forecasts from the bank found that investors tended to discount the next two years of macroeconomic performance.
  • Thus, metrics that focus only on growth over the next year “will overstate current valuations, given the large rebound expected beyond this year,” Zach Pandl, a cohead of global FX and EM strategy, wrote in the note.
  • Read more on Business Insider.

Markets may continue to look past negative coronavirus news, especially if projections continue to show that the economy is expected to rebound after the pandemic, according to Goldman Sachs.

An analysis by the bank using changes to gross-domestic-product forecasts found that investors typically discounted at least the next two years of macroeconomic performance, a Monday note said.

That means that metrics that focus only on growth over the next year — such as multiples based on 12-month earnings expectations — “will overstate current valuations, given the large rebound expected beyond this year,” Zach Pandl, a cohead of global foreign-exchange and emerging-markets strategy, wrote in the note.

While the coronavirus-induced recession is set to be the deepest contraction in modern history, it’s also likely to be the shortest, Pandl said. Many economists expect that, after a dip in 2020, GDP will rebound in 2021 and 2022. By early April, consensus GDP forecasts incorporated a virus hit, down 4% this year. But forecasts are for 4% growth in 2021 and 3% in 2022 — an unusual pattern, Pandl said.

Read more: Goldman Sachs recommends investors buy ‘quality at a reasonable price.’ Here’s are the firm’s top 10 stock picks that fit the bill.

That means that more disappointing data in the near term may not weigh heavily on markets, as activity is expected to snap back “relatively quickly,” Pandl wrote. “The depth of the downturn matters much less than the duration of the recovery,” he said.

Goldman’s analysis came amid a stock-market recovery from March 23 lows. As US states weigh relaxing strict lockdown measures designed to curb the spread of COVID-19, stocks have slowly gained on optimism that the economy will soon reopen. From March 23 to Monday’s close, the S&P 500 gained about 29%, but it was down about 15% from all-time highs in February.

Still, many economists disagree that any rebound after the coronavirus pandemic will be a quick one. Instead of the sharp V-shaped recovery that Goldman is suggesting, many expect a rebound to take a softer U shape.

Read more: The manager of the best small-cap fund of the past 20 years explains why he’s betting big on a consumer recovery — and shares his top 4 stock picks in the struggling sector

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