Government loans helped save millions of jobs, but the money is running out for many

The surprising jobs rebound in May, which fueled hopes for a fast recovery from the pandemic recession, was almost certainly due in large part to tens of billions of dollars of forgivable government loans to small businesses. And that’s a little bit scary.” As of June 12, almost 4.6 million businesses had received PPP loans totaling more than $512 billion, according to the Small Business Administration, which is running the program. The PPP is a big “wild card” for the labor market, said Bernard Yaros, an economist at Moody’s Analytics. And although most of that huge employment shortfall is thought to be in the form of furloughs — close to 80% of workers are expecting to be recalled — Federal Reserve Chairman Jerome H. Powell noted last week that there could be “well into the millions of people who don’t get to go back to their old job.” Yaros estimated that the PPP has safeguarded about 16 million jobs so far. Still, the vast majority of 30 million small businesses in the U.S. haven’t gotten PPP loans, some probably deterred by bureaucratic hassles and other barriers.