Good afternoon,
Yesterday was a big day when it came to be grappling with the economic impact of the chain of events that hit hard in mid-March.
The Labor Department released its national unemployment figure of 4.4 percent. The figure is basically meaningless since it does not reflect the current layoff tsunami.
In Delaware, the headline came in the form of nearly 30,000 new jobless claims filed during the past couple of weeks. That number alone, when compared to total employment back in February of this year roughly, translates into a six percent jobless number.
Add in the 19,000 who were jobless in February and we‘re staring at a 10 percent unadjusted rate. The state’s highest unemployment rate in recent times was a seasonally adjusted 8.7 percent in the spring of 2010.
The rate is likely to go higher as more employers are forced into layoffs.
We do have a safety net that includes weekly jobless payments of up to $600 a week on top of the state’s paltry $400. It will cushion the blow but will not be enough for many families trying to make a mortgage, car and credit card payment.
In response to this grim picture, the Federal Reserve went well beyond its usual task of monitoring the nation’s money supply and issuing reports by rolling out its own $2.3 trillion economic package.
This is on top of the CARE Act, which comes with a comparable price tag and seems destined to get more money from Congress.
It would take a doctorate in economics to understand the bells and whistles in either program.
But it is clear that the Fed’s package will provide resources for existing programs like CARE’s Paycheck Protection Program, which quickly ran out of the $350 billion that was authorized.
The Paycheck program functions as a grant, since it forgives all or part of the loan for employers that retain all or part of their staffs.
Another key component in the Fed package is a Main Street lending program aimed at smaller businesses as well as a loan component that will help units of government manage massive budget shortfalls. (In Delaware, the budget gap could amount to as much as $1 billion).
Will it be enough and how will we pay the bill that will come due? We will find out in the coming year.
I know this weekend will seem sad and unsettling as many near and dear to us will not join us at services or the dinner table. Keep in your thoughts family, friends and neighbors, especially those on the front lines. – Doug Rainey, chief content officer.
