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USA Today
23-04-2025
- Business
- USA Today
'I'm alarmed': With recession fears rising, jobless benefits still fall short: Report
'I'm alarmed': With recession fears rising, jobless benefits still fall short: Report Show Caption Hide Caption Can you get unemployment if you quit? What to know about benefits. Being out of work doesn't mean you automatically qualify for unemployment benefits. Here's what to know before applying. During the COVID-19 recession, 22 million laid-off workers sought unemployment benefits, sparking chaos in the payment system and compounding the financial woes of jobless Americans. Five years later, with many forecasters predicting another downturn is likely in 2025, a far less burdened benefits system remains plagued by myriad problems that could hamper payments to Americans who lose their jobs in an economic slump, according to a new report. Nearly 1 in 5 unemployment insurance recipients say their benefits were inadequate, with a third complaining they've struggled with food insecurity despite the payments, according to a survey and study by the National Employment Law Project. Large shares of beneficiaries also lament delayed payments, jammed phone lines, hard-to-navigate websites and incorrectly denied benefits, among other issues, according to the survey, which was conducted in partnership with online polling firm YouGov in September. The firms surveyed 1,480 workers who were unemployed at some point from 2019 to 2024 and the results were provided exclusively to USA TODAY. 'I'm alarmed,' said Amy Traub, senior researcher and policy analyst for NELP and a co-author of the study. 'The unemployment insurance system is really falling far short in its function of supporting unemployed workers.' The gaps exist even though Congress provided $1 billion in the American Rescue Plan of 2021 to shore up jobless benefits. Traub said the money did foster more timely payments and website improvements but there are still shortcomings in those and other areas. States finance unemployment payments themselves while the federal government bankrolls the system's technology and infrastructure. Both are funded by payroll taxes that are generally paid by employers. Why do we have unemployment insurance? Besides helping workers make ends meet when they lose their jobs, jobless benefits bolster consumer demand, helping avoid – or dig the economy out of – a recession, the NELP report says. And the payments ensure that workers have enough time to find a job that best suits their skills, improving the efficiency of the labor market and economy. Economists surveyed say there's a nearly 50% chance of a recession because of President Donald Trump's sweeping tariffs on imported goods, according to a survey by Wolters Kluwer Blue Chip Economic Indicators. JPMorgan Chase has put the odds at 60%. Among the lingering trouble spots with the system: Benefits fall short Nineteen percent of the unemployment recipients polled said the money they received wasn't enough to meet their financial needs, the survey showed. To be sure, the checks go a long way toward helping laid-off workers stay afloat. Of unemployment applicants who didn't receive benefits, 51% experienced hunger, 40% struggled to pay their rent or mortgage and 37% had a hard time paying medical bills, according to the survey. By contrast, among those obtaining payments, 33% went hungry at times, 29% had issues with housing payments and 30% couldn't pay medical costs. Yet it's troubling that about a third of beneficiaries still had difficulty covering basic expenses, Traub said. 'During the next recession, if we have large numbers of workers who lose their jobs, we want to be sure they're not going hungry or losing their homes,' she said. A big reason many recipients can't cover such necessities is the wide disparities among states in their benefit disbursements, Traub said. In early 2024, for example, Alabama workers received an average benefit of $252 a week, replacing 29% of their prior wage on average, while workers in Washington state got an average $721 a week, or 49% of their previous pay. On average across the U.S., unemployment covered 36% of a worker's previous pay. Also, most states provide up to 26 weeks of benefits – a standard that's typically expanded in a recession – but 13 states dole out checks for 12 to 21 weeks, including Arkansas, Iowa, Michigan, Oklahoma, South Carolina, Alabama, Kansas and Florida, according to the Center on Budget and Policy Priorities. Jammed phone lines, uncooperative websites, late payments During the COVID-19 pandemic, an unprecedented surge of applicants struggled to obtain payments. Surprisingly, freshly laid-off workers nowadays, numbering about 200,000 each week, still face obstacles. From 2022 to 2024, about 22% of applicants said they couldn't reach their state unemployment office by phone, the same share as during the pandemic (2020-2021); 20% complained of hard-to-navigate websites vs. 23% during the health crisis; and 17% pointed to delays receiving payments, compared to 21% during the crisis. Many states beefed up staffing during the COVID-19 pandemic, shifting workers from other parts of state unemployment agencies to customer service, but moved them back to their old positions as the spike in applications ebbed, Traub said. In many cases, that left a reduced but still sizable share of workers struggling to access benefits. Employers discourage workers from applying Nearly 1 in 5 workers said an employer tried to deter them from applying for benefits, with 14% saying such steps included telling them they weren't eligible and 5% threatening retaliation if they applied. Employers may have the incentive to dissuade staffers from filing for unemployment because the taxes they pay to support the benefits system are based on the number of their workers who successfully file claims. 'It's not really up to the employer who's eligible and who's not,' Traub said. Incorrectly denied benefits About 17% of applicants polled said they were improperly denied benefits since the pandemic. The question of whether applicants are entitled to payments can get thorny, hinging on whether they were laid off or fired for cause, and whether they met thresholds for the number of hours they worked and the wages they earned in previous months, Traub said Discrimination About 7% of applicants said they faced discrimination because of race or other reasons when they sought benefits, the survey showed. In a related issue, a growing number of states are using new ID verification systems to detect fraud, according to the report, which was coauthored by researchers Alexander Hertel-Fernandez and Sanjay Pinto. Twelve percent of Black workers report trouble verifying their identity, more than twice the share of white employees, according to NELP's survey. The NELP report pointed to facial recognition technology that's less accurate for people with darker skin and questions that rely on data from credit bureaus. Black workers are less likely to have substantial credit histories on file, the report said. Workers in Southern states face more hurdles Broadly, workers in Southern states are far more likely than those in other regions to complain of discrimination, delayed payments, low payment levels and inadequate duration of payments, the report said. It cited racism and a 'lack of adequate support for social infrastructure' that may more prevalent in the South. Among NELP's recommendations to bolster the system:
Yahoo
18-04-2025
- Business
- Yahoo
Economist says Trump polices will impact the Hampton Roads economy, though details unclear
President Donald Trump's policies around tariffs and reducing the federal workforce could slow growth and send inflation climbing ever higher, but the details of impacts to the Hampton Roads economy still remain unclear, a region economist said Thursday. 'What does all of this mean? A lot of uncertainty ahead,' said Nikki Johnson, regional economist with the Hampton Roads Planning District Commission. Johnson told the commission the regional economy is very exposed to Trump's desire to cut the federal workforce. With around 51,769 federal employees, Hampton Roads is the third-largest metro area employer of federal workers, behind only Washington, D.C., and New York., Johnson said. Cutting federal workers will also have a larger economic impact than if the cuts were from the private sector, Johnson said, because they make significantly higher salaries on average. Hampton Roads federal workers make an average of around $131,000 annually, compared to an average of just $51,000 for private sector workers, according to the Planning District Commission. 'What this means is that for every federal civilian job that we cut, you would have to create two new private sector jobs to maintain the same level of total compensation within the region,' Johnson said. Johnson said the United State has around 2.3 million federal civilian employees, with about one in three of those working in the U.S. Department of Defense. Another 19% work in the Department of Veterans Affairs. Both of those agencies have been targeted for cuts. The Defense Department aims to cut between 5% to 8%, or about 50,000 to 60,000 workers, from its workforce, according to Associated Press reporting. The Department of Veterans Affairs plans to reduce its overall staffing levels by 72,000 workers. Some employees have already been cut from the Hampton VA Medical Center, though another VA outpatient clinic opened in Chesapeake this week. Trump's chaotic tariffs policy could also impact business at the Port of Virginia, Johnson said. Though he has paused tariffs with many countries, Trump has hit China with 145% tariffs, implemented a baseline 10% tariff and established 25% tariffs on imported automobiles, aluminum and steel. Johnson said the Port of Virginia imported around $9.2 billion in goods from China in 2024, and exported another $2.9 billion in merchandise to China during the same time period. Johnson said the tariffs have also caused the biggest drop in consumer sentiment since the 2022 inflation shock. Additionally, she said the latest Blue Chip Economic Indicators forecast was predicting higher inflation and slower growth for the U.S. economic, which is sometimes called stagflation. Trevor Metcalfe, 757-222-5345,
Yahoo
16-04-2025
- Business
- Yahoo
Hawaii economists offer bleak take on Trump tariffs
JAMM AQUINO / JAN. 3 Hawaii economists say state tourism has yet to rebound to pre-pandemic levels and will continue to struggle in the ripple effect of the Trump administration's tariffs. Beachgoers relax at Waikiki Beach. JAMM AQUINO / JAN. 3 Hawaii economists say state tourism has yet to rebound to pre-pandemic levels and will continue to struggle in the ripple effect of the Trump administration's tariffs. Beachgoers relax at Waikiki Beach. Hawaii's economy is in store for reduced growth due to indirect impacts on tourism from President Donald Trump's global tariffs, according to two local economists. Eugene Tian, chief economist at the state Department of Business, Economic Development and Tourism, said that recently lowered economic growth projections for places where most Hawaii visitors come from portend a weakening of the local tourism industry rebound that has yet to reach pre-pandemic levels. Also, projections for more unfavorable changes to exchange rates along with higher U.S. inflation and lower U.S. household spending are expected to have dampening effects on Hawaii tourism, said Tian, who cited projections from an April 10 Blue Chip Economic Indicators survey of the top 50 economic forecasting organizations. This survey was done after Trump initially announced trade tariffs against the rest of the world on April 2 and then paused upper-level increases for 90 days on April 9 while boosting tariffs against China. Paul Brewbaker of TZ Economics said the amount of uncertainty with tariffs, and their impacts, is so high that he refers to April 2 as 'Obliviation Day ' instead of 'Liberation Day ' as declared by Trump. 'Basically, everything changes every day, ' he said. 'The uncertainty is just killing us.' Don 't miss out on what 's happening ! Stay in touch with breaking news, as it happens, conveniently in your email inbox. It 's FREE ! Email 28141 Sign Up By clicking to sign up, you agree to Star-Advertiser 's and Google 's and. This form is protected by reCAPTCHA. Tian and Brewbaker spoke during a Tuesday webinar presented by the Hawaii Economic Association. DBEDT's last forecast for Hawaii's economy was published in March, and it projected 1.7 % growth this year. But Tian cited pessimism for economic growth this year around the world based on the Blue Chip Economic Indicators survey done April 10 compared with a previous survey in March. For U.S. growth the projection fell to 1.4 % in the recent survey from 2 % earlier. Projections also slipped for other countries, including Canada (1.3 % from 1.7 %), Japan (1 % from 1.2 %) and South Korea (1.3 % from 1.6 %). 'A lot of countries will experience a decrease in economic growth, but the U.S. is the most, ' Tian said, noting that most visitors to Hawaii come from the mainland. One sliver of potential upside to Trump tariffs could be more demand from mainland markets for tropical crops grown in Hawaii if imports from foreign countries cost more. Brewbaker, however, said agriculture amounts to only about 0.5 % of Hawaii's economy. He also noted some crops have shipping restrictions. 'You can't even take mangoes to the mainland on an airplane, ' he said. Hawaii also isn't well positioned for much in the way of manufacturing, so if Trump's tariffs do lead to more U.S. manufacturing, then no material local benefit is expected. Other uncertainties loom from Trump policies focused on cutting federal jobs and spending, and what those impacts will end up being in Hawaii. Tian said he believes the state is in a good position to hire displaced federal workers because of an ongoing recruitment effort to fill many vacant state positions. 'That will mitigate the impact, ' he said. How much federal funding is cut off to Hawaii is highly uncertain. DBEDT's next forecast update for Hawaii's economy is slated for publication May 29. 'We are watching the developments and will see what will happen, ' Tian said. 'Maybe a month from now it will be reflected in our forecast.'
USA Today
14-04-2025
- Business
- USA Today
Economy will likely slow to near-standstill or recession despite Trump tariff pause: Survey
Hear this story Experts predict the economy will nearly stall in 2025, growing 0.8%, down from their projection of 1.7% just last month. The 46 economists surveyed by Wolters Kluwer Blue Chip Economic Indicators estimate a 47% chance of recession, up from 25% in February. 'We had a very solid economy at the beginning of the year,' Barclays economist Marc Giannoni said. "The tariffs are…weakening activity and weakening demand.' Forecasters have a bleak outlook on the U.S. economy because of President Donald Trump's escalating trade war even amid his 90-day pause of the highest tariffs on more than 50 countries − and they see the odds of a recession as a tossup. The experts predict the economy will nearly stall in 2025, growing 0.8%, down from their projection of 1.7% just last month, according to the average estimate of 46 economists surveyed by Wolters Kluwer Blue Chip Economic Indicators on April 4 and April 7. They reckon there's a 47% chance of recession, up from 25% in February. 'Even higher tariffs' The economy grew a healthy 2.8% last year. Need a break? Play the USA TODAY Daily Crossword Puzzle. The poll was conducted after Trump unveiled his reciprocal tariffs on dozens of countries on April 2 but before he announced a 90-day pause on duties as high as 50% on all nations other than China on April 9 and exemptions for many electronics products late Friday. Yet some of the surveyed economists interviewed in recent days noted that Trump at the same time raised the import fee on Chinese shipments to an outsize 145%, more than offsetting the economic benefits of the concessions. 'That adds up to even higher (total) tariffs,' said Barclays economist Marc Giannoni. The effective, or average, U.S. tariff, on all imports rose to 30%, up from 23% when Trump announced the reciprocal duties. Before the trade war, the average U.S. tariff rate was 2% to 3%. In yet another twist, late Friday, the Trump administration announced exemptions for smartphones, computers, chips and other electronics products. That, Giannoni said, would lower the effective tariff rate back to 23% and "should reduce the negative effects on activity and inflation," but wouldn't significantly change Barclays' projection for a recession later this year. Commerce Secretary Howard Lutnick told ABC News on April 13 the carevouts for the electronics products is temporary and tariffs for those items would be included in a duty on computer chips that Trump plans to impose in a month or two. That would further mitigate any economic benefit from the exemptions. Paying for the tariffs: What Trump's 90-day tariff pause means for your wallet A separate survey of 31 experts this week – 21 of whom responded the day Trump announced the 90-day pause – reveals a similarly dour view, according to the poll by the National Association of Business Economics. They expect the economy to grow just 0.7% this year. The average tariff rate should gradually fall to about 20% this year and 15% in 2026 as companies import fewer Chinese goods because of the high fees and increasingly source their products from other countries, Giannoni said. Still, he expects overall inflation to rise from 2.4% in March to 3.4% by the end of the year, based on the Consumer Price Index. Is the US economy declining? Forecasters say the economy was likely to slow this year after a post-pandemic burst of activity but consumers were in generally good shape, with low debt and wage growth that was still outpacing inflation. The tariffs, however, are expected to drive up prices as manufacturers and retailers pass along much of the fees to consumers. That's likely to sap their spending power, which makes up about 70% of economic activity. 'We had a very solid economy at the beginning of the year,' Giannoni said. "The tariffs are…weakening activity and weakening demand.' 'It's a massive shock,' said Nationwide Chief Economist Kathy Bostjancic, who expects the economy to grow 1% this year and believes the question of whether the nation tips into recession is a borderline call. Is a US recession coming? Giannoni figures the nation will experience a mild recession the second half of the year, with gross domestic product falling 1.5%, net job losses of less than 100,000 and the 4.2% unemployment rate peaking at 4.7%. Besides the hit to consumer spending broadly, Bostjancic said the turmoil in the stock market has reduced the wealth of high-income Americans who have accounted for the lion's share of consumption, causing those households to spend less. She also expects the Trump administration's substantial layoffs to deliver another blow to the economy. Consumer sentiment this month fell to the lowest level since June 2022 and Americans' inflation expectations a year from now rose to 6.7%, the highest since 1981, according to a survey by the University if Michigan. Economists expect consumer spending to increase 0.9% this year, down from 2.8% in 2024, according to the Wolters Kluwer poll. Is business investment increasing? And while the 90-day pause on many tariffs grants a reprieve to many countries as well as consumers, 'The disruption we are seeing and the uncertainty we are seeing is already bad for growth,' Giannoni said. 'The 90-day pause is extending the uncertainty.' Business investment is projected to grow about 1.2% this year, down from 3.6% in 2024, according to the Wolters Kluwer survey. Which tariffs have gone into effect? Trump's reciprocal tariffs, theoretically aimed at matching the fees other countries charge for U.S. shipments to their countries, included a minimum 10% fee and additional charges of up to 50% on more than 50 nations. Those took effect Wednesday. The president already had imposed a 20% fee on China; 25% on imported steel and aluminum; 25% on all imported cars and light trucks; and 25% on some goods from Canada and Mexico not covered by a trade agreement.
Yahoo
14-04-2025
- Business
- Yahoo
Economy will likely slow to near-standstill or recession despite Trump tariff pause: Survey
Forecasters have a bleak outlook on the U.S. economy because of President Donald Trump's escalating trade war even amid his 90-day pause of the highest tariffs on more than 50 countries − and they see the odds of a recession as a tossup. The experts predict the economy will nearly stall in 2025, growing 0.8%, down from their projection of 1.7% just last month, according to the average estimate of 46 economists surveyed by Wolters Kluwer Blue Chip Economic Indicators on April 4 and April 7. They reckon there's a 47% chance of recession, up from 25% in February. More: Trump smartphone tariff pause is temporary − measures 'coming soon,' Lutnick says The economy grew a healthy 2.8% last year. The poll was conducted after Trump unveiled his reciprocal tariffs on dozens of countries on April 2 but before he announced a 90-day pause on duties as high as 50% on all nations other than China on April 9 and exemptions for many electronics products late Friday. More: Trump's approval rating falls as 59% say the economy's in bad shape: Poll Yet some of the surveyed economists interviewed in recent days noted that Trump at the same time raised the import fee on Chinese shipments to an outsize 145%, more than offsetting the economic benefits of the concessions. 'That adds up to even higher (total) tariffs,' said Barclays economist Marc Giannoni. The effective, or average, U.S. tariff, on all imports rose to 30%, up from 23% when Trump announced the reciprocal duties. Before the trade war, the average U.S. tariff rate was 2% to 3%. In yet another twist, late Friday, the Trump administration announced exemptions for smartphones, computers, chips and other electronics products. That, Giannoni said, would lower the effective tariff rate back to 23% and "should reduce the negative effects on activity and inflation," but wouldn't significantly change Barclays' projection for a recession later this year. Commerce Secretary Howard Lutnick told ABC News on April 13 the carevouts for the electronics products is temporary and tariffs for those items would be included in a duty on computer chips that Trump plans to impose in a month or two. That would further mitigate any economic benefit from the exemptions. Paying for the tariffs: What Trump's 90-day tariff pause means for your wallet A separate survey of 31 experts this week – 21 of whom responded the day Trump announced the 90-day pause – reveals a similarly dour view, according to the poll by the National Association of Business Economics. They expect the economy to grow just 0.7% this year. The average tariff rate should gradually fall to about 20% this year and 15% in 2026 as companies import fewer Chinese goods because of the high fees and increasingly source their products from other countries, Giannoni said. Still, he expects overall inflation to rise from 2.4% in March to 3.4% by the end of the year, based on the Consumer Price Index. Forecasters say the economy was likely to slow this year after a post-pandemic burst of activity but consumers were in generally good shape, with low debt and wage growth that was still outpacing inflation. The tariffs, however, are expected to drive up prices as manufacturers and retailers pass along much of the fees to consumers. That's likely to sap their spending power, which makes up about 70% of economic activity. More: President Trump exempts smartphones, computers, microchips from new tariffs 'We had a very solid economy at the beginning of the year,' Giannoni said. "The tariffs are…weakening activity and weakening demand.' 'It's a massive shock,' said Nationwide Chief Economist Kathy Bostjancic, who expects the economy to grow 1% this year and believes the question of whether the nation tips into recession is a borderline call. Giannoni figures the nation will experience a mild recession the second half of the year, with gross domestic product falling 1.5%, net job losses of less than 100,000 and the 4.2% unemployment rate peaking at 4.7%. Besides the hit to consumer spending broadly, Bostjancic said the turmoil in the stock market has reduced the wealth of high-income Americans who have accounted for the lion's share of consumption, causing those households to spend less. She also expects the Trump administration's substantial layoffs to deliver another blow to the economy. Consumer sentiment this month fell to the lowest level since June 2022 and Americans' inflation expectations a year from now rose to 6.7%, the highest since 1981, according to a survey by the University if Michigan. Economists expect consumer spending to increase 0.9% this year, down from 2.8% in 2024, according to the Wolters Kluwer poll. And while the 90-day pause on many tariffs grants a reprieve to many countries as well as consumers, 'The disruption we are seeing and the uncertainty we are seeing is already bad for growth,' Giannoni said. 'The 90-day pause is extending the uncertainty.' Business investment is projected to grow about 1.2% this year, down from 3.6% in 2024, according to the Wolters Kluwer survey. Trump's reciprocal tariffs, theoretically aimed at matching the fees other countries charge for U.S. shipments to their countries, included a minimum 10% fee and additional charges of up to 50% on more than 50 nations. Those took effect Wednesday. The president already had imposed a 20% fee on China; 25% on imported steel and aluminum; 25% on all imported cars and light trucks; and 25% on some goods from Canada and Mexico not covered by a trade agreement. This article originally appeared on USA TODAY: Economists predict weak growth or US recession from Trump tariffs Sign in to access your portfolio
