Fed announces another $2.3 trillion aid as weekly jobless claims again top 6 million
On Thursday, the Federal Reserve announced that they will provide up to $2.3 trillion of additional aid to deal with the novel coronavirus pandemic. The funds will go to small and medium-sized businesses as well as state and local governments.
“Our country’s highest priority must be to address this public health crisis, providing care for the ill and limiting the further spread of the virus,” Fed Chair Jerome Powell said in a statement. “The Fed’s role is to provide as much relief and stability as we can during this period of constrained economic activity, and our actions today will help ensure that the eventual recovery is as vigorous as possible.”
The Federal Reserve will directly purchase short-term notes from states as well as from large counties and cities worth as much as $500 billion. It will also offer as much as $600 billion to "Main Street" businesses, provide supplemental funding for the Paycheck Protection Program, and expand its corporate bond purchases by another $850 billion.
The announcement comes just as the Labor Department released jobless claims data showing over 6 million Americans filed for unemployment benefits for the third straight week, bringing the total to nearly 17 million jobless claims during the pandemic shutdown.
Workers have been laid off across industries as Americans struggle to file claims over busy phone lines and crashing websites. The 17 million claims implies an unemployment rate of about 13%, surpassing the unemployment peak of the 2008 recession, and many forecasters believe that the number of unemployment claims will continue to trend in the millions.
California had 925,000 jobless claims last week, the most in the country, followed by Georgia, Michigan, New York, and Texas with 388,000, 385,000, 345,000, and 314,000 respectively.