Legal Developments

To confront the economic downturn, Congress and the President have signed into law 4 phases of aid to small businesses and agencies to support infrastructure and other spending to ebb the unemployment crisis.  Interest rates are at record lows, with Fed funds near zero and the 10 year close to .60%.  Tax reform has been part of the aid to the economy, businesses, and individuals, with Congress relieving taxpayers of filing and payment responsibilities until July 15 and waiving certain loss and retirement plan rules.  In the context of this crisis, the market volatility and low interest rates provides a favorable environment for advanced estate tax reduction planning.

Economic Observations

The five-week total of those filing for unemployment during the coronavirus pandemic recently hi 26.5 million, in the steepest downturn for the U.S. labor market since the Great Depression. Initial jobless claims of 4.43 million in the week ended April 18 followed a slightly downwardly revised 5.24 million in the prior week. The median estimate of economists was for 4.5 million claims. Assuming all who filed for benefits are counted as unemployed, the latest figures suggest an April jobless rate of potentially around 20%. That’s double the 10% peak reached in the wake of the global financial crisis in 2009. Most states continued to see initial claims decline on an unadjusted basis, a sign that layoffs could be slowing. Equity markets experienced the sharpest declines and rebounds in history, with volatility persisting.