The restaurant booking site OpenTable for example predicts one in four

The restaurant booking site opentable for example

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The restaurant-booking site OpenTable, for example, predicts one in four restaurants are likely to close because of the virus. And airlines that typically bank on selling at least 80% of their seats to make money will have to cut flights, amenities, and jobs if only 60% of their seats are filled in a post-pandemic world. Those are just a few of the nightmare scenarios. For now millions of workers in these fields are on furlough and getting paid unemployment benefits by the government. Others who work for idled small businesses have been put back on company payrolls through an emergency federal program that provides forgivable loans. Yet if these job losses turn from temporary to permanent it will make a recovery all the harder, keeping unemployment in the double digits at least until 2021. The jobless rate rose unofficially to almost 20% in May, according to a government analysis, from just 3.5% three months ago. More than 20 million people lost their jobs in April alone. Feeling growing public pressure and worried about falling tax revenue, every state is reopening their economies ore relaxing restrictions to try to limit the damage “The longer stay-in-place restrictions prevail, the more likely job losses are permanent rather than temporary,” said economist Stephen Gallagher of Societe Generale. There’s growing evidence that federal help is working for small business and state reopenings. The number of Americans in early May who were collecting unemployment benefits, known as continuing claims, actually fell for the first time since the crisis began. The much slower rise in continuing claims suggests that people are now beginning to return to work ,” chief U.S. economist Paul Ashworth of Capital Economics said. The Trump White House, with an eye toward the 2020 presidential elections, is pushing the states to reopen even faster. Yet most economy watchers, including Federal Reserve Chairman Jerome Powell, suggest Washington will have to spend even more than the $3 trillion it has already approved.
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“This is the biggest shock we’ve seen in living memory. The question that looms in the air is, is it enough?” Powell told senators at a hearing on Tuesday about emergency loans for business. The next pivotal event for the economy is likely to come by midsummer when federal programs that offer extra unemployment benefits and subsidies to keep small business workers on payrolls expire. If not enough workers are able to return to their jobs because business is slow, Congress might need to add more money to the pot to prevent more mass layoffs and another shock to the economy. Local and state governments are also coping with unprecedented declines in tax revenue and are being forced to lay off scores of workers. Democrats and Republicans are divided over whether to help them out, but if the crisis gets worse, a reluctant Trump White House might have to come to the rescue.
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