Thank you to the member companies from the Wyoming Valley and the “Diamond City.” Your workers, your families, and your communities are the lifeblood of our nation. It is also a special pleasure to have Congressman Dan Meuser join us today. I am pleased to be in the city that gave us the scriptwriter of “Citizen Kane”; the renowned quantum physicist David Bohm; and the founder of Planters Peanuts.
It is extremely gratifying to see that Governor Wolf is authorizing tomorrow’s “Green Phase” of reopening your region’s economy. It is essential that we safely and carefully reopen before there is any further economic damage. The Chamber’s “Respond, Return, and Re-Imagine” recovery plan shows how important it is to have an organization like yours connecting local companies to national assets to help them through this crisis.
Thank you, especially, to all of the manufacturers that shifted your production lines to produce life-saving medical protective equipment. It was, and is, a display of the agility and ingenuity of our private sector to respond to radical changes in markets. And, it proves that our industries are able to quickly fill gaps in supply chains as companies re-shore production from overseas factories.
I have many fond memories of this region of Pennsylvania. When I was involved with the steel industry here, I brought LTV Steel out of bankruptcy, and then ─ 70 miles away ─ added Bethlehem Steel and others to the International Steel Group. As its Chairman, and working with the Steelworkers Union and other stakeholders, we helped resuscitate an industry that continues to be essential for our country’s economic and national security.
We did so again recently when President Trump courageously imposed Section 232 tariffs on imports of underpriced and subsidized foreign steel that was being illegally dumped into the U.S. market. We understand the importance of our basic industries and our often-maligned coal industry, and we will always stand up for the great jobs the manufacturing sector provides Americans, along with this region’s retail, restaurant, and hospitality industries.
Before COVID-19, Luzerne County had an unemployment rate of 4.7 percent. Unfortunately, the coronavirus and lockdowns have really impacted companies and workers. The latest data indicates that the unemployment rate in the county increased to 18.4 percent in April, which is higher than the Pennsylvania rate of 15.5 percent, and the national rate of 14.4 percent. Prior to COVID, both the Wilkes-Barre region and Pennsylvania were exporting powerhouses. While Pennsylvania ranked an impressive 10th among our 50 states for exports, at $42.7 billion last year, the Wilkes-Barre region alone exported $1.73 billion worth of manufactured goods. The majority of Pennsylvania’s exports are to Canada and Mexico, which bodes well for the future, since the USMCA is set to take effect on July 1. Due to the high quality of life, the diversity of your population, and affordable housing, this area has been an attractive place for foreign direct investment. Over the last five years, there has been $6.6 billion of foreign direct investment in 204 greenfield projects in Pennsylvania. Those new facilities employ 14,300 workers.
Last year, the state set a record in the number of new FDI projects. I believe companies will continue to locate in your region after COVID due to your devotion to attracting new investment, and because production and distribution need to be closer to customers. Companies are also seeking partnerships with institutions that are able to train the next generation of workers. Certainly, this area is blessed with many universities, more than 50,000 college students, a skilled workforce, business incubators, and access to the natural gas being produced in the nearby Marcellus Shale fields. Having these assets bodes well for long-term growth. Pennsylvania should also continue to attract investment due to the benefits associated with its 302 Opportunity Zones.
Since the lockdowns in March, American families have been yearning for good economic news, and in the past two weeks, we have, thankfully, seen clear indications of a strong economic revival. The Department of Labor reported today that workers filed 1.5 million new unemployment claims last week and 20.5 million people received benefits, signs that while the pace of layoffs remains high, they are stabilizing. New applications for benefits edged lower by 58,000 last week and fell by 62,000 the week before, indicating a substantial swing in the right direction. Even better news is that on Tuesday, the Census Bureau reported that U.S. retail sales rose by a record 17.7 percent in May, far higher than the 8 percent economists had projected in a survey by Dow Jones. The previous monthly high was in October 2001, the month after 9/11, when retail sales rose by 6.1 percent. Sales of clothing and accessories jumped by 188 percent, from $2.7 billion in April, to $8.4 billion in May. Auto sales were up 44 percent, from $70 billion in April to $105 billion in May. And some retail sectors never slumped during the lockdown.
Americans were busy investing in their homes and properties, with sales of building materials and garden supplies in May having far outpaced sales during the same month in 2019. Online retailers have seen sales increase tremendously during the pandemic. This May, they sold $83 billion worth of goods, up from $66 billion for the same month a year ago. Such a surge has helped keep the many distributions, logistics, and transportation companies in this area extremely busy.
The good news is that consumer spending should continue increasing over the coming months because Americans have $400 billion more in their bank accounts today than they did prior to the pandemic. As enterprises reopen, that money is being reinvested back into local economies, and furloughed workers will be rehired. Our government also took a far different approach to the current crisis than during the 2008 financial sector collapse. The Paycheck Protection Program under the CARES Act provided $852 billion in loans to 6.1 million companies with fewer than 500 employees.
In Pennsylvania, there have been 158,720 CARES Act loans with a net amount of $20.5 billion. This major program ─ along with additional weekly COVID-19 unemployment benefits, and actions taken by the Federal Reserve Board ─ provided an unprecedented investment in the American economy. Importantly, most of the federal government's funding has gone straight into the pocketbooks of everyday Americans. This is fundamentally different from 2009 when the relief went to plug structural flaws on Wall Street and mismanaged State Capitols. Finally, the U.S. economy was much stronger going into the current health-related lockdown, with rising wages, and a shortage of workers. There were 6.5 million available jobs and 5 million people unemployed, a gap of 1.5 million more open jobs than people to fill them.
Once the all-clear sounds on the coronavirus, there will be an incredible pent-up demand in the travel and hospitality sector. Our airports will be filled with Americans anxious to visit families and take vacations. Business travelers will head to long-delayed meetings and conventions. Our restaurants and retail establishments will reopen. We are all eager for the end of this pandemic.
Finally, before I take your questions, I must make a request of you: It is essential for everyone in this city and this region to fill out their Census surveys. To date, Wilkes-Barre’s response rate is 51 percent, while Scranton’s is 55.7 percent. Both are below the national average of 61 percent. So much depends on having a complete count, including the allocation of billions of dollars in federal funds, and representation in the Congress. An undercount will be extremely costly for the cities and counties in Northeast Pennsylvania for the next decade. I encourage all of you to engage with your workers, your community organizations, and your local governments to stress the importance of going online and filling out the form. It’s very fast, and the personal data will not be disclosed to be anyone.
Now I am eager to hear your ideas on how we can work together to re-shore our industries, generate thousands of good jobs, revitalize our communities, and create an economy that is resilient and can withstand any future shock.
Thank you, and I look forward to your comments and questions.