PayPal, fintech companies supply coronavirus relief check cash out options

How to spend coronavirus stimulus check if you’re struggling financially

Financial expert Chris Hogan says as Americans begin to receive their coronavirus relief checks, we should be in ‘conserve mode’ and avoid ‘any unnecessary spending.’

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Financial tech companies say they are helping Americans outside the traditional banking system get their coronavirus-related stimulus money via direct deposit.

E-commerce payment giant PayPal is one of several companies, including Cash App, Simple and Chime, that is notifying customers that it offers routing and account numbers, which are needed to accept stimulus checks by direct deposit, according to a recent company press release.

HOW TO GET YOUR CORONAVIRUS STIMULUS CHECK

“For the 25% of Americans outside of the financial system (FDIC Survey) digital payment [systems] like PayPal provide the ability to participate in the digital economy, while also avoiding costly fees,” Tom Hunter, a global consumer communications representative at PayPal told FOX Business. “In the current environment, we know that fast, easy, safe and secure access to stimulus payments is of high importance to people. By electing to receive the payment through PayPal, recipients can avoid going to a physical check-cashing location, or even missing a paper check if they are sheltering in place at a different address to their registered address.”

He added that customers who use PayPal to receive their deposit can spend their stimulus funds wherever PayPal is accepted immediately, withdraw to a bank account or hold the balance for future use.

The IRS is rolling out a “Get My Payment” tool Friday, allowing individuals who are eligible for the $1,200 stimulus to enter their banking information and check the status of their payment.

(REUTERS/Robert Galbraith)

Customers who have a PayPal Cash Plus account and PayPal Cash Card will be able to receive their Economic Impact Payment through direct deposit after they set up payment directions through the IRS portal. Anyone who does not have an account or debit card through PayPal can sign up and request a card online.

CORONAVIRUS STIMULUS CHECKS WON'T BE ENOUGH, SAYS ONE-THIRD OF AMERICANS

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PYPL PAYPAL HOLDINGS INC. 109.78 +3.81 +3.59%

Account and routing numbers associated with a PayPal profile can be found under the settings section of a PayPal account.

Signing up for PayPal Cash Plus, PayPal Cash Card and PayPal Direct Deposit is free.

PAYPAL CO-FOUNDER: CORONAVIRUS INCREASES LOAN DEMAND

Customers who have used PayPal Direct Deposit for transferring 2018 or 2019 federal income tax returns to their PayPal Cash Plus account should receive their payment automatically, according to the company’s statement, which aligns with the guidelines published by the IRS.

Stimulus payments are said to be transferred to these accounts in the same way.

If you have used another alternative fintech banking service to receive your tax returns in the last two years via direct deposit such as the Cash App, Venmo (a PayPal subsidiary), Aspiration, Moven, Varo and any other platforms that provide an account and routing number for checkings and/or savings, your stimulus check will be deposited there.

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PayPal added that it is working with the U.S. Department of the Treasury to “offer more ways to get your stimulus payment into your PayPal account.”

People who do not provide banking information such as an account number and routing number will not be able to receive a digital direct deposit and will have to wait for a physical paper check to be mailed out to them, which may take up until August to process, according to the Associated Press.

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Americans who are on veterans disability compensation, a pension, or survivor benefits from the Department of Veterans Affairs, or are at an income level that does not require a filed tax return can receive an Economic Impact Payment as well after they submit their banking information to the IRS via FreeFileFillableForms.com as noted in the agency’s non-filer guidelines.

If stimulus check eligibility is a concern, TurboTax has created a calculator that can help determine payment amounts by income bracket, filing status and other key details in addition to its dedicated portal that provides coronavirus stimulus updates.

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Coronavirus recovery: Former Google CEO Eric Schmidt weighs in on rebuilding economy

Trump to talk with companies, associations, unions soon about economic recovery

President Trump discusses the various businesses, professional sports leagues, religious leaders and government officials he will speak to in order to gain insight on where everyone stands at the moment and plans for the future.

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Former Google CEO Eric Schmidt shared his ideas on the best strategy to reopen the economy amid the coronavirus pandemic and how large companies can do their part in helping speed up the economic recovery as more than 17 million Americans have filed for unemployment. His remarks came during an interview with economist Marie Josee Kravis for the Economic Club of New York on Tuesday.

Eric Schmidt (Alex Wong/Getty Images)

While many experts and economists worry of a potential "unemployment hangover" lasting even after the economy is reopened, Schmidt believes it can be avoided through job retraining and reskilling.

"One way to think about it is that there are jobs being created by virtue of the digital platforms, as well as there are jobs being lost because of the loss of faith in the analog system because your retail stores and so forth are shut down," Schmidt said. "So the society just needs to change more quickly to this new paradigm."

In order to do that, Schmidt believes that larger companies like Amazon, Walmart, Costco and Target, who have all seen "very significant growth" while other retail companies and brands have been hurt, need to lead the way by hiring individuals displaced by the virus.

"It appears as though the distribution infrastructure, the networks, the winners are winning the majority of the share and the lesser parts of the infrastructure are suffering as a result," Schmidt said. "As you get a more networked society, you tend to produce network winners, which become the distribution platforms, the branding platforms and so forth, and they need to be the ones hiring."

Ticker Security Last Change Change %
AMZN AMAZON.COM INC. 2,283.32 +114.45 +5.28%
WMT WALMART INC. 129.00 +3.70 +2.95%
COST COSTCO WHOLESALE CORPORATION 314.14 +14.52 +4.85%
TGT TARGET CORP. 108.38 +3.70 +3.53%

CORONAVIRUS PANDEMIC COULD PUSH GLOBAL ECONOMY INTO WORST RECESSION SINCE GREAT DEPRESSION, IMF SAYS

In terms of actually reopening the country and restarting the economy, Schmidt said that both the health problem and economic problem need to be solved at the same time, but that we have very few tools at our disposal to actually do that.

"We don't have mathematical models that understand the network paths that people follow," Schmidt said. "We didn't take the time in the last month or two to collectively figure out what the contact points of everyone are. That's a lost opportunity."

He added that the most likely scenario to reopen would be a "series of unlocks" with social distancing in stores and restaurants that will last for much longer than most people think.

"This will change our society for much longer than we think," Schmidt warned. "It's not going to be a quick recovery back to the hugging and kissing in restaurants and all the kind of behaviors that were perfectly fine before the pandemic. People will remember, and until there's a broadly available vaccine and herd immunity, it will be dangerous to engage in some of those activities, especially if you're older."

THE CORONAVIRUS ECONOMIC RECOVERY REOPENING WILL BE FRAGILE, PARTIAL, AND SLOW

He expects that each state will have a different process and timeline for reopening but is worried that states don't have the tools to make the decision to reopen accurately. Instead it would require collective action to get the technology and models funded and built.

But rather than involving big tech companies, Schmidt believes there are plenty of people within each state who are just as capable.

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GOOGL ALPHABET INC. 1,265.23 +54.82 +4.53%
AAPL APPLE INC. 287.05 +13.80 +5.05%

"If I were the governor of a state, I would go to the university and all the people that I know and I'd say I want the 50 smartest technical people in my state," Schmidt said. "Every one of them has a smart university full of smart, smart folks there, and I want you guys to build me a model of how I can reopen my economy with the least risk to health."

Schmidt said the model would be used to assess the "incremental danger" of the coronavirus, providing governors with exact information on how many people would be infected if they opened up schools, for example.

FED OFFICIALS SEE RISKS IN REOPENING ECONOMY TOO SOON, BUT ACKNOWLEDGE NEED TO MOVE 

He believes the hardest decision to make will be when to open schools, primarily due to the difficulty for public schools to practice social distancing and because we "don't fully understand the transmission path with kids and their parents and especially their grandparents".

Despite a model like that being nonexistent, Schmidt said it's a decision that only the states will have to make, even with a lack of information.

"If I were the decision-maker, I would say I'm flying blind," Schmidt said. "How could you possibly expect me to make the right decision? Probably the most important decision that I'll make in my political career from the standpoint of serving our nation, and I don't have that information. That's a problem that I think can be solved at a state level."

FAUCI: AMERICA STILL MISSING TESTING, DATA NEEDED TO REOPEN ECONOMY

In terms of testing, Schmidt said that while we don't have to test everyone, uniform testing across all states is the only way to get an accurate picture of how every person is being impacted by the virus.

"We don't know how many asymptomatic carriers there were, we don't know how many people got sick and got better and we're never in the testing pools, we don't know how to count them," Schmidt said. "We don't know the transmission rate within families, although we have estimates broadly. So we're going to have to make some assumptions."

While many people are concerned about opening before an official vaccine is on the way or PPE has reached a sufficient amount, Schmidt warned that in another month or two, a prolonged shutdown will lead to a "very significant bankruptcy cycle in many industries" and that once that cycle starts, it will become very hard to restart the economy.

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While Schmidt acknowledged America has been behind on dealing with the coronavirus, he believes that America can lead in the effort to find the vaccine if we give more money to scientific research.

"We are late to this party, but if we got our act together with respect to research in these areas and these mechanisms for social distancing that I'm describing, we could ultimately become the leader because all the other countries have the same problems with respect to a resurgence of the virus and so forth," Schmidt said. "Those ideas could become adopted by our democratic partners and friends who are struggling."

President Donald Trump speaks about the coronavirus in the Rose Garden of the White House, Tuesday, April 14, 2020, in Washington. (AP Photo/Alex Brandon)

Schmidt's comments came the same day that President Trump announced that some portions of the country could reopen sooner than the end of the month.

Trump said he will be reaching out to various companies in the coming days to gain insight on their individual situations and find out if they are ready to reopen the economy.

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Why you should never borrow from your 401(k) to pay off debt

If you need to pay off your debt, options other than tapping into your 401(k) may be better in the long-run. (iStock)

The average 401(k) account has a balance of just over $103,000, according to data from Fidelity. While this type of fund is a form of retirement savings, some plans let you tap into it sooner with a 401(k) loan. While loan structures vary, many allow you to borrow up to half of your vested funds to be paid back within five years.

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You could use this money to pay down debt, but is it a good idea?

“I don't suggest that my clients consider borrowing from their 401(k),” said Danielle Harrison, assistant vice president of wealth management at Simmons Bank in Columbia, Mo. “Many individuals feel as if they are just paying themselves interest on their money, so it is the best loan out there, but I look at it very differently.”

The disadvantages of using your 401(k) for debt

Your 401(k) is intended to fund your retirement. “With most companies no longer offering a pension, employees are responsible for their own retirement savings and the majority aren’t saving enough to maintain their current lifestyle in retirement,” Harrison said.

8 COSTLY RETIREMENT PLANNING MISTAKES YOU NEED TO AVOID

When you withdraw from your account, you lose out on the earnings you could have received, and your balance may not reach the level you should have in your 401(k). In addition, you are paying the loan back with after-tax money, essentially paying double taxes, said Harrison.

More bad news: If you don’t pay the loan back on time, the outstanding amount will be considered a withdrawal and you will have to pay income tax on the amount along with the potential of a 10 percent penalty. And borrowing from a 401(k) could put you in a difficult situation.

“If you are fired, say due to a merger, or you leave, the plan terminates,” said Harrison. “You will have a limited amount of time to pay the entire balance off or you will be faced with ordinary income tax and potential penalties. This also may cause individuals to have to stick out a job that they are miserable at because if not they will be forced to pay back the funds.”

There are a few advantages to leaning on your 401(k)

While most financial planners advise against this type of method of paying off debt, it does have some advantages. First, no loan application or minimum credit score is necessary, which can be good if your credit history isn’t perfect. In addition, interest rates can be lower than other types of debt consolidation loans, and it goes to you instead of a bank or credit union.

SHOULD YOU LOWER 401(K) CONTRIBUTIONS TO PAY OFF DEBT

“I worked for many years administering 401(k) plans and saw many cases where borrowing from 401(k)s ended up terribly for the client,” said certified financial planner Mark Wilson of MILE Wealth Management in Irvine, Calif. "My opinion at that time was that 401(k) loans were toxic. Then I needed some additional funds to help with the purchase of our first home, and a loan from my 401(k) came to the rescue. For those that are disciplined, a loan from a 401(k) plan used to pay off high-interest debt can work out great.”

Alternative ways to pay off debt

Certified financial planner Kristi C. Sullivan of Denver, Colo.-based Sullivan Financial Planning, however, urged clients to find alternative options: “Your grandfather wasn't allowed to borrow from his pension to cover up his overspending,” she said. “No one is allowed to take money from their future Social Security payments to buy a house. Find a way to spend less, create better money habits going forward, and remember, your someday-elderly self is relying on you to save money for his future.”

HOW TO FIND THE BEST PERSONAL LOAN FOR YOUR NEEDS

If your debt is due to credit cards, Sullivan said old-fashioned budgeting and cutting back is the answer. “Drive a less expensive car,” she said. “Examine your rent or house payment and make some hard decisions.”

You can also get a side hustle to pay down debt, Sullivan added. “Unemployment is at an all-time low and gig opportunities abound,” she said. “Even six months of extra work can make a huge dent in debt.”

If you do decide you to go with financing and own property, a home equity loan may be a good option. Or if your credit is strong, some lenders offer personal loans for debt consolidation. These options may be better than a 401(k) loan because they don’t impact your retirement goals. Whatever you choose, though, make sure to focus on your behaviors.

“If the [401(k)] loan simply gives access to rack up more debt, this is a terrible idea,” said Wilson. “Tread lightly when using 401(k) loans.”

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Coronavirus small business relief program running out of cash as Congress feuds over more funding

Trump touts success of SBA loan program

President Trump says small business owners should receive SBA loans by the end of the week.

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A popular small business relief program is in danger of running out of funds by the end of the week, as billions of dollars in additional coronavirus aid remain stuck in congressional limbo.

At the heart of the impasse between Republicans and Democrats is $250 billion to replenish quickly vanishing funds for the Paycheck Protection Program, a $349 billion fund approved last month as part of the CARES Act.

The program provides loans at ultra-low interest rates to businesses with fewer than 500 employees to incentivize them to keep staff on payroll, or rehire workers who have already been laid off. If at least 75 percent of the money goes to keep employees on the payroll, the federal government will forgive the loans.

Already, the Small Business Administration has approved close to 1 million loans worth nearly $225 billion, according to a senior SBA official. If the current trend in demand for loans continues — one week ago, about $50 billion in loans had been processed; that jumped to $160 billion by Friday — the program could be close to running out of money by Friday.

ABOUT 70 PERCENT OF SMALL BUSINESSES HAVE APPLIED FOR CORONAVIRUS RELIEF, BUT NOT ALL HAVE BEEN SUCCESSFUL

Although there’s bipartisan agreement that the PPP needs additional funding, Senate Democrats last week blocked the measure from being passed, pushing for more emergency funding for hospitals and states as well as some changes to the small business aid program.

The stimulus bill passed at the end of March was $2.2 trillion, the largest in recent memory.

Republican aides said conservatives will reject any spending beyond the PPP, while House Speaker Nancy Pelosi has maintained that a small-business-only bill would be rejected in her chamber.

WHAT APPLICANTS NEED TO KNOW ABOUT THE SMALL BUSINESS LOAN PROGRAM

"We have real problems facing this country, and it’s time for the Republicans to quit the political posturing by proposing bills they know will not pass either chamber and get serious and work with us towards a solution," Pelosi and Senate Minority Leader Chuck Schumer said in a joint statement Monday.

Lawmakers from both houses are working from their home states as a result of the outbreak and are unlikely to return to Washington, D.C. until at least early May. (House leaders announced Monday that lawmakers won’t return until at least May 4, and the Senate is expected to make a similar announcement on Tuesday, per Politico).

Time is imperative for owners. Nearly one in four small businesses has shut down temporarily in response to the crisis, while another 40 percent expect to do so within two weeks, according to a survey published by the MetLife & U.S. Chamber of Commerce Small Business Index.

If owners don’t receive further support, about 43 percent have warned they have less than six months to a permanent shutdown. One in 10 say they have less than a month until a permanent shutdown is inevitable, the survey found.

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The problem with mortgages during coronavirus

Let’s say you own a house and have a mortgage. And you’ve been laid off, furloughed, had your pay cut or your hours reduced at work because of the coronavirus panic.

You are in a jam.

So you are hoping for what is called “forbearance” on the mortgage payments, which in simple terms means your bank will back off for a few months until you can get your family’s finances in the upright position.

But there is a problem with forbearance. I’ll let a reader of mine explain it:

John: I am semi-retired and live on a relatively fixed income. Like millions of others, I have been furloughed from my job due to the coronavirus pandemic, but still have bills to pay — most importantly, my mortgage payment to Chase bank.

Our governor has asked banks doing business in Connecticut to offer forgiveness on mortgage payments for 90 days to those of us who are in this precarious situation. So I tried to contact Chase bank re: same.

It’s not possible to talk to a live person, but I did get a recording stating that a 90-day “forbearance” policy is in place. But the three months forbearance amount is due in full after the 90-day period.

If I’m struggling now, how in the world am I going to afford a lump sum payment of almost $6,000 in three months? M.D.

There is a simple solution to this problem, but not everyone can use it. I’ll explain. Something has to be done about this, and I’m trying to do just that.

Rather than giving homeowners an extra 90 days to pay — which, like M.D. says, they won’t be able to handle — banks and other mortgage companies should simply add three months, or six months, or a year to the end of the present mortgage.

This way M.D. and all the other millions of stressed mortgage holders can restart their payments once the economy is out of its coma and jobs are again available. Banks lose a little income right now, but they make it up on the back end of the mortgage.

Simple!

But it’s not. And here’s why.

Not all mortgages are owned by the places where the payments are going. Chase, for instance, might only be servicing M.D.’s mortgage. The loan itself could have been sold to another investor, or packaged into what is called a mortgage-backed security.

When the loan is sold, it’s up to the new owner to decide if he’ll allow the mortgage to be extended, or whether the homeowner is merely given 90 days of forbearance — or no forbearance at all.

And if the mortgage is on a house that’s worth a lot more than the outstanding loan balance, then the mortgage holder may just decide to foreclose on the property.

It sucks. And it’s not very nice. But that’s the way loans work.

So, the solution is for the Trump administration and Congress (and whoever else needs to get involved) to make forbearance and, especially, mortgage loan extensions mandatory.

Mortgage investors — banks, investment firms, Fannie Mae — need to be required to place payments that must be missed now because of coronavirus hardship on the back end of the loans. Fannie Mae, especially, must be required to do that, since it is by far the largest buyer of mortgages in the US.

A source at a major bank told me it wouldn’t be out of the question to extend loans that it still owns. But there is a problem when a bank doesn’t own the debt anymore and is just servicing it for an investor.

By the way, last week I explained this problem to someone with close connections to the Trump administration. So hopefully this is already being worked on.

As for M.D., Chase got back to him after I spoke with the bank. He was told the options that would be considered are “extending your payment assistance period, adding the missed principal and interest to the end of the loan, a repayment plan or a modification.”

So if putting the mortgage payments you can’t make on the end of your loan seems good to you, ask your bank. Maybe the bank will say yes.

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World’s largest pork processor shuts down plant, warns of meat shortages during pandemic

CHICAGO, April 12 — Smithfield Foods, the world’s biggest pork processor, said on Sunday it will shut a U.S. plant indefinitely due to a rash of coronavirus cases among employees and warned the country was moving “perilously close to the edge” in supplies for grocers.

Slaughterhouse shutdowns are disrupting the U.S. food supply chain, crimping availability of meat at retail stores and leaving farmers without outlets for their livestock.

Smithfield extended the closure of its Sioux Falls, South Dakota, plant after initially saying it would idle temporarily for cleaning. The facility is one of the nation’s largest pork processing facilities, representing 4% to 5% of U.S. pork production, according to the company.

South Dakota Governor Kristi Noem said on Saturday that 238 Smithfield employees had active cases of the new coronavirus, accounting for 55% of the state’s total. Noem and the mayor of Sioux Falls had recommended the company shut the plant, which has about 3,700 workers, for at least two weeks.

“It is impossible to keep our grocery stores stocked if our plants are not running,” Smithfield Chief Executive Ken Sullivan said in a statement on Sunday. “These facility closures will also have severe, perhaps disastrous, repercussions for many in the supply chain, first and foremost our nation’s livestock farmers.”

Smithfield said it will resume operations in Sioux Falls after further direction from local, state and federal officials. The company will pay employees for the next two weeks, according to the statement.

The company has been running its plants to supply U.S. consumers during the outbreak, Sullivan said.

“We have a stark choice as a nation: we are either going to produce food or not, even in the face of COVID-19,” he said.

Other major U.S. meat and poultry processors, including Tyson Foods Inc, Cargill Inc and JBS USA have already idled plants in other states.

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Wells Fargo mortgage offices in India may be black eye for bank during coronavirus lockdown

Wells Fargo’s sprawling back offices in India, struggling to process residential mortgage deals amid a coronavirus lockdown, may be the next black eye for America’s beleaguered third-largest bank, mortgage lenders familiar with the matter told The Post.

At stake, they claim, is a frozen pipeline of funding, potentially as much as billions of dollars destined for a network of small independent US lenders.

“Wells’ back office in India is essentially shuttered, so it can’t check off the boxes and process documents from the US it would normally handle,” said one lender, a Wells client. “As a result, Wells is not clearing the loans for funding to US clients in its mortgage purchase transactions with the US lenders who originated the mortgages.”

With businesses closed and more than a billion people across India — including tech and operations staff for US companies’ back offices — ordered to stay home because of the coronavirus pandemic, the ripple effects are battering Wells, observers say.

In the current lockdown, there’s clearly heightened operational risk for US banks and companies with back offices in India, said Odeon Capital bank analyst Dick Bove.

Wells may be among the hardest hit, say lenders in the US familiar with the matter. Among other projects, the bank’s India outpost processes residential mortgage purchase agreements from Wells’ large network of US correspondent banks, known as primary lenders, several of these bankers say. Wells funds the sales of mortgages by these lenders to their customers soon after the ink is dry on the deals.

“Most of the work typically done out of India is continuing to be done from India, and we have not seen an impact to overall productivity,” Wells said in a statement.

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How we should reopen the US when coronavirus slows down

It’s time to plan for a grand reopening of the American economy, and we need to execute it in a safe, methodical and robust way.

The country must come back strong in honor of the many lives lost to this horrendous virus and the many who have suffered through it — and as a testament to the medical heroes to whom we are now and forever grateful.

As the numbers improve due to strict social distancing, the rollout needs to be done with an air of caution, because without safety, there will be no success.

The plan should initially focus on areas of the country that have been lightly affected, and then move on to the states and cities where the pandemic is under control — and where enough of a turn in the curve has taken place that commerce can be safely conducted.

It’s my feeling that all stores, restaurants and companies in the least-affected regions should be permitted to open soon, perhaps by May 1.

But in many areas, at least for a while, symptom testing by security and paramedics should be conducted before employees and patrons enter the workplace or commercial businesses.

Reopening should lag in New York City, San Francisco, Chicago, Detroit and other major cities, perhaps by just a few weeks to a month — or slightly more for any new hotspots.

For NYC, June 1 seems realistic, based on the current curve data, but it could possibly be sooner.

With the Fed, Treasury, Congress and the White House pulling out all the stops, we are ready to enter the transition stage. Yes, more still needs to be done to help the big banks distribute the cash, and the regulatory structure needs to be relaxed so that the loans can be delivered to millions of needy small businesses.

But get ready, world, America is on the mend. The greatest country on earth will soon be open for business once more.

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Coronavirus unemployment could hit post-depression record, economists say

Labor secretary: 30% ‘overstates’ coronavirus unemployment rate

Labor Secretary Eugene Scalia on the coronavirus’s impact on the U.S. economy.

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Economists expect unemployment in the U.S. to surge to a post-Great Depression high as the coronavirus pandemic forces American life to come to a grinding halt.

Already, in the past three weeks, more than 16 million Americans — or about 10 percent of the workforce — have filed for unemployment benefits, stunning evidence of the economic calamity inflicted by the virus outbreak.

The unemployment rate climbed to 4.4 percent in March, according to Labor Department data that primarily reflected the early part of the month, before a majority of cities and states implemented strict stay-at-home policies, up from a half-century low of 3.5 percent in February.

Despite the unprecedented government fiscal relief effort, including a $2.2 trillion stimulus package, former Federal Reserve Chairwoman Janet Yellen, said this week the unemployment rate is now at least 13 percent, the highest since the 1940s. That would also exceed the 10 percent peak during the worst of the Great Recession more than a decade ago and top the previous post-World War II high of 10.8 percent in 1982.

HERE'S HOW EXPANDED UNEMPLOYMENT BENEFITS WORK

One of the nation’s top economists, Yellen predicted a 30 percent contraction of GDP this year, but has seen models as high as 50 percent.

“The internal dynamics inside the report are a sober, clear-eyed precursor to what is going to be the largest bloodletting in the labor market since the 1929 to 1933 period of the Great Depression,” Joe Brusuelas, chief economist at RSM, said after the release of the March jobs report last Friday.

Brusuelas added: “Despite Congress committing roughly 11.4 percent of gross domestic product in an attempt to mitigate the effects of shutting the economy down to limit the spread of the coronavirus, it is clear that it is not enough.”

MORTGAGE APPLICATIONS PLUMMETING

Estimates vary drastically for how high unemployment will eventually climb, but economists broadly agree that it will be grim. One particularly bleak forecast released by the St. Louis Federal Reserve predicted that up to 47 million jobs could disappear from the U.S. economy, bringing the jobless rate to a stunning 32 percent, exceeding the 24.9 percent peak during the Great Depression.

“These are very large numbers by historical standards, but this is a rather unique shock that is unlike any other experienced by the U.S. economy in the last 100 years,” the Fed researchers wrote.

The downturn seems the first since the 2008 financial crisis to be dubbed a recession by the National Bureau of Economic Research, which described it as a “significant decline in economic activity” that lasts more than a few months.

HOW TO FILE FOR UNEMPLOYMENT BENEFITS

Unemployment could take years to return to pre-coronavirus levels, according to a Bloomberg survey of economists. The economists projected that unemployment will fall gradually after peaking in the second quarter of 2020, but will only drop to 8.1 percent in the final three months of the year. Even in 2020, unemployment is expected to remain at 5.4 percent, well above the historic lows consistently seen prior to the pandemic.

“It will be a gradual re-opening of the economy, so a return to ‘business as usual’ is many months away. Throw in crippling financial losses and a legacy of defaults and it means we estimate U.S. economic output won’t return” to the late-2019 peak until mid-2022 at the earliest, James Knightley, chief international economist at ING Financial Markets, wrote.

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Fed To Provide Up To $2.3 Trillion In Loans To Support Economy

Continuing its unprecedented steps to support the economy amid the coronavirus pandemic, the Federal Reserve announced additional actions on Thursday.

The Fed said it will provide up to $2.3 trillion in loans to assist households and employers of all sizes and bolster the ability of state and local governments to deliver critical services during the coronavirus pandemic.

“Our country’s highest priority must be to address this public health crisis, providing care for the ill and limiting the further spread of the virus,” said Federal Reserve Chair Jerome Powell.

He added, “The Fed’s role is to provide as much relief and stability as we can during this period of constrained economic activity, and our actions today will help ensure that the eventual recovery is as vigorous as possible.”

The Fed said the specific actions it is taking include bolstering the effectiveness of the Small Business Administration’s Paycheck Protection Program by supplying liquidity to participating financial institutions.

The central bank said the Paycheck Protection Program Liquidity Facility will extend credit to eligible financial institutions that originate PPP loans, taking the loans as collateral at face value.

Additionally, the Fed said it will ensure credit flows to small and mid-sized businesses with the purchase of up to $600 billion in loans through the Main Street Lending Program.

The Treasury Department, using funding from the Coronavirus Aid, Relief, and Economic Security Act, will provide $75 billion in equity to the facility.

The Fed said it will also increase the flow of credit to households and businesses through capital markets, by expanding the size and scope of the Primary and Secondary Market Corporate Credit Facilities as well as the Term Asset-Backed Securities Loan Facility.

These three programs will now support up to $850 billion in credit backed by $85 billion in credit protection provided by the Treasury, the Fed said.

The central bank also said it will help state and local governments manage cash flow stresses caused by the coronavirus pandemic by establishing a Municipal Liquidity Facility that will offer up to $500 billion in lending to states and municipalities.

The Treasury will provide $35 billion of credit protection to the Fed for the Municipal Liquidity Facility using funds appropriated by the CARES Act.

The Fed noted it remains committed to using its full range of tools to support the flow of credit to households and businesses to counter the economic impact of the coronavirus pandemic and promote a swift recovery once the disruptions abate.

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