A Federal Reserve officials prediction on rate increases, disappointing private payroll increases, jobless claims remain steady but elevated, large banks opt out of an SBA forgiveness portal, new data on the effectiveness of ending federal unemployment supplements early, ongoing child care challenges, renewed pandemic restrictions in Connecticut, and a Connecticut request for an agricultural disaster declaration are among the top business news items this morning.
The vice chair of the Federal Reserve said Wednesday that he expects the United States economy to have recovered enough by the end of the next year for rates to begin increasing in 2023. Richard H. Clarida also said he expects other economic trends to support this goal, namely a moderation in inflation and a drop in unemployment.
A report from ADP shows that private payrolls increased by 330,000 in July, less than half of the figure anticipated by economists. The ADP report comes shortly before the monthly Department of Labor jobs report, which will be released on Friday.
Initial jobless claims fell to 385,000 last week, continuing a trend of initial claims hovering around 400,000. Continuing claims fell sharply for the week ending July 17, falling below 3 million for the first time since the start of the COVID-19 pandemic.
Several large banks are opting out of the U.S. Small Business Administration’s direct forgiveness portal for Paycheck Protection Program loans, deciding instead to use their own processes. About 900 lenders have signed on to the portal, and almost 80 percent of the loans originated last year have already been forgiven.
Analyses by the time management and payroll services companies Homebase and UKG suggest that the 26 states that ended federal supplemental unemployment benefits early have not seen a substantial increase in employment. UKG found that shifts among hourly workers in these states grew at half the rate of states that preserved the benefits, while Homebase determined that employment fell slightly in states that ended benefits early.
Child care challenges are continuing to prevent many potential employees from returning to work, according to the New York Times. Parents say they are being deterred by uncertainty over whether young children will be able to return to school or child care full-time this autumn due to the spread of the Delta variant.
Several towns and cities in Connecticut have revived certain pandemic restrictions, such as holding virtual meetings or requiring masks in municipal buildings. However, local governments are so far avoiding more stringent steps such as vaccine mandates.
Governor Ned Lamont has filed a request for an agricultural disaster declaration related to Tropical Storm Elsa in July. If approved, the declaration would make farmers and other agricultural producers in Connecticut eligible for federal disaster assistance to cover losses suffered due to the storm.