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Some of the strength in the U.S. payrolls report for May — which included a startling 225,000 manufacturing jobs added — was the result of companies taking part in the Paycheck Protection Program. The problem now is that demand in many industrial sectors, from oil and gas to construction equipment, remains depressed, and that underscores the subdued response key policymakers such as Federal Reserve Chair Jerome Powell have shown over the big upsurge in hiring in May, Reuters reported. “It is a long road. It is going to take some time,” Powell said on Wednesday, cautioning that while encouraging, the surprise 2.5 million jump in jobs in May remains a single data point for now. Data yesterday showed more than 20 million people remain on unemployment benefits even as new claims fell for a 10th straight week. Chad Moutray, chief economist at the National Association of Manufacturers, said that he thinks the worst of the downturn is behind us, but that demand will remain weak as companies fret about the potential for another virus surge and the political uncertainty of an election year. “I don’t see us getting back to pre-recession levels of output until 2022,” he said. He notes that while manufacturers added an impressive number of jobs for a single month in May, the sector is still down 1.1 million jobs from its pre-crisis level in February.

State and federal investigators are scrambling to stop scammers from stealing millions of dollars in unemployment benefits, imposing a raft of new restrictions that have inadvertently deprived some out-of-work Americans from receiving much-needed payments for weeks, the Washington Post reported. The broad, national crackdowns began in May, following reports that organized criminals had set their sights on local labor agencies at a moment when they’re trying to manage the worst economic crisis since the Great Depression. States including Maine, Michigan, Pennsylvania and Washington each have reviewed scores of past applications, while halting some current unemployment payments, hoping to thwart fraudsters before they could sap any more funds. The aggressive actions have helped some of these states identify tens of thousands of suspicious claims filed by alleged criminals, many of whom had relied on personal information stolen from unsuspecting workers to obtain benefits they were not eligible to receive. But these states’ aggressive interventions have also swept up many people who have nothing to do with the scams. Some out-of-work Americans who had properly filed for help — and weathered long delays to obtain checks in the first place — have been baffled and frustrated to find their benefits are now unexpectedly paused. “They said benefits would only be stopped for a few days, but it’s been weeks,” lamented John Tirpak, executive director of the Unemployment Law Project.

The hospitals serving New York City’s neediest and most vulnerable patients face a financial reckoning as a result of the new coronavirus outbreak and uncertain stimulus funding from Washington, D.C., officials at the institutions say, the Wall Street Journal reported. New York City’s Health + Hospitals system is running with about 18 days of cash on hand, officials say. The 11-hospital system will go lean on cash in June and July if more federal funding doesn’t begin to flow, including from the Federal Emergency Management Agency. Officials say they are holding off decisions on internal cuts or layoffs until they have a stronger sense whether more federal funding is in store. Typically, Health + Hospitals operates with a 1 percent margin, officials said. Revenue losses have been roughly $20 million a week since the outbreak began in March, but officials are hopeful they will rebound as the institutions resume elective surgeries and ambulatory care.

Federal officials responsible for spending $660 billion in taxpayer-backed small-business assistance said on Wednesday that they will not disclose amounts or recipients of subsidized loans, backtracking on an earlier commitment to release individual loan data, the Washington Post reported. The Small Business Administration has previously released detailed loan information dating to 1991 for the federal 7(a) program, a long-standing small-business loan program on which the larger Paycheck Protection Program is based. The SBA initially intended to publish similar information for the new coronavirus-related loans. An SBA spokesman told the Post on April 16 email that the agency “intend[s] to post individual loan data in accordance with the information presently on the SBA.gov website after the loan process has been completed,” and it made a similar commitment in response to an April 17 open records request. But the administration appeared to change course at a hearing Wednesday before the Senate Committee on Small Business and Entrepreneurship, as Treasury Secretary Steven Mnuchin and SBA Administrator Jovita Carranza declined to discuss specific borrowers. “As it relates to the names and amounts of specific PPP loans, we believe that that’s proprietary information, and in many cases for sole proprietors and small businesses, it is confidential information,” Mnuchin said in the hearing. “The reason why we’re not disclosing the names and amounts, unlike in the 7(a) program, is because of that issue.”

Treasury Secretary Steven Mnuchin yesterday offered a preview of the Trump administration's priorities for the next coronavirus emergency relief bill, including willingness to consider a new round of emergency loans for small businesses, The Hill reported. Speaking at a Senate Small Business Committee hearing, Mnuchin discussed the prospects for more Paycheck Protection Program (PPP) loans for small businesses and revamping recent changes to unemployment insurance. The secretary's appearance comes as congressional Republicans pump the brakes on another Covid-19 relief package. GOP lawmakers have raised concerns about rising deficits and argued that Congress should wait and see the effects of almost $3 trillion in previous aid.

In April, when the federal government offered $349 billion in loans to small businesses reeling from government shutdown orders in the pandemic, the funding ran out in just 13 days, prompting Congress to swiftly approve a second round of $310 billion. Small businesses have since grown more wary of taking the money, the New York Times reported. As of Tuesday, more than $130 billion was left in the fund, known as the Paycheck Protection Program. Even more striking was the fact that on many days last month, more money was being returned than borrowed, according to data from the Small Business Administration, which is overseeing the program — highlighting its uneven execution and confusing rules that deterred some small businesses from using the money. Thousands of companies that got loans have sent the money back, according to lenders. For some owners, the program’s terms were too restrictive; for others, the criteria for loan forgiveness was too murky. Some public companies that received these loans returned them after a public outcry, and in the initial rush, some borrowers accidentally got duplicate loans that they, too, returned. A total of around $12 billion was returned, Treasury Secretary Steven Mnuchin said at a Senate hearing on Wednesday. The amount of loans outstanding under the program dropped to $510.2 billion at the end of May, from $513.3 billion in the middle of the month, according to data from the Small Business Administration.

The head of the Federal Reserve yesterday offered a grim assessment of how quickly the U.S. economy will recover from its pandemic-induced recession, suggesting that millions of people could remain out of work for an extended period as central bank officials estimated unemployment will be at 9.3 percent by the end of 2020, the New York Times reported. The Fed chair, Jerome H. Powell, said the labor market might have “hit bottom” after recording a 14.7 percent unemployment rate in April, but made clear that it was too soon to know for certain. “This is the biggest economic shock, in the U.S. and the world, really, in living memory,” Powell said after the Fed’s two-day policy meeting, during which it left rates unchanged. “We went from the lowest level of unemployment in 50 years to the highest level in close to 90 years, and we did it in two months.” Powell did not suggest a rapid return to the type of economic growth and low joblessness that defined the 11-year expansion, even as states allow restaurants, offices and salons to reopen. Instead, he said, “there is great uncertainty” about the future given unknowns about the coronavirus and whether people will feel comfortable resuming their previous day-to-day activities absent a vaccine. The Fed will do “whatever we can, and for as long as it takes,” to support the recovery, he said, including buying large quantities of bonds and leaving interest rates near zero for a long time. His central bank colleagues projected no increase to borrowing costs through at least 2022, and Powell said the Fed was “not even thinking about thinking about raising rates.”

Delta Air Lines Inc. said it plans to seek concessions from lenders to avoid a debt default stemming from the coronavirus pandemic’s impact on air travel, WSJ Pro Bankruptcy reported. The Atlanta-based carrier said yesterday that by early next year it expects to be out of compliance with certain credit requirements due to the plunge in demand for passenger flights. Certain of Delta’s loans also include collateral requirements tied to the value of aircraft fleet and other assets. Delta said that it would seek to renegotiate terms with its lenders and expects to obtain amendments, but acknowledged it could end up in debt default if such discussions aren’t successful. Lenders and bondholders after a default could demand immediate repayment and potentially repossess collateral, Delta said. Delta carried a total debt load of almost $16 billion as of the end of March. At the time, the company had $6 billion of cash and cash equivalents on its balance sheet. The company yesterday said that it expects revenue in the second quarter to decline 90 percent year-over-year, with capacity down 85 percent compared with last year’s level due to demand disruptions from the pandemic.

Men’s Wearhouse owner Tailored Brands Inc. said yesterday that it may have to seek bankruptcy protection or discontinue operations, if the Covid-19 crisis continues to pummel sales, Reuters reported. The retailer said it has taken “decisive actions to manage liquidity”, including borrowing money, while opening nearly half of its stores across the U.S. and Canada. The pandemic has added to Tailored Brands’ woes, as it had already been struggling with competition from fast-fashion brands and a shift to online shopping. As of May 2, the company had long-term debt of $1.4 billion and $244.2 million of cash and cash equivalents. First-quarter net sales for the retailer, which also owns men’s clothing store Jos. A. Bank, plunged 60.4 percent as stores were closed due to coronavirus-led nationwide lockdowns.