Today is the final day of Illinois Phase 2! Tomorrow, multiple businesses and organizations are allowed to open with some restrictions and following of proper standards. The Phase 3 resource guide that the Chamber created and an additional Illinois toolkit are again attached for your reference. Next Tuesday, we will have a representative from the Illinois Department of Commerce & Economic Opportunity on our virtual conference to talk about and answer all your questions regarding what rules you need to follow.
Phase 3 outlook
Governor Pritzker announced today that all is set to move forward. All of the measures will begin from scratch tomorrow in regard to tracking. The soonest that the state can move into phase 4 will be June 26. Phase 4 allows for gatherings of up to 50 individuals and indoor dining. The Governor’s other major announcement today was to focus on nursing homes and move for them to develop their own testing plan for all employees and residents.
Job Report Day
It is Thursday, so that means we have new numbers on unemployment. Some good news up front is that for the first time the jobless rolls shrank. This can be seen as a sign that employees are returning to work slowly after being laid off. Continuing claims, which tally Americans’ ongoing benefit claims in state programs, fell to 21.1 million for the week ended May 16. Analysts were expecting that continuing claims would still be increasing at this time, so this is a good indication of getting back to work.
Initial unemployment claims of 2.12 million were reported in the week ending May 23. With this addition, the total over two and half months is now 40 million individuals. While the latest initial claims were down from the prior week’s 2.45 million and marked the eighth straight weekly decline, it is still far above the 212,000 average of initial claims in the first two months of 2020 and the pre-pandemic record of 695,000.
Businesses are still claiming that they face challenges with employees who do not wish to return to their jobs because of health concerns, limits to childcare, and satisfaction with increased unemployment insurance benefits.
Paycheck Protection Program (PPP) Flexibility
The House on Thursday easily passed bipartisan legislation with a vote of 417 – 1 to provide struggling small businesses with more flexibility while using loans provided through the Paycheck Protection Program. The bill (H.R. 7010), which was an update to bill H.R. 6886 that we had mentioned before, would change the split of payroll vs. non-payroll expense to 60/40% rather than the current 75/25% split. It also extends the time of use to 24 weeks rather than the current 8, the deadline of the end of June to bring back employees would be extended to the end of the year, and if the funds are not forgiven then the loan would have a 5 year maturity rather than the existing 2 year term.
We have covered this topic numerous times and hope that this time around with such evident bipartisan support that the Senate will move forward on the needed changes. Too many small businesses have been unable to properly take advantage of these loans/grants because of the terms and their ability to operate at full capacity if operating at all here in Illinois.
The Senate version is largely similar to what the House has passed, but it only extends the timeframe for small businesses to spend the funds to 16 weeks instead of 24.
On our Virtual Conference next Tuesday, a U.S. Chamber representative will join us to talk about PPP forgiveness, possible changes, and liability protection for businesses.
Illinois Economy Outlook
Illinois may suffer a $76 billion reduction in its economic output and some 550,000 in job losses by March 2021 in the wake of the COVID-19 pandemic, according to a new report from a group of University of Illinois scholars. Illinois citizens and businesses will collectively lose more than $28.5 billion in income. Ultimately, as many as 1.5 million Illinois employees could be out of work. Hopefully, things will begin to turn around as soon as the Phase 3 reopening tomorrow.
Chicago Fed Survey of Business Conditions
All chamber members are invited to partake in another survey. This time it comes to us from the Chicago Fed and the purpose of this survey is to collect information on current economic conditions in our region. The knowledge you share helps Fed policymakers make better informed decisions. Go here to take the survey: http://frb.co1.qualtrics.com/jfe/form/SV_cBeivMHG8yQWkCN?Q_DL=ELwdtkO3p9POxgn_cBeivMHG8yQWkCN_MLRP_3KPwPVWJLXsv20R&Q_CHL=email.
Finally, in addition to the mentioning of our Virtual Conference on Tuesday with representatives from the DCEO and U.S. Chamber (watch for registration details), we will also be announcing details for a Virtual Conference on Thursday with Illinois House Assistant Majority Leader Natalie Manley and Illinois State Senator Jennifer Bertino-Tarrant as we discuss what passed and what did not pass through the special session last week and weekend in Springfield.
Joliet Region Chamber of Commerce & Industry Staff and Board of Directors
Vice President – Government Affairs
Joliet Region Chamber of Commerce & Industry