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Fed Announces Plan to Preserve Low Interest Rates Even When Inflation Picks Up

  • On Thursday, the Federal Reserve announced a new approach to inflation, allowing inflation to run above the 2 percent target before increasing interest rates
  • The move signals that interest rates on home and business loans will likely remain extremely low for several years
  • Fed also shifts stance on employment in response to higher jobless levels due to the COVID-19 pandemic
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Report Warns of Drop in Consumer Spending if Supplemental Unemployment Ceases

  • JPMorgan Chase Institute study determines that $600 a week supplemental unemployment has helped keep consumer spending levels healthy during COVID-19 pandemic
  • Warning that aggregate spending could drop 4.3 percent if at least some of the benefits are replaced
  • Congress still working on unemployment deal following expiration of enhanced benefits last week
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Unemployment Statistics Show Uneven Recovery Across U.S.

  • Some states see rapid recovery in jobless rates, while high unemployment rates persist in Northeast and other areas
  • Friday’s labor report will shed some light on whether recent spike in COVID-19 cases has worsened employment levels
  • Few CEOs expect V-shaped recovery
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Unemployment Extension Hits Partisan Roadblock As Enhanced Benefits End

  • Democrats reject Republican proposal of short-term extension of enhanced unemployment benefits as insufficient as supplemental $600 a week expires tonight
  • Many states have already distributed their last enhanced unemployment checks
  • With several unemployment options on the table, congressional and White House leaders set to continue negotiations
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Small Business Employment Recovery Falters In States With Rising COVID-19 Numbers

  • Job recovery at small- and medium-sized businesses has slowed or reversed in states that have seen a recent surge in COVID-19 cases
  • Employment at these companies is down 23 percent on an annual basis
  • Effect largely concentrated in Sun Belt states, where shutdown orders have been reinstated
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Small Business Employees Return to Work – With Reduced Hours and Wages

  • Data shows a 2.4 percent increase in small business headcount in June compared to the previous month
  • Cuts in hours and pay rates have been more than furloughs likely to account for reduced wages
  • Employees have also shown an increased willingness to voluntarily leave a job for new opportunities
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Yes, You Can Restart Unemployment Benefits If You’re Laid Off Again

  • American workers may find themselves unemployed a second time due to resumed shutdowns or PPP depletion
  • The CARES Act and other rules allow people to get benefits over a longer period of time
  • What happens when the ‘benefit year’ ends
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Layoffs Stuck at High Level as 1.3 Million Seek Jobless Aid

  • More than 1.3 million Americans applied for unemployment benefits last week
  • Resurgence in COVID-19 cases forces reversal or pause of reopening plans in several states
  • Companies warn of potential need for further layoffs as economy regains only about one-third of jobs lost in March and April
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Economists Push For Additional Direct Cash Payments to Aid Economy

  • A group of 153 economists calls for additional direct cash payments to Americans to help stimulate the economy
  • Payments under the CARES Act helped boost spending among lower income households, mostly for essentials
  • Supplemental unemployment funds set to expire at end of July
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