Tag: Economic

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Business

Walmart prospects do not count on a speedy financial restoration, prime exec says

Walmart customers don't expect a speedy economic recovery, top exec says

Shoppers wear masks while shopping at a Walmart store in Bradford, Pennsylvania on July 20, 2020.

Brendan McDermid | Reuters

Janey Whiteside, Walmart’s chief customer officer, said Tuesday that many of its shoppers don’t expect the economy to recover quickly from the coronavirus pandemic.

Nearly half of customers surveyed in November said Walmart were concerned about the current health of the economy, she said at the National Retail Federation’s virtual conference. She said 40% said they did not expect a “quick recovery”.

“Our main Walmart customer is absolutely not immune to the economic slowdown, and may even be disproportionately affected,” she said, noting that the pandemic has divided society as it has not hit some industries such as hospitality and others.

Walmart’s sales and earnings have increased during the pandemic as customers turned to its 4,700+ U.S. stores and website for groceries, hair colors, puzzles, and more. Revenue from the same store rose 6.4% and US ecommerce sales rose 79% year over year for the third quarter ended October 31. The company has yet to report its fourth quarter results, including Christmas shopping, of the season.

However, according to Whiteside, the company finds that customers are feeling financially troubled trying to put groceries on the table and juggle other expenses such as school supplies for their children. She said, “Taking care of this group of customers who need us more than ever is the fuel that keeps Walmart going.”

“We know they continue to look for ways to save money on basic items. Whether you’re moving from a national brand to a private brand, look for small pack sizes and cherry picking deals when they’re available.” said she said. “We also know that they continue to make sure they don’t have to forego experiences for their families, so take a look at where to balance the wallet.”

On Monday, Walmart announced that it had created a fintech start-up with the venture capital firm Ribbit Capital. It didn’t say what services it could launch, but said they’ll be affordable. Walmart already offers some financial products like prepaid debit cards for customers with bad credit or no relationship with a bank.

Walmart’s plan to open health clinics is also geared towards affordability. The clinics offer lower prices that are listed in advance and can be paid out of pocket, e.g. E.g. $ 30 for an annual examination or $ 45 for a consultation session.

“In these times when everyone has so much on their minds, we also know that saving time and relieving the cognitive burden on people is also important,” said Whiteside.

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World News

Iraq, Struggling to Pay Money owed and Salaries, Plunges Into Financial Disaster

Iraq, Struggling to Pay Debts and Salaries, Plunges Into Economic Crisis

BAGDAD – Ahmed Khalaf sells the smallest luxuries in a stall on a narrow, winding alley of Baghdad’s oldest market: nail polish, plastic hair clips, colored pencils.

Even during the pandemic, the stalls in the Shorja market were usually overcrowded with shoppers buying basic groceries and housewares by mid-morning. But last week the hallways were almost empty.

“Our customers are mostly government employees, but as you can see they don’t come,” said Khalaf, 34.

Its problems are an indicator of what economists say is the greatest financial threat to Iraq since Saddam Hussein’s time. Put simply, Iraq is running out of money to pay its bills and threats the country on several fronts.

The financial crisis has the potential to destabilize the government, which was overthrown a year ago after mass protests against corruption and unemployment, spark fighting between armed groups and strengthen Iraqi neighbors and longstanding rivals Iran.

Iran has in the past used the opportunity of a weak Iraqi central government to strengthen its political power and the role of its paramilitaries in Iraq.

With the economy ravaged by the pandemic and falling oil and gas prices, which account for 90 percent of government revenue, Iraq was unable to pay government employees for months last year.

Last month, Iraq devalued its currency, the dinar, for the first time in decades, and immediately raised prices for almost everything in a country that is heavily dependent on imports. And last week, Iran cut Iraq’s electricity and natural gas supplies, citing the non-payment, and left large parts of the country in the dark for hours.

“I think it’s bad,” said Ahmed Tabaqchali, an investment banker and senior fellow at the Iraqi Institute for Regional and International Studies. “The expenditures are well above Iraq’s income.”

Many Iraqis fear that there will be further devaluations despite the rejection by the Iraqi government.

“Everyone is afraid to buy or sell,” said Mr. Khalaf, who turned to business when he couldn’t find a job with a degree in sociology.

In the Jamila wholesale market, near Baghdad’s sprawling Sadr City district, 56-year-old Hassan al-Mozani was surrounded by huge piles of unsold 110-pound sacks of flour.

He imports flour from Turkey in dollars and sells flour for around $ 22 a sack, but last week he raised the price to $ 30.

“I would normally sell at least 700 to 1,000 tons a month,” he said. “But we’ve only sold 170 to 200 tons since the beginning of the crisis.”

A restaurant manager, Karam Muhammad, when asked about the new flour price, said there wasn’t much demand for it. The restaurants were mostly empty because of the pandemic and the financial crisis.

While the currency devaluation surprised most Iraqis, the economic and financial crisis had been raging for years.

Public sector salaries and pensions cost the government about $ 5 billion a month, but monthly oil revenues have only hit about $ 3.5 billion recently. Iraq has made up the deficit by burning its reserves, which some economists believe is already insufficient.

The International Monetary Fund concluded in December that the country’s economy is expected to shrink by 11 percent in 2020. He called on Iraq to improve governance and reduce corruption.

For 18 years, oil revenues have propped up a system of government support by giving ministries to political groups that have almost a free hand to create jobs. The civil service in Iraq has tripled since 2004. Economists estimate that more than 40 percent of the workforce depends on government salaries and contracts.

The financial crisis could slow down this corruption-ridden patronage system.

“Every government has managed to buy more and more, but the purchase of loyalty, the purchase of consent is over,” said Tabaqchali over the phone from London.

Updated

Jan. 4, 2021, 11:27 p.m. ET

The high public wage bill has left little expenditure on infrastructure. The Iraqi economy has also been hit by the coronavirus pandemic, and many workers in the already weak private sector have lost their jobs.

Mr Tabaqchali and other economists said the devaluation is a difficult but necessary step to help Iraqi businesses. With rising import costs, Iraqi goods such as agricultural products can compete more easily.

Iraq’s limited ability to pay Iran for electricity and natural gas contributed to the misery. Iraq is not allowed to transfer cash to Iran, but sends food and medicines in exchange for natural gas and electricity. Iran says it owes the equivalent of more than $ 5 billion.

“Iraq cannot pay all of its debt to Iran,” said Abdul Hussein al-Anbaki, an economic advisor to Prime Minister Mustafa al-Kadhimi. “Iran is also facing an economic crisis and we cannot buy gasoline without paying for it.”

Part of Iraq’s debt has been caused by its insolvency, but the lion’s share of about $ 3 billion remains frozen in an Iraqi bank while Iraq struggles to meet US sanctions on Iran, Iraqi officials said.

The sanctions, aimed at forcing Iran to accept stricter restrictions on its nuclear program and curb its support for foreign militias, have blacklisted its banking system.

“It is difficult for the Iraqis because the mechanism to pay them almost doesn’t exist, because the Americans are obviously watching the situation very closely,” said Farhad Alaaldin, chairman of the Iraq Advisory Council, an institute for political research.

Mr Alaaldin and others said the financial crisis could spark renewed protests and fighting between armed groups to control Iraq’s increasingly limited resources.

The fact that Iraq, one of the largest oil producers in the world, cannot reliably supply its citizens with electricity and has to import electricity is symptomatic of the dysfunction that led to protests against the government last year and overthrew the previous government.

Iraq’s energy infrastructure has suffered from three devastating wars that destroyed refineries and power plants since the 1980s. But since the American-led invasion of Iraq toppled Mr Hussein in 2003, corruption and incompetence have prevented the Iraqi government from fully restoring electricity.

Although Iraq is full of oil, most of its power plants run on natural gas. Iraq has enormous natural gas reserves, but has not invested much in developing it. And until the Trump administration imposed additional sanctions on Iran, importing electricity and gas from Iran was the simplest solution.

For the millions of Iraqis who cannot afford electricity from private generators, blackouts and rising prices have been a double blow.

Haifa Jadu, 55, who came to the Shorja market to buy sesame seeds and walnuts, said she and her husband, a retiree who is blind, simply went without electricity for much of the day.

“We used to pay money to a generator owner, but we haven’t bought electricity in four months because it raised the price,” she said. She said the walnuts, which she bought a month ago for about $ 3.50 a pound, are now nearly $ 5 and out of reach.

The government proposed comprehensive measures to strengthen the economy, including tax increases, in a plan before parliament. However, many politicians anticipate the prospect of oil prices rising this year to delay the adoption of much-needed reforms.

By then, unemployment is expected to rise as around 700,000 young people enter the labor market each year. With few jobs left, they are likely to join a permanent underclass of the poor and dispossessed.

Near the Shorja market, Amar Musa, wearing a black military-style mask and olive green coat, had put up artificial Christmas trees and tinsel garlands to sell to his Orthodox Christian customers on the busy main street that celebrates the January holidays to celebrate.

Mr Musa, 45, graduated from a technical college with a mechanic diploma, but said he never found work in his field. Standing next to a white Christmas tree with a deflated Mylar Santa impaled on its metal branches, he said he had a shop that was no longer in operation and that he now drives a taxi.

Like many Iraqis, he also writes poetry. When asked to recite one of his poems, he pulled a cigarette out of a packet, broke it, and threw it on the floor.

“I’m like a cigarette,” he said. “I’m on fire and like a bum I would be thrown away. Don’t talk to me about home. We are poor and our home is the grave. “

Falih Hassan contributed to the coverage.

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Business

One Vaccine Aspect Impact: World Financial Inequality

One Vaccine Side Effect: Global Economic Inequality

LONDON – The end of the pandemic is finally in sight. This also applies to the rescue from the most traumatic global economic catastrophe since the Great Depression. With the entry of Covid vaccines into the bloodstream, recovery has become a reality.

However, the benefits will not be evenly distributed by far. Wealthy nations in Europe and North America have secured the bulk of limited vaccine supplies and positioned themselves for greatly improved economic fortunes. Developing countries – home to most of the people – need to secure their own doses.

The unilateral distribution of vaccines seems to be worsening a defining economic reality: the world that emerges from this terrible chapter in history will be more unequal than ever. Poor countries continue to be ravaged by the pandemic, forcing them to divert meager resources already strained by growing debt to lenders in the US, Europe and China.

The global economy has long been divided by profound differences in wealth, education, and access to vital elements such as clean water, electricity, and the internet. The pandemic has trained the death and livelihood destruction of ethnic minority groups, women and lower-income households. The ending is likely to add another divide that could shape economic life for years, separating countries with access to vaccines from countries without vaccines.

“It is clear that developing countries, and poorer developing countries in particular, will be excluded for some time,” said Richard Kozul-Wright, Director of Globalization and Development Strategies at the United Nations Conference on Trade and Development in Geneva. “Despite the understanding that vaccines must be considered a global good, their supply remains largely under the control of large pharmaceutical companies in the advanced economies.”

International aid agencies, philanthropists and wealthy nations have come together on a pledge to ensure that all countries have the tools necessary to fight the pandemic, such as protective equipment for medical teams, as well as tests, therapeutics and vaccines. But they failed to back their pledges with enough money.

Leading initiative, the Act Accelerator Partnership – a World Health Organization company and the Bill and Melinda Gates Foundation – has secured less than $ 5 billion out of $ 38 billion.

A group of developing countries, led by India and South Africa, tried to increase the supply of vaccines by making their own vaccines, ideally in collaboration with the pharmaceutical companies that made the leading versions. To ensure leverage, the group has suggested that the World Trade Organization abandon traditional intellectual property protections to allow poor countries to produce affordable versions of the vaccines.

The W.TO. works by consensus. The proposal has been blocked by the United States, Britain and the European Union, where pharmaceutical companies exercise political influence. The industry argues that patent protection and the benefits it brings are a prerequisite for the innovation that creates life-saving drugs.

Proponents of patent suspension note that many blockbuster drugs are brought to market through government funded research, arguing that doing so is a need to put the social good at the center of politics.

“The question really is,” is this a time to profit? “Said Mustaqeem De Gama, Councilor for the South African Mission to the WTO in Geneva.” We have seen governments shut down economies and curtail freedoms, but intellectual property is seen as so sacrosanct that it cannot be touched. “

In the rich countries that have secured access to vaccines, the public health emergency is currently solving the economic disaster. The restrictions that closed businesses could be lifted and bring significant economic benefits as early as March or April.

At the moment the picture is bleak. The United States, the world’s largest economy, has suffered the equivalent of September 11 death daily, which makes a return to normal seem far away. Large economies like the UK, France and Germany are locked again as the virus continues to gain momentum.

After a decline of 4.2 percent this year, the world economy is expected to grow by 5.2 percent next year, according to Oxford Economics. That forecast assumes annual growth of 4.2 percent in the US and an expansion of 7.8 percent in China, the second largest economy in the world where government measures have controlled the virus.

According to IHS Markit, given the spread of the virus, Europe will lag behind as the continent’s economy does not return to its pre-crisis size for two years. An agreement signed Thursday between the UK and the European Union that will keep much of their trade ties in place after Brexit has allayed worst fears of a slowdown in regional trade.

According to Oxford Economics, the long-term economic damage from the pandemic in so-called emerging countries will be twice as high as in wealthy countries by 2025.

Such predictions are notoriously inaccurate. A year ago, no one predicted a catastrophic pandemic. The variables that the global economy is currently facing are particularly large.

The manufacture of vaccines is fraught with challenges that could limit supply while their endurance and effectiveness are not fully understood. The economic recovery will be shaped by psychological issues. After the deepest shock in memory, how will societies exercise their freedom of movement once the virus is tamed? Will lock-exempt people come together in cinemas and airplanes?

Persistent aversion to the human community is likely to limit growth in the leisure and hospitality industries, which are major employers.

The pandemic has accelerated the advancement of e-commerce, leaving traditional brick and mortar retailers in a particularly vulnerable state. If a persistent sense of fear leads shoppers to avoid shopping malls, it could limit employment growth. Online retailers like Amazon have aggressively embraced automation, which means that increasing business doesn’t necessarily translate into quality jobs.

Many economists believe that if the vaccines relieve anxiety, people will head for out-of-bounds experiences, crowded restaurants, sporting events, and vacation destinations. Households saved because they canceled their vacation and talked at home.

“If people’s moods are relaxed and some of the restrictions lifted, there could be a loss of spending,” said Ben May, a global economist with Oxford Economics in London. “Much of this will be about the speed and degree to which people return to more normal behaviors. It’s very hard to know. “

But many developing countries will effectively live on another planet.

The United States has made claims for up to 1.5 billion doses of vaccine, while the European Union has blocked nearly two billion doses – enough to vaccinate all of its citizens and a few more. Many poor countries could wait until 2024 to fully vaccinate their populations.

High debt burdens limit the ability of many poor countries to pay for vaccines. Private creditors have refused to participate in a debt suspension initiative advocated by the group of 20.

The promised aid from the World Bank and the International Monetary Fund has turned out to be disappointing. At the IMF, the Trump administration has spoken out against the expansion of so-called special drawing rights – the institution’s basic currency – and has withdrawn additional resources from poor countries.

“The international response to the pandemic has been essentially pathetic,” said Kozul-Wright of the UN Trade Organization. “We are concerned that we will see the same thing again when the vaccines are distributed.”

One element of the Act Accelerator partnership, known as Covax, is supposed to allow poor countries to buy vaccines at affordable prices, but it collides with the reality that production is both limited and controlled by for-profit companies that face shareholders are responsible.

“Most of the people in the world live in countries where they rely on Covax for access to vaccines,” said Mark Eccleston-Turner, an international law and infectious disease expert at Keele University in England. “This is an extraordinary market failure. Access to vaccines is not needs-based. It is solvency based and Covax does not address this issue. “

On December 18, Covax officials announced a deal with pharmaceutical companies aimed at providing nearly two billion doses of vaccines to low- and middle-income countries. The agreement, which focuses on vaccine candidates that have not yet been approved, would provide enough doses to vaccinate a fifth of the population in 190 participating countries by the end of next year.

India is home to pharmaceutical manufacturers who make vaccines for multinational companies like AstraZeneca. However, according to TS Lombard, an investment research firm based in London, the population is unlikely to be fully vaccinated before 2024. The economy is likely to remain fragile.

Even if masses of people in poor countries do not have access to vaccines, their economies are likely to take advantage of the normalization of richer nations. In a world of inequality, growth can coincide with inequality.

If consumer power resumes in North America, Europe, and East Asia, it will boost demand for raw materials, rejuvenate copper mines in Chile and Zambia, and boost exports of soybeans harvested in Brazil and Argentina. Tourists will eventually return to Thailand, Indonesia, and Turkey.

However, some argue that the ravages of the pandemic in poor countries, largely unchecked by vaccines, could limit economic fate worldwide. If the poorest countries don’t get vaccines, the world economy will lose $ 153 billion in annual output, according to a recent study by the RAND Corporation.

“You need to vaccinate health care workers around the world so you can reopen global markets,” said Clare Wenham, a health policy expert at the London School of Economics. “If every country in the world can say, ‘We know that all of our vulnerable people are vaccinated,’ we can get back to the global capitalist trading system much faster.”

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World News

Covid resurgence in Japan, South Korea may hit Asia’s financial restoration

Covid resurgence in Japan, South Korea could hit Asia's economic recovery

Snow falls as people wearing face masks walk through the Asakusa district on March 29, 2020 in Tokyo, Japan.

Tomohiro Ohsumi | Getty Images

SINGAPORE – Towards the end of 2020, many investors are viewing Asia as the region with one of the best economic prospects for the next year as the coronavirus outbreak can be relatively better controlled.

However, a recent surge in Covid cases in some countries threatens to dampen the region’s economic outlook, some analysts have warned.

“For some of the Asian giants, this year’s problems with Covid-19 are unlikely to get better when the clock strikes 12 noon on New Year’s Eve,” said research firm Pantheon Macroeconomics.

However, many parts of Asia – where the virus first appeared – remain lower than in Europe and the US, data from Johns Hopkins University showed.

For some of the Asian giants, this year’s Covid-19 problems are unlikely to get better when the clock strikes 12 noon on New Year’s Eve.

But some countries are now struggling with a far worse resurgence than they did earlier in the pandemic. Even areas that have made great strides in containing the virus may not be spared. Taiwan this week reports its first locally transmitted case since April 12 – underscoring the difficulty in eradicating Covid.

Here’s a look at the Asian economies grappling with a renewed spike in coronavirus infections and how that would affect their economic prospects.

Japan

  • Covid-19 balance sheet: 207,007 cumulative confirmed cases and 2,941 deaths as of Wednesday, according to Hopkins data.

The number of daily reported coronavirus infections in Japan rose again in November and topped 3,000 for the first time last week, Hopkins data showed.

According to Reuters, medical groups in the country warned the pandemic will put a significant strain on the health system. However, Japanese Prime Minister Yoshihide Suga has failed to declare a state of national emergency – although he said he was suspending a travel subsidy program to slow the spread of the coronavirus, the news agency reported.

Economists at Pantheon Macroeconomics wrote in a Wednesday report that the Japanese government’s “relatively soft” rules on social distancing don’t appear to be working and that this could lead to tougher measures in the coming months.

“Therefore, a second and more effective nationwide state of emergency in Japan early next year cannot be ruled out,” the economists said. That would weigh on Japan’s economy in the first quarter of 2021, they added.

South Korea

  • Covid-19 Record: According to Hopkins, there were 53,533 cumulative confirmed cases and 756 deaths on Wednesday.

As in Japan, the daily incidence in South Korea reached unprecedented levels this month – above 1,000 for the first time since the outbreak.

But unlike in Japan, the government in South Korea has taken a tougher stance in response to the new wave of Covid cases.

The government on Tuesday announced a nationwide ban on gathering five or more people and ordered the closure of tourist attractions such as ski slopes and other winter sports facilities, Yonhap news agency reported.

This move, according to Pantheon Macroeconomics, would allow most of South Korea’s economic damage to be contained, for the most part, in the fourth quarter of this year.

Malaysia

  • Covid-19 balance sheet: 98,737 cumulative confirmed cases and 444 deaths on Wednesday, according to Hopkins data.

The Southeast Asian country kept Covid cases to a minimum before the recent surge from October, Hopkins data showed. This prompted the government to impose a new round of partial closure measures in some parts of the country.

Economists with consulting firm Capital Economics said the outlook for the Malaysian economy had become “less optimistic” this quarter, particularly in the area of ​​consumer spending.

“A second wave of the virus and the reintroduction of many restrictions on movement have reversed the sharp recovery in home consumption in the third quarter. Google’s high-frequency mobility data suggests social distancing continues to weigh on activity,” a report said Tuesday.

But the other parts of the economy – like exports – should continue to perform strongly, so the macroeconomic success of the recent resurgence is likely to be “much less” than the previous wave, the economists said.

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Business

Treasury yields rise amid combined financial information, Brexit deal optimism

Treasury yields rise amid mixed economic data, Brexit deal optimism

Government bond yields remained stable on Wednesday as investors digested a mix of economic data as well as signs of an impending Brexit trade deal between the UK and the European Union.

The yield on the benchmark 10-year Treasury note rose 3 basis points to 0.956%, while the yield on the 30-year government bond rose 4 basis points to 1.696%. Bond yields move inversely with prices.

Unemployment claims in the United States stood at 803,000 for the week ending December 19, the Department of Labor said on Wednesday. Economists polled by Dow Jones expected the initial claims to rise to 888,000. However, personal income declined 1.1% in November, compared to an estimate of 0.3% according to data from Dow Jones.

The yield on 10-year government bonds peaked when Brexit negotiators were on the verge of a new trade deal between the UK and the European Union. A deal would avoid tariffs due to come into effect at the beginning of the year.

President Donald Trump proposed on Tuesday not to sign a lengthy coronavirus aid package. He poured cold water on the $ 900 billion Covid relief bill that Congress passed earlier this week. Calling the measure an inappropriate “disgrace”, he called on lawmakers to make a number of changes, including larger direct payments to individuals and families.

The current package includes an increase in unemployment benefits, more small business loans, an additional $ 600 in direct payment, and funding to streamline the critical distribution of Covid-19 vaccines. However, Trump was dissatisfied with the $ 600 direct payments and requested an increase to $ 2,000.

Investors were also upset this week by a new strain of coronavirus first identified in the UK. The variant is believed to be up to 70% more transmissible than previous strains.

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Politics

Stimulus Deal Supplies Financial Aid, for Now

Stimulus Deal Provides Economic Relief, for Now

The Congressional deal for a $ 900 billion dose to fuel slowing economic recovery likely saved millions of Americans from a winter of poverty and prevented the country from falling back into recession.

For much of the economy – especially people and industries isolated from the worst effects of the pandemic – Sunday’s deal could build a bridge to a vaccine-related rebound. This is especially likely if the vaccine is fast and widespread, and the growing number of coronavirus cases doesn’t force another round of widespread shutdowns.

However, for tens of thousands of failed businesses, the money comes in months late, and it may not be enough to feed the unemployed until the labor market recovers. In addition, it could be the last aid from Washington that the economy is getting soon.

The package requires a vote in both Houses and its text was finalized on Sunday. However, it is expected to include most of the elements that economists have long said are critical to avoiding further disasters and helping a recovery. It expands unemployment benefits for millions at risk of losing it and adds money to their checks to pay their bills. It revitalizes the Paycheck Protection Program that kept many small businesses alive last spring.

It continues the eviction moratorium and expanded nutritional benefits that have fed and housed many of the most vulnerable families during the crisis, according to a statement by the Democratic leaders of the House and Senate on Sunday evening.

It also offers a new round of direct payments for most Americans. This element was a lower priority for many economists as many families have maintained their jobs and incomes through the very uneven recovery from the spring stalemate. Still, the checks will gross the economy billions of dollars and help people who keep their jobs but have lost hours or incomes.

However, the help may not be enough to propel the economy past the recovery that has spanned the recent recessions. There are already signs that the crisis is taking a lasting economic toll: long-term unemployment is rising, racial disparities are widening and more people – especially women – are leaving the workforce.

Cash payments in the new package – up to $ 600 per person for households and a weekly supplement of $ 300 for unemployment benefits – are half what they were in Congress last spring. This means that they cause fewer economic problems and do not do as much to offset the savings of the unemployed who get by on benefits that are typically a few hundred dollars a week.

And two programs – one for those who are not covered by traditional unemployment insurance and one that provides assistance after state benefits have expired – will be extended for less than three months. Millions of unemployed Americans will lose vital support if recruitment does not increase significantly in the meantime.

The recovery can also be hampered by what Congress has not done. At its greatest threat is the inability of negotiators to reach an agreement of hundreds of billions of dollars to fill gaps in state and local budgets that have cost 1.3 million jobs since March. Forecasters say the decline in sales makes sustained layoffs likely.

“Things aren’t as bad as they looked in the dark days of March and April, but there are still risks,” said Tracy Gordon, a senior fellow at the Urban Institute in Washington. “It takes a while for things in the economy to find their way into government budgets.”

President-elect Joseph R. Biden Jr. and the Democrats in Congress characterized the relief package as a down payment to prevent short-term economic damage. These efforts should be followed by further assistance to ensure a robust recovery.

But Republican opposition – and growing optimism that vaccine use could stop the pandemic and kick-start tourism, live events, indoor dining, and other declining industries as the New Year begins – makes it likely that Congress will have a hard time overtaking another major bailout package. Achieving this goal in Mr Biden’s early days as president could depend on Democrats winning two runoff elections in Georgia that will determine control of the Senate.

Economy & Economy

Updated

Apr. 18, 2020 at 12:25 am ET

Legislators quickly agreed on the $ 2.2 trillion CARES bill in March but got bogged down in a second round of relief for months after the Democratically controlled house passed a $ 3 trillion version in May would have. The delay took a toll on the recovery and hurt both households and business owners.

The rebound started quickly when companies reopened in May and June, but has slowed significantly and there have been signs in recent weeks that it will reverse. Layoffs are rising, retail sales are falling, and the surge in virus cases has led many states to cut back on business and consumer activities.

Business owner data collected by Alignable, an online small business network, showed steady improvement in their business operations over the summer as the economy reopened – and then struggled again since September when aid dried up Virus cases increased and consumers withdrew.

“A lot of those companies who thought they saw the light at the end of the tunnel in June or July are now looking back and realizing that it’s just a train heading for them,” said Eric Groves, CEO of Alignable.

An analysis of 40,000 small businesses that are tracked by Homebase and provide scheduling and time tracking software for businesses shows that nearly half of the businesses that closed in March at the start of the pandemic either did not reopen or reopen, but then closed again were. The smallest companies were most likely to stay closed or closed again, said Jesse Rothstein of the University of California at Berkeley, who is a member of the economics team that studied the data.

“Everyone laid off a few workers,” Rothstein said as demand plunged into crisis. “If you only had a few workers, it meant you went away.”

For the surviving businesses, the new aid package revitalizes the Paycheck Protection Program, which offers employers forgivable loans.

However, it’s not clear whether the aid will be timely or enough to save companies that have been marginalized, said Kenan Fikri, director of research at the Economic Innovation Group in Washington.

“Small businesses have only just gotten through and now we are in a precarious stage where many of them cannot expect a full return on sales for at least six months depending on when we launch a vaccine,” he said. ‘Did we lose in the seventh inning?’ I think we’ll find out the question here. “

There are reasons to be optimistic. The economy has proven to be more resilient than many forecasters expected earlier this year. The unemployment rate fell from nearly 15 percent in April to 6.7 percent in November, and economists, including the Fed, have repeatedly raised their economic forecasts. Many companies have found new ways of operating. The recent surge in layoffs is far less severe than the spring job losses.

This resilience is due in part to previous rounds of government assistance that have proven sustainable. Household savings spiked in the spring when stimulus checks and increased unemployment benefits surfaced on American bank accounts. According to JPMorgan Chase, the typical family’s balance in October, although they have declined since then, was above pre-pandemic institute levels.

However, the effects are not evenly distributed – and even if the most recent round of relief contributes to a full recovery, scars remain.

“I don’t think we can undo the damage,” said Michelle Holder, an economist at John Jay College of Criminal Justice in New York. “The damage is done.”

Account balances have declined fastest for low-wage workers, who were hardest hit by job losses during the pandemic and most likely to need the $ 600 grant that ended in July.

Researchers estimate that millions of families have fallen into poverty during the pandemic. While a new round of government aid could bring many of them back above the poverty line, it will still have lasting effects.

“The best scenario is we look back at it and say, ‘Well, an ounce of prevention would have been worth a pound of cure,” said Elizabeth Ananat, an economist at Barnard College who researched the effects of the pandemic on low-income households.

“The more likely scenario,” she added, “is that we will all spend the next 30 years documenting the damage it does.”

Emily Cochrane contributed to the coverage.

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World News

Basis of China’s financial restoration ‘not but strong,’ leaders say

Foundation of China's economic recovery 'not yet solid,' leaders say

Workers make protective masks at a factory in Handan, Hebei Province, China on Jan. 22, 2020.

China Daily about REUTERS

BEIJING – Chinese leaders warned at a key economic planning meeting last week that growth was still facing many challenges.

While the rest of the world is still grappling with the shock of the coronavirus pandemic, China will be the only major economy expanding this year.

President Xi Jinping, Prime Minister Li Keqiang, and other heads of state and government who attended the Central Economic Work Conference from December 16-18, commented positively on China’s relative achievements and remained cautious of major changes in economic policy, according to state media. The annual meeting sets development priorities for the coming year.

The meeting indicated that while the country recognizes achievements, it needs to be clearly aware of the changes caused by the pandemic and uncertainties abroad, state media said.

“The foundation of our economic recovery is not yet solid,” the report said in a CNBC translation of the Chinese text.

Covid-19 first appeared in the Chinese city of Wuhan late last year. To control the outbreak, Chinese authorities temporarily closed more than half of the country earlier this year. GDP declined 6.8% in the first quarter before returning to growth at 3.2% in the second quarter.

“Not having a solid (foundation) yet indicates a slightly slower than expected start to domestic demand and consumption,” Bruce Pang, director of macro and strategy research at China Renaissance, said in a Chinese statement, according to a CNBC translation.

Investment in manufacturing and the non-government stake have not rebounded much, Pang said. He added there were doubts about the sustainability of exports, uncertainties about employment and many other concerns.

Economists have suggested that much of China’s recovery can be attributed to traditional growth drivers such as exports, fueled by overseas demand for pandemic-related products.

However, many Chinese have yet to increase their spending as they have concerns about future income. This lack of consumption affects an economy that Beijing seeks to support with domestic demand rather than foreign demand.

While China expects growth of around 2% this year, retail sales were down 4.8% year over year by the end of November.

“Next year the pace of economic growth could slow down from an initial rapid pace,” the state media said, according to a CNBC translation of the Chinese text. “Keeping the economy within reasonable limits remains an important test.”

GDP expansion in the first few months of next year would look high compared to the decline in the first quarter of 2020. Overall, many economists predict that China’s GDP will grow by around 8% next year.

Pang pointed out that the rate would represent a 5% growth in 2020 and a further 5% increase in 2021.

That’s slower than the 6.1% pace in 2019.

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New York Gov. Cuomo warns a January financial shutdown is feasible as Covid instances soar to springtime information

New York Gov. Cuomo warns a January economic shutdown is possible as Covid cases soar to springtime records

Andrew Cuomo, Governor of New York State, speaks at a press conference in New York City on September 8, 2020.

Spencer Platt | Getty Images

New York’s non-essential stores could be forced to close again in January if the state doesn’t tackle escalating coronavirus cases that have soared in recent weeks to record highs not seen since the spring, Governor Andrew Cuomo said on Wednesday.

“Of course, a shutdown in January is possible,” said Cuomo at a press conference in Albany. “But there is a big but,” he said, spelling the word letter by letter “BUT”.

Whether the state will again impose an economic lockdown depends on what New Yorkers do in the remaining vacation and whether new Covid-19 infections decrease or increase, he said.

According to a CNBC analysis of data compiled from data from Johns Hopkins University, New York has been struggling with an average of 10,294 new infections per day for the past week, up more than 7% from the previous week. That’s more new cases every day than the state did in the spring, when the hospital systems in New York City and elsewhere were overwhelmed with patients.

Cuomo didn’t say what a second shutdown would look like. He imposed another ban on indoor dining in New York City on Monday but said he wanted to keep public schools open and has not yet made a decision on whether to close non-essential stores.

“It’s up to us. What will happen in three weeks? What will happen in four weeks? You tell me what you are going to do in the next three or four weeks and I will tell you what will happen,” he said.

At the current rate of spread of the virus, New Yorkers should be prepared for a second shutdown, similar to the one Cuomo issued this spring when unnecessary shops and schools closed and people were told to stay home to avoid the spread of Covid -19 stop, Mayor Bill de Blasio warned.

He said it was “increasingly necessary to just break the back of the second wave, to keep this second wave from growing, to prevent it from taking lives, not to threaten our hospitals,” de Blasio said during a press conference Monday .

Cuomo urged New Yorkers to take “personal responsibility” in order to slow the spread of the virus, especially during the holiday season. The state is now concerned about what the governor calls “living room sprawl”. This is because nationwide contact tracing data has shown that nearly 74% of new Covid-19 cases are from households and social gatherings.

“Nobody knows what New Yorkers will do until Christmas or how they will behave during Christmas week,” said Cuomo. “The numbers are not predestined. The numbers reflect what we are doing.”

The governor also urged that state hospitals move into “crisis management mode,” which means that health systems must work with neighboring hospital systems to “share” the burden of patients and provide resources to hospitals in areas with high Covid-19 Transfer installments.

According to a CNBC analysis of data from the Covid Tracking Project run by journalists from The Atlantic, the New York average is more than 5,400 people hospitalized, an increase of more than 25% from the previous week.

“Balance the load so hospitals aren’t overwhelmed by what we’ve seen in the past,” said Cuomo.

The state has started delivering its initial allocation of Covid-19 vaccines to frontline health workers. The state has received 87,750 doses of Pfizer’s Covid-19 vaccine so far and plans to receive an additional 80,000 doses in the next few days, Cuomo said.

“That goes for residents of nursing homes,” said Cuomo. New York could receive an additional 346,000 doses of vaccine from Moderna if the U.S. Food and Drug Administration clears the emergency for emergencies this week.

“Slow down the spread, manage the hospitals, give the vaccine,” Cuomo said.

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Financial Stimulus Deal Takes Form in Congress: Stay Market Updates

Senate Majority Leader Mitch McConnell in the U.S. Capitol in Washington Tuesday. “We committed to continuing these urgent discussions until there’s an agreement,” he said Wednesday morning. 

Here’s what you need to know:

Credit…Anna Moneymaker for The New York Times

Congressional leaders on Wednesday closed in on an agreement on a coronavirus relief measure that could infuse the economy with as much as $900 billion, as they raced to complete both a pandemic aid package and a catchall federal spending measure before government funding lapses on Friday.

The top two Republicans and Democrats on Capitol Hill appeared to be coalescing around a plan that would include both another round of direct stimulus payments to Americans and additional unemployment benefits, according to people familiar with the emerging compromise who described it on condition of anonymity.

While the details were not yet final, the plan was also expected to provide billions of dollars for vaccine distribution, schools and small businesses, but omit coronavirus liability protections long sought by Republicans and a dedicated funding stream for state and local governments insisted upon by Democrats — the two most contentious sticking points.

The contours of the deal, reported earlier by Politico, became clear after a flurry of late-night negotiations among the four leaders and their staff on Capitol Hill. With Steven Mnuchin, the Treasury secretary, joining by phone, the four met twice on Tuesday in Speaker Nancy Pelosi’s office suite in the Capitol to work out the details.

“We committed to continuing these urgent discussions until there’s an agreement,” Senator Mitch McConnell, Republican of Kentucky and the majority leader, said Wednesday morning in a speech on the Senate floor.

It was unclear how large the direct payments would be, though the $2.2 trillion stimulus law enacted in March provided $1,200 per adult, and progressives and some conservative Republicans have recently called for the same amount or more to be included in the new round of aid.

Negotiators were also still haggling over an expansion and extension of unemployment benefits and how long they would last. They were also discussing reinstituting supplemental jobless payments — which were at $600 per week when they lapsed over the summer, but would likely be revived at a smaller amount. Although Democrats appeared to have dropped their demand for a major new infusion of aid for state and local governments, some officials familiar with the discussions said privately that there were other avenues to provide some of those funds in the final package.

An agreement on both the relief measure and must-pass legislation including the dozen spending bills needed to keep the government funded beyond Friday could emerge later on Wednesday.

Shoppers at Gateway Mall in Lincoln, Neb., on Black Friday. Retail sales fell 1.1 percent in November, the Commerce Department reported.Credit…Walker Pickering for The New York Times

For the first time since spring, U.S. retail sales have declined, raising questions about the strength of consumer spending and how retailers are faring in the all-important holiday shopping season.

Retail sales fell 1.1 percent in November as spending on categories like automobiles, electronic stores, clothing and restaurants and bars softened, according to a report from the Commerce Department on Wednesday.

Economists had expected a smaller decline amid robust holiday sales, driven by online spending. But the Commerce Department also revised its tally for October to a 0.1 percent decline, from an increase of 0.3 percent reported earlier.

The U.S. economy has slowed in recent months amid a surge in coronavirus cases and a steady increase in the ranks of the unemployed. Even as businesses have come under fresh pressure, lawmakers have yet to reach an agreement on a new stimulus package.

The uncertainty around holiday spending has been exacerbated as retailers pushed annual sales events into October, in a bid to jump-start the season and prevent crowded stores and shipping delays in November. Many major chains reported sales gains in October, but they were not certain about how it would affect spending in November and December.

Black Friday, which has traditionally signaled the start of the holiday shopping season, was also largely a bust for many retailers amid the rise in cases. Some companies reported that in-person traffic that day declined by as much as 50 percent from last year, as shoppers concerned about the virus stayed away from the stores.

With the new concerns around shopping in person, retailers have been racing to accommodate a surge in shipping demand, grappling with new surcharges and delays with major carriers including UPS and FedEx.

By: Ella Koeze·Source: Refinitiv

  • A surprisingly dour report on retail sales took some of the enthusiasm out of the stock markets on Wednesday.

  • Shares in Europe and the United States had been heading for a second day of solid gains before the Commerce Department said that retail sales fell 1.1 percent in November, a far sharper decline than economists had expected and fresh evidence of the resurgent coronavirus’s impact on the world’s largest economy.

  • Instead, the S&P 500 started the day with a small decline, and shares in Europe were also off their highs of the day. The Stoxx Europe 600 index and the FTSE 100 in Britain were both about half a percent higher.

  • Before the retail sales report, markets had been bolstered by signs of progress toward an economic stimulus package in Washington, and after the latest Purchasing Managers Index report offered a positive outlook on the European economy. The manufacturing index reached 56.6 points, up from 55.3 in November, and the composite output index hit 49.8 points, from 45.3 last month.

  • “The data hint at the economy close to stabilizing after having plunged back into a severe decline in November amid renewed Covid-19 lockdown measures,” said Chris Williamson, the chief business economist at IHS Markit, which compiles the reports.

  • Further insight on the state of the U.S. economy will come later on Wednesday when the Federal Reserve chair, Jerome H. Powell, speaks to reporters after the end of the central bank’s final scheduled meeting of the year. The Fed has been offering reassurance that it will continue supporting the economy, but some policymakers are divided over how much needs to be done now.

  • U.S. lawmakers held talks late Tuesday seeking an agreement on a pandemic stimulus bill ahead of a Friday deadline. Senator Mitch McConnell, the majority leader, said afterward that “we’re making significant progress,” and Speaker Nancy Pelosi offered a similar appraisal. On the table is a package of funding to support unemployed workers and troubled businesses, as well as an omnibus spending bill to keep government money flowing.

The European Central Bank headquarters in Frankfurt, Germany. Banks can begin paying dividends again, the central bank said, but with strict limits.Credit…Daniel Roland/Agence France-Presse — Getty Images

The European Central Bank said Tuesday that it would allow banks to resume limited payouts to shareholders, an indication that regulators are slightly less worried that the pandemic will set off a financial meltdown.

Since March, the central bank has been pressuring commercial banks to stockpile cash to deal with possible losses stemming from the devastating impact on the eurozone economy caused by the pandemic.

Banks can begin paying dividends again after consulting with regulators, the European Central Bank said in a statement on Tuesday, but it set strict limits on how much they can pay out as a percentage of profit and capital. The limits will remain in effect until at least the end of September 2021.

Still, the end of the dividend moratorium, which was technically a recommendation, is a sign that the banking system and the eurozone economy are inching toward normalcy.

“In revising its recommendation, the E.C.B. acknowledges the reduced uncertainty in macroeconomic projections,” the central bank said. An analysis earlier this year “confirmed the resilience of the European banking sector,” it said.

The economic crisis has forced most banks to set aside large sums to cover losses from borrowers who lost their jobs and businesses that suffered severe declines in sales. But there have been no major bank failures as a result of the pandemic, in part because regulators have forced lenders to stockpile capital in recent years and take less risk.

The central bank said that lenders should discuss dividend payments with regulators beforehand, and it cautioned banks to exercise “extreme moderation” in bonuses and other payouts to executives.

The European Central Bank is responsible for supervising banks in the eurozone that are considered big enough or important enough to set off a financial crisis. The bank said Tuesday that national regulators should apply the same standards to the smaller banks under their purview.

Philadelphia is a case study in the simple-but-not-easy task of helping tenants with the rent. Like most places, it isn’t close to satisfying the need.Credit…Hannah Yoon for The New York Times

Almost from the moment the pandemic spread across the United States, advocacy groups have warned that the economic fallout could cause mass displacement of low-income tenants.

In response, more than 400 state and local governments have used money from the federal CARES Act to set up funds to cover at least $4.3 billion in rental assistance — money that has helped tenants pay their bills and landlords stay current on their mortgages, according to a database set up by the National Low Income Housing Coalition, a policy group.

But many jurisdictions are reporting trouble spending it, and with barely two weeks left in the year, they are on pace to have more than $300 million left over, according to the coalition’s database. In a pattern that predated the pandemic, the programs have been complicated by bureaucratic hurdles, competing budget demands and a reluctance among landlords to take part, reports Conor Dougherty for The New York Times.

Philadelphia is a case study in the simple-but-not-easy task of helping tenants with the rent. Social programs are often a partnership in which cities provide funding and lay out rules but delegate the execution to quasi-governmental nonprofit organizations like the one Gregory Heller works at.

Like most places, Philadelphia is not close to satisfying the need for help. But through rounds of rejiggering and three phases of funding — each with its own maze of rules and requirements — Mr. Heller’s group built a team to distribute aid, whittled down the processes that delayed it and concluded that the best way to help was the most straightforward: Give the money directly to renters.

“There’s a societal belief that poor people can’t spend money the right way, and I think it’s important to start questioning that assumption,” Mr. Heller said.

The companies drawing Wall Street’s attention are notable for how niche their products and services are.Credit…Hannah Yoon for The New York Times

Until recently, the temperature-controlled storage and shipping of pharmaceutical products, known as the “cold chain,” was a relatively sleepy corner of the health care industry.

But the virus, and the temperature-sensitive vaccines that are poised to combat it, have brought new attention to the cold-chain delivery systems in the United States and beyond, Kate Kelly reports for The New York Times. Wall Street, which likes nothing better than a hot trade with the potential for big profits, is rushing to grab a piece of the action.

The companies getting attention from Wall Street are notable for how niche their operations are. Many use an elaborate network of freezers and specialized trucks and aircraft to move temperature-sensitive materials — such as blood, stem cells and tissue — around the world without compromising their efficacy. It’s a delicate process, because a product can go from vital to useless within minutes of being removed from cold storage.

Potential investors are constantly calling Stirling Ultracold, whose freezer equipment is powering UPS’s “freezer farms” in Louisville, Ky., and the Netherlands, where vaccines will be stored. “There’s not a day that goes by” that an inquiry doesn’t come in,” said Dusty Tenney, Stirling’s chief executive, who is running his Athens, Ohio, production lines around the clock.

Demand for Stirling’s freezer engines — the core component of their upright, under-the-counter and portable freezers — has soared, and the estimated waiting time for new orders is six to eight weeks, the company said. On Dec. 8, after multiple prospective investors studied the company’s financial metrics in a due diligence process, Stirling received a capital injection of an undisclosed amount that it planned to use to buy new equipment and expand production.

In October, Blackstone, the private equity giant, invested $275 million in Cryoport, a Nashville company that specializes in shipping sensitive medical materials at freezing temperatures. Investors have also been bullish on Ember, the beverage-heating company that has developed a refrigerated medical shipping box with built-in GPS and already counts two Jonas Brothers and the Brooklyn Nets forward Kevin Durant as shareholders.

Credit…WhistlePig

Moët Hennessy, the premium spirits arm of French luxury giant LVMH Moet Hennessy Louis Vuitton, is taking a stake in WhistlePig, in a bet that it can make typically American rye whiskey a global hit, the DealBook newsletter reports.

It’s the second American whiskey brand that Moët Hennessy, has invested in after Washington’s Woodinville in 2017. Terms of the deal were not disclosed.

WhistlePig brews its Whiskey in Vermont oak, and its 15-year aged whiskey sells for more than $200 a bottle. The company was founded by Wilco Faessen, now a senior banker at Evercore, and Raj Bhakta, an entrepreneur and onetime “Apprentice” contestant.

Mr. Bhakta sold his shares in the company when Byron Trott’s investment firm, BDT Capital, took a minority stake last year. BDT will keep its stake following the deal, in which no investors cashed out. The deal with Moët Hennessy does not include a path to an outright sale, Mr. Faessen said.

Mr. Faessen said that formal talks about a partnership began in January, and the pandemic that did not alter the deal, besides lengthening the time it took to work through the details. Sales for both WhistlePig and Moët Hennessy came under pressure as bars and restaurants shut, but the companies also noticed a shift to premium liquor during lockdowns.

“It’s just easier to treat yourself when you’re stuck at home and sick of doing Zoom meetings,” said Jeff Kozak, WhistlePig’s chief executive, who noted that sales were up this year.

Rye whiskey is consumed mostly in the United States, but Moët Hennessy thinks it can entice drinkers elsewhere. Connoisseurs who want to “expand their repertoire in the category of high-end whiskies” have recently turned to Japanese brands, said Philippe Schaus, the Moët Hennessy chief executive, “and we don’t see why we will not succeed to bring them to high-end American whiskeys.”

  • Domino’s Pizza said this week that it would pay a bonus of up to $1,200 apiece to more than 11,500 hourly workers in December. The bonuses will total more than $9.6 million, the pizza chain said. Earlier this year, Domino’s paid a bonus to frontline workers at its corporate stores and supply chain centers. “We have the honor and privilege of being open and operating throughout the U.S. during this crisis, and we recognize that we could not be doing it without the hard work and dedication of our team members,” Ritch Allison, the company’s chief executive, said in a statement.

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Unemployment Claims Rise as Financial Disaster Grinds On: Reside Updates

The Treasury secretary, Steven Mnuchin, appeared before a Congressional Oversight Commission on Capitol Hill on Thursday.

Here’s what you need to know:

Credit…Anna Moneymaker for The New York Times

The Treasury secretary, Steven Mnuchin, was rebuked on Thursday at a congressional oversight hearing over his management of the economic relief effort, facing criticism from lawmakers over his decision to pull the plug on five of the Federal Reserve’s emergency lending programs.

Scrutiny of Mr. Mnuchin’s handling of the programs comes as he is negotiating with Congress over another $900 billion economic relief bill that lawmakers hope to pass before the end of the year.

The criticism over Mr. Mnuchin’s decision to end the Fed programs adds to the controversy surrounding one of his final acts as Treasury secretary. Mr. Mnuchin insisted again on Thursday that he was following the intent of the law in ending the lending programs at year-end and in clawing back billions from the Fed. That position is at odds with what many legal experts and Democrats in Congress say was actually required under the law.

“This was a political decision — one intended to hamstring the incoming administration even as Covid deaths are spiking and the economic recovery is slowing,” Bharat Ramamurti, an appointed member of the Congressional Oversight Commission, said at Thursday’s hearing. “Let me put it this way: Does anyone think the Treasury would have ended these programs if Donald Trump were re-elected?”

Mr. Ramamurti, a Democrat, noted that Mr. Mnuchin’s decision was only made public after the election and that Treasury had earlier indicated that the programs could continue depending on market conditions.

On Nov. 19, Mr. Mnuchin declared that the he believed all along that the programs could not continue past year-end and asked the Federal Reserve to give back the unused investments.

Mr. Mnuchin was also grilled over Treasury’s decision to extend a loan to a trucking company that was struggling before the coronavirus.

Republicans on the commission, Senator Patrick J. Toomey of Pennsylvania and Representative French Hill of Arkansas, both raised questions about why the company, YRC Worldwide, was worthy of loan that was justified on the grounds that the company was critical to national security.

“It’s been hanging on by a thread since the global financial crisis,” Mr. Hill said.

Mr. Toomey said that YRC, which had been contracted by the Defense Department to provide meal kits, protective equipment and other supplies to military bases, appeared to be nearly insolvent and asked whether giving it money was a prudent use of taxpayer funds.

Mr. Mnuchin, a former banker, agreed that he would not have underwritten the loan if he was still in private industry but said the law gave Treasury the ability to help prevent financial problems and job losses at companies deemed critical to national security.

There was a tremendous risk to the Deparment of Defense and a tremendous risk to the number of jobs,” Mr. Mnuchin said.

Lawmakers also pressed Mr. Mnuchin about one of YRC’s financial backers, Apollo Global Management, a private equity firm that also has ties to the White House.

Mr. Ramamurti asked Mr. Mnuchin if Jared Kushner, President Trump’s son-in-law and senior adviser, had encouraged him to approve the loan. In 2017, Apollo lent $184 million to Mr. Kushner’s family real estate firm, Kushner Companies, to refinance the mortgage on a Chicago skyscraper.

Mr. Mnuchin said that Mr. Kushner had no input and defended the loan, claiming that it staved off substantial job losses.

“I do think it would have been bankrupt and the company would have fired lots of people,” Mr. Mnuchin said.

Pandemic Unemployment

Assistance claims

Pandemic Unemployment

Assistance claims

Applications for jobless benefits resumed their upward march last week as the worsening pandemic continued to take a toll on the economy.

More than 947,000 workers filed new claims for state unemployment benefits last week, the Labor Department said Thursday. That was up nearly 229,000 from the week before, reversing a one-week dip that many economists attributed to the Thanksgiving holiday. Applications have now risen three times in the last four weeks, and are up nearly a quarter-million since the first week of November.

On a seasonally adjusted basis, the week’s figure was 853,000, an increase of 137,000.

Nearly 428,000 applied for Pandemic Unemployment Assistance, a federal program that covers freelancers, self-employed workers and others who don’t qualify for regular state benefits.

Unemployment filings have fallen greatly since last spring, when as many as six million people a week applied for state benefits. But progress had stalled even before the recent increases, and with Covid-19 cases soaring and states reimposing restrictions on consumers and businesses, economists fear that layoffs could surge again.

“It’s very clear the third wave of the pandemic is causing businesses to have to lay people off and consumers to cut back spending,” said Daniel Zhao, senior economist for the career site Glassdoor. “It seems like we’re in for a rough winter economically.”

Jobless claims rose in nearly every state last week. In California, where the state has imposed strict new limits on many businesses, applications jumped by 47,000, more than reversing the state’s Thanksgiving-week decline.

The monthly jobs report released on Friday showed that hiring slowed sharply in early November and that some of the sectors most exposed to the pandemic, like restaurants and retailers, cut jobs for the first time since the spring. More up-to-date data from private sources suggests that the slowdown has continued or deepened since the November survey was conducted.

“Every month, we’re just seeing the pace of the recovery get slower and slower,” said AnnElizabeth Konkel, an economist with the job site Indeed. Now, she said, the question is, “Are we actually going to see it slide backward?”

Many economists say the recovery will continue to slow if the government does not provide more aid to households and businesses. After months of gridlock in Washington, prospects for a new round of federal help have grown in recent days, with congressional leaders from both parties signaling their openness to a compromise and the White House proposing its own $916 billion spending plan on Tuesday. But the two sides remain far apart on key issues.

The stakes are particularly high for jobless workers depending on federal programs that have expanded and extended unemployment benefits during the pandemic. Those programs expire later this month, potentially leaving millions of families with no income during what epidemiologists warn could be some of the pandemic’s worst months.

Dara Khosrowshahi, Uber’s chief executive, said that drivers had served as a “lifeline” during the pandemic by delivering food and transporting health care workers.Credit…Jeenah Moon for The New York Times

Uber drivers and food delivery couriers should get priority access to the coronavirus vaccine, Dara Khosrowshahi, Uber’s chief executive, wrote in a letter to the governors of all 50 states.

Arguing that drivers had served as a “lifeline” during the pandemic by delivering food and transporting health care workers, Mr. Khosrowshahi said that they had earned a spot near the front of the vaccination line alongside other kinds of frontline workers.

“As you finalize your state-level allocation and distribution plans, I encourage you to recognize the essential nature of their work” Mr. Khosrowshahi wrote to the governors. “I want to ensure these individuals can receive immunizations quickly, easily and for free.”

He also offered to use Uber’s app to promote the vaccine and said Uber could be used to help people get to vaccination appointments.

The Centers for Disease Control and Prevention has recommended that health care workers who are at risk of contracting the virus and residents of long-term care facilities should be the first people to receive the vaccine.

Essential workers should be next, the C.D.C. suggested. But individual states have varied definitions of which workers meet the criteria. Uber drivers should be considered in that phase, Mr. Khosrowshahi said.

Volunteers prepare food for families in need in Newton Centre, Mass. Two federal unemployment programs are set to expire, potentially leaving millions vulnerable to eviction and hunger.Credit…Cody O’Loughlin for The New York Times

Millions of Americans will lose their only income in a few weeks if Congress doesn’t act soon to extend unemployment benefits.

Congress created two programs in the spring to expand the unemployment safety net: Pandemic Emergency Unemployment Compensation, which offers 13 weeks of payments to people whose regular state benefits have run out, and Pandemic Unemployment Assistance, which is intended for people left out of the regular unemployment insurance system. But the week ending Dec. 26 is the last for which people can claim benefits under the programs.

Figuring out how many people stand to lose benefits is surprisingly difficult. Data from the Labor Department on Thursday showed that 4.5 million people were enrolled in the program to extend state benefits as of the third week of November. That was down slightly from a week earlier but had been rising quickly as people exhaust their regular benefits, which last six months in most states. If the program ends, some people will qualify for a separate federal extended benefits program, but that extension isn’t available in all states.

Pandemic Unemployment Assistance is even more complicated. The report on Thursday showed that 8.6 million people were enrolled, but that figure is almost certainly an overestimate. A recent report from the Government Accountability Office found that the program had been plagued by fraud and double counting, rendering the data unreliable.

By any accounting, however, millions stand to lose their income if the programs end. Many have already drawn down savings, leaving them with little financial cushion and putting them at risk of eviction or foreclosure.

“They’re going to be very quickly forced to make a lot of bad financial decisions to put food on the table,” said Andrew Stettner, a senior fellow at the Century Foundation, a progressive group. “It can be something you can’t recover from or that takes years to recover from.”

Outside the European Central Bank’s former headquarters, in Frankfurt. Credit…Yann Schreiber/Agence France-Presse — Getty Images

The European Central Bank administered another dose of stimulus to the eurozone economy on Thursday, as policymakers signaled that they expected the impact of the pandemic to linger into 2022 even as the rollout of vaccines begins.

The bank’s Governing Council, which met on Wednesday and Thursday, extended and enlarged programs intended to keep borrowing costs low for eurozone businesses and consumer.

The bank said it would increase pandemic-related bond buying — essentially a money-printing program — by 500 million euros, to a total of €1.85 trillion euros, or $2.2 trillion. The bank said it expected to continue the purchases at least until March 2022, nine months longer than planned.

The central bank also extended by a year, to June 2022, an initiative that allows commercial banks to borrow money at negative interest rates, provided the banks pass the credit on to their customers.

The decisions indicate that the European Central Bank’s Governing Council believes economic recovery is still months away, and extraordinary measures are needed to blunt the damage caused by the pandemic.

A second wave of coronavirus infections provoked a renewed economic downturn in the last quarter of this year, prompting the bank to take action, Christine Lagarde, the president of the European Central Bank, told reporters during a news conference.

The most recent analysis by central bank economists suggests “a more pronounced near-term impact of the pandemic on the economy and a more protracted weakness in inflation than previously envisaged,” Ms. Lagarde said.

The new burst of stimulus was not a surprise after Ms. Lagarde telegraphed policymakers’ intentions at a news conference in October, and repeated the message several times afterward. The only unknowns were what precise form the stimulus would take, and how big it would be.

The measures announced Thursday were in addition to 1.35 trillion newly created euros that the central bank had allocated to buy government and corporate bonds. The purchases are a way of pushing down market interest rates to keep borrowing costs low.

Since April, the central bank has also been lending to commercial banks at interest rates as low as minus 1 percent, in effect paying lenders to take the money as a way of pumping credit into the economy. The commercial banks must lend the money to their customers and meet other conditions to qualify.

United Airlines agreed to invest in a venture plans to build large plants where carbon will be captured from the air and stored underground.Credit…Jeff Chiu/Associated Press

United Airlines said on Thursday that it planned to reduce its greenhouse gas emissions to zero by 2050, in part by investing in capturing and storing carbon.

The airline said it had agreed to invest in 1PointFive, a joint venture between a subsidiary of Occidental Petroleum and Rusheen Capital Management, a private equity firm. That venture plans to build large plants in the United States where carbon will be captured from the air and permanently stored deep underground. Each plant will be designed to remove a million tons of carbon dioxide a year, or the equivalent of the carbon removed by about 40 million trees, according to the airline.

United is among a growing list of companies to promise to effectively eliminate their contribution to climate change. Airlines face a particularly difficult challenge because the technology to produce a zero-emission jet that can economically ferry hundreds of people over long distances does not yet exist and may not for decades.

Some experts and corporate leaders, including United’s chief executive, Scott Kirby, said the world would not be able to meet its climate goals without capturing carbon dioxide in the air and storing it in perpetuity. The approach is technically feasible, but it is expensive and has yet to be deployed on a large scale.

“Everyone that really wants to get the globe down to zero is going to have to come to grips with direct capture and sequestration because that is going to be the only way to get there by 2050,” Mr. Kirby told reporters on a call on Wednesday.

To meet its goal, United also plans to invest in the development and use of “sustainable fuel” and undertake other measures. American Airlines recently announced a similar pledge to achieve net zero carbon emissions by 2050, and Delta Air Lines said this year it would invest $1 billion to become the world’s “first” carbon neutral airline.

  • Stocks drifted between gains and losses on Thursday, as new data showed that unemployment claims jumped sharply in the United States last week, and the European Central Bank’s plans to expand stimulus measures fell short of what some traders were expecting.

  • The S&P 500 fell half a percent in early trading before recouping those losses. The Stoxx Europe 600 slipped about 0.8 percent, while the FTSE 100 index in Britain was flat after giving up its early gains.

  • The Labor Department said on Thursday that more than 947,000 workers filed new claims for state unemployment benefits last week, up nearly 229,000 from the week before. Applications have now risen three times in the last four weeks.

  • The report highlights the importance of a new economic stimulus plan to shore up households and businesses as the pandemic grinds on. Prospects for a new round of federal help have grown in recent days, with the White House proposing its own $916 billion spending plan on Tuesday. But lawmakers remain far apart on key issues.

  • The E.C.B., which has bought more than 600 billion euros’ worth of European bonds as part of an effort to keep government borrowing costs low, said on Thursday that it would increase its bond-buying plan by 500 billion euros and keep purchasing the debt until at least March 2022.

  • The pound fell against all other major currencies, losing 0.9 percent against the euro and 0.6 percent against the dollar, after Prime Minister Boris Johnson of Britain returned from Brussels without a breakthrough on Brexit trade talks with the European Union. The two sides have set a new deadline of Sunday to secure a deal.

  • On Wednesday, Britain signed trade agreements with Singapore and Vietnam. Britain has rushed to sign dozens of free-trade agreements with countries because on Jan. 1 it will be independent of the European Union customs union. The agreements essentially replicate the terms of the E.U. pacts with those countries.

Merck’s chief executive, Kenneth C. Frazier, will lead a workplace diversity effort called OneTen.Credit…Mike Cohen for The New York Times

Jarred by the death of George Floyd and the issues of racial injustice raised in its wake, the chief executives of three dozen companies are starting an initiative to provide a million jobs for Black workers in the next decade.

The effort, called OneTen, is led by Merck’s chief executive, Kenneth C. Frazier, and IBM’s executive chairman, Ginni Rometty. It includes leaders at 37 companies like American Express, AT&T, Bank of America, Cisco, Delta Air Lines, General Motors, Johnson & Johnson, Nike, Stryker, Target and Wal-Mart.

The companies hope to draw in a more diverse community of workers through a recruiting start-up that will identify potential job applicants with the help of community colleges, nonprofit groups, and other organizations known for cultivating Black talent.

Organizers said the jobs would have a wide range, from nurse practitioners to roles relying on specialized technology skills. The hope, they said, is to put more Black employees into better-paying, more secure jobs that will help sustain working families and provide better access to the upper echelons of corporations.

“The primary creator of wealth in the United States is the private sector,” Mr. Frazier said. “We can rebuild our country coming out of this pandemic. And if private companies decide that they’re going to hire, as we rebuild our economy, with an equity lens, then we’ll change the country.”

Mr. Frazier, one of only a few chief executives in the Fortune 500 who is Black, said the OneTen effort began after the killing of Mr. Floyd last May by a Minneapolis police officer. The event set off angry protests over racial inequities and “soul searching” in corporate America as well, Mr. Frazier said.

Talking with other chief executives, business organizations and Ms. Rometty, who has emphasized the importance of a diverse work force at IBM, Mr. Frazier said he came to believe that, as employers, their best tool for combating systemic racism was to attract new Black talent into well-paying jobs at their companies. Given that only about 22 percent of Black people over the age of 25 in the United States have attained a bachelor’s degree — a markedly lower percentage than white and Asian people — Mr. Frazier and Ms. Rometty said that drawing more Black talent would probably require dropping certain college-education requirements.

“As an employer, if I state that every job has to have a college degree, I am predetermining the outcome,” said Ms. Rometty. “The talent is out there; I must find another pathway for it to come to me.”

OneTen — the name refers to hiring one million workers in 10 years — is set to begin its work in January. A chief executive has not yet been named.

Dr. Vivek H. Murthy advised the N.C.A.A. Board of Governors in the early days of the coronavirus pandemic.Credit…Hilary Swift for The New York Times

President-elect Joseph R. Biden Jr.’s choice for surgeon general, Dr. Vivek H. Murthy, had a central role in the National Collegiate Athletic Association’s decision in March to cancel this year’s national basketball tournaments — one of the earliest and most culturally significant signs that the virus would upend ordinary life in America.

The work of Dr. Murthy, a member of the association’s powerful Board of Governors who was surgeon general during part of the Obama administration, offers a view into how he approached the pandemic’s initial threat in the United States, and how he might help shape the federal government’s response under Mr. Biden.

A newcomer to the insular world of college athletics, Dr. Murthy proved a cautious, deliberate expert who was wary of making drastic decisions prematurely, interviews with more than a dozen people who participated in the N.C.A.A.’s meetings suggest. But they said that as the tournaments approached and more data and scientific research emerged, Dr. Murthy was a forceful and effective champion of measures that had been unthinkable to most of society only days or weeks earlier.

Indeed, it was Dr. Murthy who urgently told board members that they risked fueling a deadly crisis if they allowed the tournaments to proceed as scheduled.

“He was instrumental in convincing the board that the time to act was now,” said Kenneth I. Chenault, a former chairman of American Express who sits on the N.C.A.A. board.

But board members like Mr. Chenault said that it was plain that Dr. Murthy understood the cultural and financial repercussions of a decision like canceling the basketball tournaments, which generate hundreds of millions of dollars.

  • The Trump administration announced Wednesday that it was filing a challenge to measures that Canada uses to protect its dairy market, the first enforcement action taken under a new trade agreement that the countries agreed to last year. Under the terms of the United States-Mexico-Canada Agreement, which replaced the North American Free Trade Agreement this year, the United States and Canada will now enter consultations, and if the issue isn’t resolved the United States can request a special panel be formed to examine the matter.

  • Starbucks announced on Wednesday that Mellody Hobson will be the next non-executive chair of the company’s board, as the coffee chain moves closer to its goal of increasing diversity among its leadership. One of the most senior Black women in finance, Ms. Hobson has served on the board for 15 years and will step into the new role in March. She will replace Myron Ullman III, who has served as chair since 2018 and is retiring.