Happy Thursday! Today we share the weekly jobs report and it’s not horrible. Additionally, there is information about mortgage relief, eviction bans, new state partners for vaccines, an unfortunate report on the Mainstreet Lending program, and some new resources out from the U.S. Chamber of Commerce. Also, the Illinois House finally approved the ability to hold virtual meetings. Neither the House nor the Senate are planning on returning in person to cast votes until the beginning of March at the earliest.
*Daily Coronavirus update brought to you by Silver Cross Hospital
US jobless claims report
The number of Americans seeking unemployment benefits fell slightly last week to 793,000, evidence that job cuts remain high despite a substantial decline in new viral infections.
Last week’s total declined from 812,000 the previous week, the Labor Department said Thursday. That figure was revised higher from the previously reported figure of 779,000. Before the virus erupted in the United States in March, weekly applications for jobless aid had never topped 700,000, even during the Great Recession.
Continuing claims for benefits, which run a week behind the weekly number, also declined, falling 145,000 to 4.54 million, the lowest total since March 21, 2020. However, the total of those receiving benefits across all program jumped to 20.44 million due to a surge in filings for two pandemic compensation programs: for those who wouldn’t otherwise receive benefits and for those whose regular benefits have run out.
Enrollment under the special pandemic programs rose by nearly 2.7 million for the week ended Jan. 23. The programs had expired Dec. 26 but were renewed by Congress for 2021. Paperwork issues resulted in delays for several states such as Ohio, which saw an increase of more than 90,000 claims last week, according to unadjusted data. The new legislation provides benefits of $300 above what recipients normally would get. California also saw a notable increase, with 23,588 new claims. Several states saw large declines, including Florida (-51,519), New York (-19,824) and Maryland (-19,736).
The job market’s improvement slowed through the fall and in the past two months has essentially stalled. Over the past two months combined, employers have cut 178,000 jobs. Nearly 10 million jobs remain lost to the pandemic despite more than about 12.5 million jobs reclaimed since the depths of the pandemic in March and April.
Though the unemployment rate fell in January to 6.3% from 6.7%, that was mainly because many people who had lost jobs stopped looking for one. The government doesn’t count people as unemployed unless they’re actively seeking work.
Covid-19 Mortgage Relief Ends Soon for Millions of Homeowners
Mortgage forbearance has been a financial lifeline for many Americans navigating the pandemic-ravaged economy, allowing homeowners to eliminate what is often their largest bill for months at a time. But the relief programs, largely designed to last a maximum of 12 months, are set to expire in the coming months, a serious challenge for borrowers who are still out of work or are earning less than they did pre-pandemic.
More than half of 2.7 million active forbearance plans are set to end for good in March, April, May, or June, according to mortgage-data firm Black Knight Inc.
“The biggest concern in my eyes is the number of folks whose forbearance programs are going to end this spring,” said Ralph McLaughlin, chief economist at Haus, a home-finance startup. “Those that were hit the hardest early on and still haven’t found a job are going to be in dire straits.”
The federal Cares Act passed last March allowed borrowers to postpone payments on federally backed mortgages for as long as 12 months. About 75% of U.S. mortgages are guaranteed or insured by the U.S. government, according to Black Knight. Close to one in 10 homeowners signed up for forbearance at the peak of the program’s use last June.
Like other consumer-relief programs crafted during the pandemic’s early, frenzied days—lenders also let struggling borrowers skip payments on credit cards and auto loans, and the government paused payments on federal student loans—mortgage forbearance was envisioned as a short-term fix, a way to buy time for the economy to recover and consumers to get back on their feet.
The agreement has worked for many homeowners. Some paused their payments when they were laid off, then started paying again when they found new jobs. But others are still struggling. Fewer borrowers have exited forbearance plans in recent weeks, and the share of Americans unemployed for more than six months is rising.
Lenders are supposed to work with borrowers when forbearance plans expire, and there are rules to constrain them from making borrowers pay back all their missed mortgage payments at once if the loan is government-backed. Lenders also can offer modifications such as lower interest rates or longer terms to lower the monthly bill—but borrowers typically need to be employed to qualify for a loan modification.
Governor Pritzker Extends Ban on Coronavirus-Related Evictions Until March 6
Gov. J.B. Pritzker extended Illinois’ ban on evictions caused by the coronavirus pandemic until March 6, even as the second wave of the pandemic eases and the vaccination effort gains steam.
The latest executive order from the governor means the state’s ban on most evictions will enter its 12th month. Pritzker ordered a total ban on evictions on March 20, 2020 when he issued a stay-at-home order and extended it as state officials worked to get $5,000 grants to Illinois residents who won a lottery for rental assistance and help with mortgage payments. Illinois’ $300 million housing assistance program was the largest in the nation, officials said.
Pritzker modified the eviction ban in November to cover only renters who earn less than $99,000 annually — or $198,000 if a couple files jointly — to align with the federal ban on evictions, officials said. The federal ban will be in place until March 31, under an order signed by President Joe Biden.
Those who cannot pay their rent must submit a form to their landlords declaring that the pandemic has made it impossible for them to pay all or a portion of their rent. That form is available at ihda.org. Evictions filed and approved before the pandemic can move forward if there are “serious health and safety concerns,” officials said.
Approximately 21,000 households in Chicago could be evicted from their rental homes, according to a forecast released in December by the Lawyers’ Committee for Better Housing and the Center for Urban Research & Learning at Loyola University.
More Than 300 New COVID-19 Vaccination Locations Added
The number of coronavirus disease (COVID-19) vaccination locations across Illinois continues to increase. Since yesterday, more than 340 new retail pharmacy locations have been added to the list of COVID-19 vaccination sites open to the public. There are now more than 850 vaccination locations in Illinois open to the public. The new sites include 339 Walgreens stores throughout Illinois, which will be receiving vaccine out of a federal allocation and not from the state’s allotment. Additionally, four CVS locations are being added.
The State of Illinois is partnering with CVS, Hy-Vee, Jewel-Osco, Kroger, Mariano’s, Meijer, Walgreens, and Walmart pharmacies to provide COVID-19 vaccinations.
• CVS – 4 locations
• Hy-Vee – 16 locations
• Jewel-Osco – 143 locations
• Kroger – 24 locations
• Mariano’s – 31 locations
• Meijer – 8 locations
• Walgreens – 520 locations
• Walmart – 8 locations
While we are working to increase the number of vaccines administered daily, we are limited by the amount of vaccine available and allocated by the federal government. Vaccinations are available only by appointment at this time and we encourage people to check back frequently for open appointments. Until the supply is increased, there will be a great demand and we ask people to be patient. Individuals should be signing up for an appointment to receive their second dose while they are getting their first vaccination.
For information on how to make an appointment to receive the vaccine, updates on the state’s plan and eligibility, and answers to frequently asked questions about the COVID-19 vaccine, go to coronavirus.illinois.gov.
Fed’s aid program for midsize businesses spent only 3% of its total
The Federal Reserve’s Main Street Lending Program, which was designed to provide emergency support to mid-size U.S. companies during the pandemic, lent out a total $17.5 billion — or just 3% of its potential capacity — according to data released Tuesday by the central bank.
The program was maligned from the start: slow to get off the ground, it only opened to borrowers in July. In the six months through December, when the Fed bent to a Treasury Department mandate to close it, it showed the challenges in setting up a program to aid this sector of the economy — companies larger than the typical small businesses that qualify for Paycheck Protection Program lending but not large enough to access capital markets.
The program didn’t come close to the $600 billion that it could have lent out in part because the banks that acted as intermediaries didn’t feel adequately compensated to take on the riskiest borrowers. For healthier companies, the banks often just made regular loans so that they could reap the full benefits of the transaction.
In the Main Street Program, the Fed bought 95% of the banks’ loans for a total of $16.59 billion. It was backstopped by $75 billion appropriated by Congress in the Cares Act. It closed on Jan. 8 after then-Treasury Secretary Steven Mnuchin instructed the Fed to wind it down. Fed Chair Jerome Powell had initially disagreed with Mnuchin’s interpretation of the expiration date in the law, but the Fed ultimately acquiesced to Treasury’s request.
Janet Yellen, who took over as President Joe Biden’s Treasury secretary last month, has said that the program wasn’t successful at getting credit to small- and mid-size companies and that the administration will try to help that sector more effectively.
Illinois House Adopts New Rules & Approves Remote Meetings
The Illinois House adopted new rules on Wednesday that Democrats say are intended to make the legislative process more transparent, but Republicans argue they don’t go far enough in reforming how the General Assembly operates.
The new rules represent one of the first attempts by newly elected House Speaker Emanuel “Chris” Welch to break from the practices and traditions of his predecessor, former Speaker Michael Madigan. Madigan’s opponents claimed he exercised vast authority to decide which bills would be assigned to committees, which ones would come to the floor for a vote, and which ones would not.
“These new house rules really do represent a historical turning point in rules development and adoption in the House of Representatives,” House Majority Leader Greg Harris, D-Chicago, said while explaining the new rules. Harris said the rules are also “just a first step in reforming ways of the past and injecting more transparency and accountability, while ensuring our chamber operates effectively and fairly.”
One of the most significant changes from the Madigan era is a new rule that limits any individual to serving no more than five biennial sessions, or 10 years, in either the office of speaker or minority leader. Madigan served in that role for all but two years from 1983 until this January.
Another major change allows legislative committees to meet and take votes remotely “in the case of pestilence or public danger.” The inability to meet virtually has been a handicap for the House since the start of the COVID-19 pandemic, which virtually shut down the 2020 regular session as well as the fall veto session.
House leaders have said they plan to limit most legislative activity to remote committee meetings at least through the end of February, and they don’t plan on the full House coming back into session to vote on bills until sometime in March or April.
Illinois Senate Committee Holds Meeting with IDES
Representatives of the Illinois Department of Employment Security on Wednesday testified before the Senate Labor Committee about fraudulent claims, continued delays in responding to unemployment applicants and a multibillion-dollar deficit in the fund that pays out benefits.
Acting Illinois Department of Employment Security Director Kristin Richards and members of the department’s staff fielded questions about the backlog that individuals face when they contact the agency with questions about their claims.
While the agency has seen fewer traditional unemployment claims, it has continued to see individuals file roughly 700,000 to 800,000 claims per month since August through the pandemic unemployment programs created through the federal Coronavirus Aid, Relief, and Economic Security Act and other federal programs. Those include the Pandemic Unemployment Assistance program, the Pandemic Emergency Unemployment Compensation program, and the Extended Benefits program
IDES has put in place a callback system to reduce wait times for callers and a web form online for people to submit questions, but Richards said individuals still wait between one to two weeks for a callback from the agency, depending on the subject of the call.
“But I need to stress that if an individual has, for example, reached out to us about the status of their adjudication or appeal it could take four to six weeks because it’s working its way through the process and we need to connect with the right professional to help them. We realize that is less than ideal for individuals dying for an answer from IDES,” she said.
Richards said IDES is working to address those delays by training contractual staff members and adding full-time employees to the agency. The agency has roughly 1,200 employees, Richards said, including about 750 contractual staff.
She said the agency has stopped slightly more than 1 million identity theft claims, including through the traditional unemployment system and the PUA system, but the agency doesn’t know the specific amount of money that has been paid out in fraudulent claims.
Some of the new unemployment programs created during the pandemic, especially the PUA program, left unemployment systems vulnerable, Richards said. “That new program had no employer wage base to balance off of. There was no second step, as a check and balance. Until wage verification documents were required, we saw that imposters were getting in,” she said.
Richards also announced during the virtual committee meeting that the department will begin to send out waivers next week to individuals who had received an overpayment of benefits under the Pandemic Unemployment Assistance, a federally funded program providing unemployment benefits to gig workers and others not traditionally eligible for them. By law, claimants who were overpaid benefits must repay the money they were not due under unemployment laws. The waiver authority provided in federal law allows the state to waive the repayment in certain circumstances if the overpayment was not the fault of the claimant.
The committee also discussed the deficit in the Illinois Unemployment Insurance Trust Fund — which funds unemployment payments – and is projected to have a negative balance possibly exceeding $8 billion in the next two years, according to a presentation from the department.
Sen. Jason Barickman, R-Bloomington, raised questions about the impact of fraudulent claims on the trust fund’s deficit. “We all will have to work on a solution to the trust fund. I think everyone recognizes that,” Barickman said. “There was a tremendous presentation today on the amount of fraud that exists. There was a tremendous presentation on the negative balance that is going to exist in the trust fund and I have no data in front of me on how to tie those two together. Shouldn’t we have that data, as lawmakers, so that we can understand what the financial impact has been on our trust fund?”
In response, Richards said she did not have that information but would work on getting it to lawmakers. Pressed further, Richards said she couldn’t provide a timeframe on when that information would be provided. “I hear you loud and clear,” she said. “We need to come up with the numbers and provide that to the committee.”
Updated Resource Center from U.S. Chamber
The U.S. Chamber of Commerce launched a comprehensive new digital resource center to ensure the business community has the information, tools, and templates it needs to navigate this critical phase of the pandemic response and get back to business.
The COVID Vaccines Digital Resources Center includes FAQs, state-specific guidance and information, employer vaccine communication and strategy guidance, reliable safety, and efficacy information, and more. Click here to access the resources center: https://www.uschamber.com/covid-19-vaccines-digital-resources-center?utm_medium=Email&utm_source=SFMC&utm_campaign=&utm_content=
Program Notices & Reminders
SBA Page Links for Direction and Questions on PPP
1st draw info: https://www.sba.gov/funding-programs/loans/coronavirus-relief-options/paycheck-protection-program/first-draw-ppp-loans
First draw app: https://www.sba.gov/document/sba-form-2483-paycheck-protection-program-borrower-application-form?utm_medium=email&utm_source=govdelivery
2nd draw info: https://www.sba.gov/funding-programs/loans/coronavirus-relief-options/paycheck-protection-program/second-draw-ppp-loans
Second draw app: https://www.sba.gov/document/sba-form-2483-sd-ppp-second-draw-borrower-application-form?utm_medium=email&utm_source=govdelivery
Finally, please join the Joliet Chamber for a virtual conference with Mayor Bob O’Dekirk as he delivers a review of 2020, updates on present City of Joliet projects, and what to expect in the future. On Tuesday, February 23rd, Mayor O’Dekirk will deliver the annual State of the City Address at 11 am. Click here to register: http://jolietchamber.chambermaster.com/events/details/2021-webinar-state-of-the-city-address-6015
Joliet Region Chamber of Commerce & Industry Staff and Board of Directors
Vice President – Government Affairs
Joliet Region Chamber of Commerce & Industry