Chamber Members:
Happy July! Today is the day. After 300 plus daily coronavirus updates, this will serve as the final edition. We hope that the updates have served you well and that at the very least they were informative and allowed you to find information in one spot as a wrap up as you navigated through so many other issues throughout this pandemic. Thanks to all the loyal readers and the many that sent back notes of appreciation. It’s been a pleasure to assist everyone through this special time in history.
With that said, updates won’t be entirely going away. Instead, we’ll pivot (had to use it just one more time) and send out an update two to three times a week focusing on government affairs news. Although covid is still with us, information on relief, programs, testing, etc. has thankfully slowed down tremendously as we work back to normal. The United States is now averaging 258 deaths per day from coronavirus, the lowest seven-day average since the pandemic began, according to data from Johns Hopkins University.
So, today’s update fittingly squeezes in one more jobs update as well as after months of ongoing negotiations, the White House and a bipartisan group of Senators have reached an agreement on a framework to invest in America’s infrastructure. A smaller package passes the house today as well so things are moving finally on that front. Also, updates on the Illinois economy and consumer spending, hotel and restaurant summer rebounds, and vaccines being effective for longer period of time.
*Daily Coronavirus update brought to you by Silver Cross Hospital
House Passes $715 Billion Package, Hoping to Sway Infrastructure Debate
The House on Thursday passed a $715 billion proposal to fund surface transportation and water projects that’s meant to shape parts of the broader infrastructure package — a top priority of President Biden — currently under discussion in the Senate and White House.
Lawmakers passed the legislation largely along party lines in a 221-201 vote with just two Republicans voting for the package. Democrats hailed it as a monumental shift toward more sustainable infrastructure projects, and Republicans warning of lost jobs and a skyrocketing federal debt.
Most Republicans voted against the bill, even though it included funding for specific projects — known colloquially as earmarks — that many had requested for their districts. The legislation includes funding for 403 projects requested by House GOP lawmakers, out of a combined 1,473 projects between the two parties. Yet Republicans opposed the legislation on the grounds that it was overly partisan and costly.
The measure would reauthorize surface transportation programs that are set to expire on Sept. 30, as well as invest in liberal priorities like promoting electric vehicles, strengthening drinking water standards and making utilities more durable against the impact of climate change.
What the Bipartisan Infrastructure Framework Will Deliver for Illinois
President Biden and Vice President Harris recently announced their support for the
$1.2 Trillion Bipartisan Infrastructure Framework, the largest long-term investment in our infrastructure and competitiveness in nearly a century.
The need for action in Illinois is clear. For decades, infrastructure in Illinois has suffered
from a systemic lack of investment. In fact, the American Society of Civil Engineers
gave Illinois a C- grade on its infrastructure report card.
The historic Bipartisan Infrastructure Framework will make life better for millions of
Illinois residents, create a generation of good-paying union jobs and economic growth,
and position the United States to win the 21st century. Specifically, the Bipartisan
Infrastructure Framework will:
• Repair and rebuild our roads and bridges with a focus on climate change
mitigation, resilience, equity, and safety for all users, including cyclists and
pedestrians. In Illinois there are 2,374 bridges and over 6,218 miles of highway
in poor condition. Since 2011, commute times have increased by 7.3% in Illinois
and on average, each driver pays $609 per year in costs due to driving on roads
in need of repair. The Bipartisan Infrastructure Framework will devote more than
$312 billion to transform our nation’s transportation infrastructure and make it
more resilient, including $110 billion for roads, bridges, and major projects. The
Bipartisan Infrastructure Framework is the single largest dedicated bridge
investment since the construction of the interstate highway system.
• Improve healthy, sustainable transportation options for millions of
Americans. Illinoisans who take public transportation spend an extra 68.3% of
their time commuting and non-White households are 1.9 times more likely to
commute via public transportation. 21% of trains and other transit vehicles in the
state are past useful life. The Bipartisan Infrastructure Framework will modernize
public transit with a $48.5 billion investment and invest $66 billion in passenger
and freight rail. The Framework is the largest federal investment in public transit
in history and is the largest federal investment in passenger rail since the
creation of Amtrak.
• Prepare more of our infrastructure for the impacts of climate change, cyber
attacks, and extreme weather events. From 2010 to 2020, Illinois has
experienced 48 extreme weather events, costing the state up to $50 billion in
damages. The Bipartisan Infrastructure Framework includes $47 billion to
improve the resiliency of our infrastructure and support communities’ recovery
from disaster. The Framework is the largest investment in the resilience of
physical and natural systems in American history.
• Deliver clean drinking water to up to ten million American families and
more than 400,000 schools and childcare facilities that currently don’t have
it. Over the next 20 years, Illinois’s drinking water infrastructure will require $20.9
billion in additional funding. The Bipartisan Infrastructure Framework includes a
$55 billion investment to ensure clean, safe drinking water is a right in all
communities. The Framework would completely eliminate the nation’s lead
service lines and pipes and represents the largest investment in clean drinking
water and waste water infrastructure in American history.
• Connect every American to reliable high-speed internet. 7% of Illinoisans live
in areas where, by one definition, there is no broadband infrastructure that
provides minimally acceptable speeds. And 62% of Illinoisans live in areas where
there is only one such provider. Even where infrastructure is available,
broadband may be too expensive to be within reach. 14% of Illinois households
do not have an internet subscription. Just as the federal government made a
historic effort to provide electricity to every American nearly one hundred years
ago, the Framework will invest $65 billion to bring universal, reliable, high-speed,
and affordable coverage to every family in America.
• Upgrade our power infrastructure. In Illinois, an average low-income family
spends 6-8% of their income on home energy costs forcing tough choices
between paying energy bills and buying food, medicine or other essentials. The
Bipartisan Infrastructure Framework will represent the single largest investment
in clean energy transmission in American history, building thousands of miles of
new, resilient transmission lines to facilitate the expansion of renewable energy,
including through a new Grid Authority.
The $1.2 trillion Bipartisan Infrastructure Framework is a critical step in implementing
President Biden’s Build Back Better vision. Still, there is more work to do – to grow our
economy, create jobs, improve living standards, reduce climate pollution, and ensure
more Americans can participate fully and equally in our economy. President Biden
remains committed to the comprehensive agenda laid out in the American Jobs Plan
and American Families Plan. He will work with Congress to build on the Bipartisan
Infrastructure Framework in legislation that moves in tandem, laying the foundation for a
robust and equitable recovery for all Americans
Jobless Claims
New weekly jobless claims fell back below the 400,000 level for the first time in three weeks, resuming improvements after a brief bump higher in initial filings. The Department of Labor released its weekly report on new jobless claims and here were the main metrics from the report, compared to consensus data compiled by Bloomberg:
Initial jobless claims, week ended June 26: 364,000 vs. 388,000 expected and an upwardly revised 415,000 during prior week
Continuing claims, week ended June 19: 3.469 million vs. 3.340 million expected and an upwardly revised 3.413 million during prior week
At 364,000, new filings reached the lowest level since March 2020. Prior to Thursday’s report, initial unemployment claims had stagnated in recent weeks, holding stubbornly above the 400,000 level even as employers across the economy struggle to fill open positions. However, the overall trend has improved markedly over a longer time horizon, with new claims coming in at about half their total from the beginning of 2021. New claims were coming in at just over 200,000 per week on average throughout 2019.
“After two upside surprises, claims have dropped to a new cycle low, but only just; the previous low was 374K, three weeks ago,” Ian Shepherdson, chief economist for Pantheon Macroeconomics, wrote in a note. “It’s possible, then, that the recent data signal a slowing in the trend rate of decline in claims, but these numbers are noisy and we aren’t going to rush to judgment on the back of such a short run of data.”
“Moreover, the added complication over the next few weeks is that claims are often distorted in late June and early July by the annual automaker retooling shutdowns, which vary in their exact timing and extent from year-to-year,” he added.
The decline in new jobless claims was broad-based, with most U.S. states contributing to the decrease. Pennsylvania saw by far the biggest drop in new claims at 18,000 on an unadjusted basis. Kentucky also saw a drop of 8,000 new claims, while filings in California fell by nearly 7,000.
Other states still grappled with elevated insured unemployment rates, or proportion of those claiming unemployment benefits to the total state population. Rhode Island’s insured unemployment rate was at 5.1% for the week ended June 12, or more than double the U.S. average of 2.5%.
Nevada, a tourist-heavy state that has for months had one of the highest insured unemployment rates in the nation, saw the second-highest rate at 4.4% for the week. Puerto Rico’s insured unemployment rate ticked up to 3.9%, and Connecticut rounded out the top four highest rates at 3.8%.
Illinois Economy Surges in First Quarter
The Illinois economy showed strong signs of recovery during the first quarter of 2021 as businesses continued to reopen from the pandemic and direct government payments flowed to businesses and individual consumers. Data released last week from the U.S. Bureau of Economic Analysis showed the state’s economy grew at an annual rate of 6.4 percent during the quarter as its gross domestic product – the market value of all goods and services produced by labor and property – approached its pre-pandemic level.
That growth rate was on par with the rest of the nation and slightly ahead of the pace set by most of Illinois’ surrounding states. But the state’s total GDP, at just under $770 billion annually, remained below where it was two years earlier, before the pandemic.
BEA noted that government assistance payments, including direct economic impact payments, expanded unemployment benefits and Paycheck Protection Program loans all flowed to households and businesses during the quarter through the Coronavirus Response and Relief Supplemental Appropriations Act, passed in December, and the American Rescue Plan Act, which passed in March.
But the agency also noted that the full impact of the pandemic could not be quantified in the state GDP numbers because the impacts were generally embedded within the data and could not be separately identified.
“I think that is substantially stimulus, which means borrowing money from China and throwing it into the Illinois economy,” Illinois Chamber of Commerce President Todd Maisch said during an interview. “But there’s no substitute for basic demand in the economy. So as much as (President Joe) Biden wants to spend more and more trillions of dollars, there’s no substitute for basic demand in the economy. And we’re still lacking that, there’s no doubt about it.”
The most improved sectors of the Illinois economy were also among the hardest-hit by the pandemic – arts, entertainment and recreation, which grew at a 38.6 percent annual rate, followed by accommodation and food services, which grew at an 18.4 percent pace.
Durable goods manufacturing also showed strong improvement with a 13 percent growth rate, as did the information sector, which includes the media, which grew at a 14 percent rate. But with the state’s unemployment rate still relatively high at 7.1 percent, and the overall labor participation rate at only 62 percent, Maisch said the state’s economy is still not fully recovered, and he suggested that some government policies such as enhanced unemployment benefits that are aimed at mitigating the impact of the pandemic might be making things worse.
“That extra payment that you get from unemployment, it really does impact people’s behavior and their willingness to get back in the workforce,” he said. Maisch also pointed to lingering concerns among many about the safety of returning to the workplace as well as structural issues in the economy such as the inability of many people in the workforce to find affordable childcare.
Speaking at an unrelated event in Decatur, however, Gov. JB Pritzker disputed the idea that enhanced unemployment benefits are incentivizing people not to go back to work. “I think it is a Republican right-wing talking point that says that people are just choosing to be lazy, to stay home, to get the extra few hundred dollars while they can,” Pritzker said.
Consumer Spending Is Primed to Fuel Summer Growth
Households increased spending in May on services that they shunned earlier in the pandemic, helping position the economic recovery for a strong summer as more businesses fully reopen and consumers unleash pent-up demand.
Spending was flat last month as consumers cut back on purchases of big-ticket items and rotated more of their money toward in-person services. Still, this spring shaped up to be a solid one for spending: April expenditures were upwardly revised to a 0.9% increase from a previously reported 0.5% rise. Overall spending in May was well above pre-pandemic levels, with spending on goods up nearly 20% from February 2020 and services down about 1%.
“Overall consumers are still well positioned to attack the summer with a lot of enthusiasm,” said Gregory Daco, chief U.S. economist at Oxford Economics. “We have households that have a strong itch to spend, they have the means to do so, and they have fewer and fewer health reasons not to indulge.”
There are signs that suggest services spending has room to grow. For instance, spending on recreation rose 3.5% in May over the previous month, the Commerce Department said, as summer activities got under way. Airline travel has also increased, with scheduled seats on U.S. airlines climbing into the summer.
Separate data shows households with incomes of more than $200,000 spent 16% more on restaurants in May than in April. Those with incomes between $31,000 and $60,000 increased their spending by 5%, according to an analysis of credit- and debit-card transactions from Affinity Solutions, a consumer-data firm.
Higher-income Americans are driving much of the spending growth, said Jonathan Silver, chief executive of Affinity Solutions. These consumers have more money to pay for services that they weren’t able to throughout much of the pandemic, he added. The economy’s recovery continues to be uneven. A recent downward trend in worker filings for unemployment benefits stalled in mid-June. Hiring is picking up but lagging behind gross domestic product growth as millions of workers remain sidelined because of factors such as expanded unemployment benefits and increased child-care responsibilities.
Vehicles and other products are in short supply amid a global computer-chip shortage, and other supply constraints across the economy have left manufacturers struggling to meet demand. These factors in turn have helped push up prices, raising inflation worries and prompting the Federal Reserve to signal it may raise interest rates sooner than previously anticipated.
The core personal-consumption expenditures price index, which excludes often-volatile food and energy items, rose 0.5% in May from a month earlier. Core prices increased 3.4% from a year earlier, the fastest pace since 1992. The Federal Reserve aims for 2% annual inflation to keep the economy growing at a healthy pace.
Higher prices and product shortages likely hurt sales for some goods such as autos last month. Consumer demand is also weakening for some items—such as household appliances and furniture—that people bought during the pandemic while many stores and restaurants were closed.
Spending has helped propel the broader U.S. economy, which grew at a 6.4% annual rate in the first quarter. Forecasting firm Oxford Economics estimates that consumer spending will grow around 9% this year, the strongest rate since 1946.
Rising vaccination rates are giving more people confidence to leave their homes as businesses increasingly reopen. Consumers have money to spend, in part due to government stimulus distributed when the pandemic restricted businesses and activities. While fiscal stimulus is fading, incomes remain well above pre-pandemic levels.
The personal saving rate eased to 12.4% in May from 14.5% a month earlier. The saving rate remains higher than in February 2020, when it was 8.3%. The relatively elevated saving rate signals consumers have more room to spend.
Consumers spent 0.7% more on services in May than April, a steady pace, albeit a slowdown from earlier in the spring when stimulus checks first hit bank accounts and business reopenings began. They curtailed spending on long-lasting goods such as cars and furniture by 2.8% last month.
Friday’s report also showed personal income fell 2% in May from April, as the impact faded from government stimulus checks sent out earlier in the year. Incomes fell in April after rising sharply in March due to the government’s disbursement of $1,400 stimulus checks to many households. Growth in wages and salaries will be an important driver of spending as the effect of the fiscal stimulus wanes, economists say.
Pay, particularly for lower-wage workers, has been rising rapidly as employers seek to fill jobs in a tight labor market. Average weekly wages in leisure and hospitality, the sector that suffered the steepest job losses in 2020, were up 10.4% in May from February 2020, Labor Department data show, outpacing the private sector overall.
Hotels and Restaurant Rebound Summer Held Back by Shortages
Summer looked like the on-ramp to a big recovery for the leisure and hospitality industry, hard hit by the pandemic and its lockdowns and propped up with billions in government aid. Instead, restaurants, theme parks, hotels and tourist attractions are finding themselves squeezed from multiple sides: rising costs, worker shortages, unpredictable supplies of some foods and, in some cases, demand so overwhelming it’s difficult to avoid leaving customers dissatisfied.
Some hotels are limiting services because they can’t hire enough staff to keep up. Experienced servers at one restaurant chain are having to train new people five days a week. A theme park says rapidly rising demand at restaurants and attractions across the U.S. means every week brings concerns about a shortage of some food item or higher commodity prices.
Together, these forces are restraining the recovery for an industry that, just before the pandemic, was responsible for nearly 17 million jobs and 4.2% of U.S. GDP, much of it through small businesses. Operators of hospitality businesses are battling back with tactics ranging from higher pay, signing bonuses and perks for workers to technology such as tablets where restaurant customers self-order or self-pay.
The challenges also threaten to hobble the rebound for regions reliant on summer tourism. In the seaside county of Cape May, N.J., this season accounts for as much as 75% of annual tourist revenue, said Vicki Clark, president of the county’s Chamber of Commerce. Though signs still point to a robust summer for the county, its businesses face pandemic-related difficulty in getting workers through the J1 visa program that lets foreign students work in the U.S. on summer vacation. The businesses typically get about 2,750 such workers. This year they expect closer to 250 because of visa backlogs that have prevented many of the students from coming to the U.S.
The labor crunch is forcing some Cape May restaurants to curtail hours, amusement parks to close certain rides, and hoteliers to pull back on housekeeping, Ms. Clark said. In all, hiring woes could cost the region up to 10% of its annual $6.9 billion tourist economy, she estimated.
With many people now vaccinated for Covid-19, yet some international travel curbs still in place, domestic vacation travel has shot up faster than expected, said Tori Barnes of the U.S. Travel Association. The trade group representing all parts of the travel industry estimates 72% of Americans are planning summer trips this year, double the percentage in 2020. As for restaurant demand, dining-out numbers on Memorial Day weekend were up nearly 4% on average from 2019, according to reservation site OpenTable.
The service cutbacks that some places find they must make for lack of staff risk alienating customers and jeopardizing future business, said Henry Harteveldt, a travel industry analyst at Atmosphere Research Group, a market-research firm. “It’s very, very difficult to earn customer loyalty. It’s frighteningly easy to lose it,” he said.
The hospitality industry benefited from billions of dollars in forgivable federal loans through the Paycheck Protection Program last year and when it was renewed with a focus on small-business owners this year. Congress also authorized $29 billion in federal grants to restaurants, bars and other food-service providers this year. But thousands of those grants have been halted following lawsuits that stopped the government from distributing funding on the basis of race and sex as was the priority in the program’s initial period. Restaurant owners say they now feel the pressure to be profitable on their own.
Eateries, in particular, have much riding on a summer rebound. In a National Restaurant Association survey of 2,500 operators, the majority said profits and sales were lower, while costs were higher, than before the pandemic.
Even some hospitality businesses that have weathered the pandemic relatively well are wrestling with the multiple challenges. Restaurant and bar employment remains down by 1.5 million since the pandemic began. By contrast, warehousing and storage jobs are up by 81,000, jobs in management and technical consulting are up by 29,000, and the economy has added a net 23,000 jobs in insurance and finance. In manufacturing and retail trade, worker numbers are now 96% and 97%, respectively, of what they were prior to Covid-19. But in leisure and hospitality, employment is still just 85% of what it was before the pandemic.
The rate of hotel and food-service workers quitting their jobs was at a two-decade high in April 2021, and data from hiring sites show more workers pivoting away from the sector.
Of recreation and travel workers who updated their LinkedIn profiles with a new job in April 2020, 79% reported working in a different industry, according to the professional-networking site. The percentage stayed close to that level through the first part of this year, with many going to software and IT, finance and healthcare.
By contrast, in April 2019, 58% of job changers from the recreation and travel sector transitioned to a new industry. Meanwhile, most other industries saw declines in movement or minor increases across sectors during the pandemic compared with pre-Covid patterns.
Economists say the hospitality industry might adjust and settle back into a labor-force equilibrium when more employers raise wages, but Nela Richardson, chief economist at payroll processor ADP, said there are precedents for labor markets to shift and create long-term worker shortages. “In 2008, when there was a real pullback in construction, many workers were immigrants and went back to South America. We have shortages there to this day,” she said.
The pay increases in hospitality jobs are a boon to workers who have long contended with some of the lowest wages, but they mean permanent cost increases for the operators. Hourly wages for nonsupervisory employees in the leisure and hospitality sector rose nearly 9% in May from the previous year, the most of any of the job categories, an analysis of federal data shows. Chipotle Mexican Grill Inc., McDonald’s Corp. and Olive Garden owner Darden Restaurants Inc. have all announced wage increases in recent months.
Some businesses are expanding technology as a “hedge against labor inflation,” as Dine Brands Global Inc. CEO John Peyton put it. The Applebee’s restaurants owner invested in server tablets and digital apps that let customers pay at their tables without a waiter. Such changes, along with digital codes that customers can scan to bring up menus, will save on labor and are likely to shape the industry for years to come, Mr. Peyton said.
Supply and costs have also grown less predictable in the hospitality sector, especially for restaurants that rely on long lists of commodities, each undergoing its own fluctuations at this stage in the pandemic.
Pfizer, Moderna Vaccines May Offer Protection for Years
Both the Pfizer-BioNTech and Moderna COVID-19 vaccines have set off an immune system response that likely offers longer-lasting protection against the coronavirus, according to a new study released. The findings, which were published in the journal Nature, add more evidence to the notion that people immunized with mRNA vaccines may need less or even no boosters at all after they’ve been given their two shots.
According to the study, such mRNA-based vaccines create a more “persistent” germinal centre B cell response, essentially meaning that a person’s immune response would be much stronger and more durable. “Germinal centers are the key to a persistent, protective immune response,” said senior author of the study, Dr. Ali Ellebedy in a press release.
Ellebedy, who is also an associate professor at the Washington University School of Medicine, said such centres are where “our immune memories” are formed and that the longer we have them, the more durable our immunity would be due to a “fierce selection process” happening there.
While both Pfizer and Moderna have previously said that booster shots would likely be needed on an annual basis, the results come amid mounting evidence of the mRNA vaccines’ efficacy, and longevity, of protecting against COVID-19 — without the need of a booster.
The researchers examined participants four months after they received their first Pfizer dose and found that the germinal centres in their lymph nodes, likened to a sort of boot camp for immune cells, kept pumping out said cells to protect against the virus that causes COVID-19.
“We found that germinal centers were still going strong 15 weeks after the vaccine’s first dose. We’re still monitoring the germinal centers, and they’re not declining; in some people, they’re still ongoing,” he said.
According to one expert, the study’s results provide “tantalizing evidence” that booster shots of the vaccine may not need to be doled regularly, but it doesn’t really strike him as surprising. Dr. Gerald Evans, chair of the Division of Infectious Diseases at Queen’s University, said that there’s been evidence suggesting that the “protective immunity” from contracting a coronavirus — like the common cold — could last for decades.
Several researchers have previously suggested that people who have recovered from COVID-19 before receiving a vaccination may not need a booster due to an increased presence of antibodies in their immune system against the virus. “So it’s kind of not surprising that the vaccines would induce these very profound what seemed to be probably prolonged immunological responses to vaccine,” said Evans.
However, according to Evans, any further changes or mutations to the virus that causes COVID-19 could potentially prevent or hinder the vaccine from what it’s supposed to do. Such is the case with several variants of concern like the Beta variant, which appears to be more resistant to the effects of vaccines. The upside against such variants though, Evans said, is the technology behind the Pfizer and Moderna vaccines.
mRNA vaccines can be rapidly tweaked — within six weeks — to account for protection against any new or “emerging variants,” according to Evans. “I mean, you got to vaccinate a whole bunch of people again, you know. But it’s not insurmountable.”
Program Notices & Reminders – Expanded Information
| Special Presentation: Small Business Compliance with Department of Labor Did you know that most employees in the U.S. are covered by the federal Fair Labor Standards Act (FLSA)? As an employer, are you aware of and meeting your obligations? The chamber recently joined with Andres Mendez, a Benefits Advisor with the U.S. Department of Labor’s Wage & Hour Division and the Employee Benefits Security Administration for an overview of the COBRA premium assistance under the American Rescue Plan Act of 2021, federal wage and hour laws, and how they are enforced. Click here to view the special presentation: https://youtu.be/n5tWXm1BDyE Connect with the Workforce Center Visit the Workforce Center of Will County’s web page for more information about the programs, services, and activities available for Will County businesses and residents. Small Business Tax Credit Programs |
| Small Disadvantaged Business Contracting Goal News On June 1, 2021, the centennial of the Tulsa Race Massacre, the Biden-Harris Administration announced new steps to help narrow the racial wealth gap and reinvest in communities that have been left behind by failed policies. Specifically, the Administration is expanding access to two key wealth-creators – small business ownership and homeownership – in communities of color and disadvantaged communities.
|
|
Federal Contracting Webinar Series Do you need help with federal contracting? The ChallengeHER webinar series offers education and training on the federal contracting system. Below is a list of upcoming webinars.
|
Stay well,
Joliet Region Chamber of Commerce & Industry Staff and Board of Directors
Mike Paone
Vice President – Government Affairs
Joliet Region Chamber of Commerce & Industry
[email protected]
815.727.5371 main
815.727.5373 direct