Morning Business Memo:
Unemployment checks will run out this summer for many people who’ve been hit the hardest by the recession: the long term unemployed. More than 100,000 people are expected to lose their jobless benefits this summer. The federal extension of unemployment checks is a hot issue. Some states have cut initial benefits to fewer than 26 weeks, and others limited eligibility. Many Republicans say long-term benefits discourage the long-term unemployed from seeking work, while Democrats argue that many people have faced extreme difficulty finding employment in a weak labor market. Cutting people from benefits lowers the official unemployment rate. Only those who are officially seeking work are counted by the government.
Spain’s economic woes are getting even worse. Retail sales in April plunged nearly 10 percent compared with last year. The unemployment rate is more than 25 percent, and much higher among young people. Spain’s conservative government has introduced harsh austerity measures — including spending cuts on health and education — in an attempt to control the level of its debt relative to the size of its economy. Bankia, Spain’s fourth largest bank, announced late last week it would need an additional $24 billion to stay afloat. Spanish banks are heavily exposed to the fallout from the real estate bust.
More people in Europe have their doubts about the single currency. A new survey across five eurozone nations finds a large number of people think the euro is more damaging than beneficial. The findings come from a Pew survey. Four new opinion polls indicate growing support in Greece for parties that support the bailout program and austerity plans. The Greek election, scheduled for June 17, is being seen as a referendum on the euro.
Federal investigators are said to be looking into whether BP representatives lied to Congress about how much oil was leaking into the Gulf of Mexico after the Deepwater Horizon disaster in 2010. The Wall Street Journal says investigators are exploring whether engineers working to seal the well tried to withhold data from the government.