The GOP push for a so-called skinny emergency relief package ran into a wall of Democratic resistance in the Senate, “leaving the two parties without a clear path forward,” Erica Werner, Seung Min Kim and Tony Romm report. With Democrats united in opposition, “the vote was 52-47, far short of the 60 votes that would have been needed for the measure to advance.”
They write that “next steps — if any — toward the kind of bipartisan deal that would be needed to actually pass a bill to provide new assistance were unclear. Negotiations between congressional Democrats and administration officials have not restarted since collapsing in August.”
As Washington eyes weeks of inaction, the emergency grows more dire by the day for millions.
A fresh reminder of the ongoing economic crisis landed hours before the Senate deadlocked. The latest weekly jobless claims report found that 884,000 people filed for help, a number greater than what economists expected.
The weekly claims have drifted downward since peaking in March — but six months into the pandemic, they remain eye-popping. “The previous record for initial weekly claims was 695,000 from 1982, a level that the country has been above for more than five months,” Eli Rosenberg reports.
From Upwork chief economist Adam Ozimek:
Other measures show new and worrying weaknesses in the economic recovery. After rising since May, new job openings have been plateauing in recent weeks, real-time measurements from job sites show. “Some indicators, such as card use transactions, show that consumer spending, on things such as restaurants, gas, clothing and hotels, may be leveling off,” Rosenberg writes. “Data from the employee scheduling company Homebase showed that the recovery of small businesses, as measured by companies opening and employees working, flatlined from July through August, after a period of improvements.”
Compounding the straits for struggling workers and businesses, federal safety-net programs introduced to help them through the economic crisis are fraying. A $300 weekly unemployment benefit that some states chose to implement after President Trump’s executive order – to replace the $600 supplement that expired in July – will run out at the end of this week, Christopher Rugaber and Geoff Mulvihill of the Associated Press report. And millions of laid-off Americans are “nearing an end to their state unemployment aid.”
“Most Americans who exhaust their state’s unemployment benefits — typically after six months — will transition to an emergency federal program that provides an additional 13 weeks of aid,” they write. “Yet they still face a looming deadline: By year’s end, nearly all the federal unemployment supports will expire. Unless Congress extends those programs, millions of jobless Americans could be cut off.”
Back on Capitol Hill, finger-pointing has replaced negotiating.
House Democrats passed a $3.4 trillion relief package in May that Republicans dismissed as too expensive and loaded with unnecessary items. Talks between the two sides “never gained traction, in part because Senate Republicans struggled to unify behind a single plan in July,” the Post team reports. Senate Republicans deferred to the White House, but the administration’s negotiations with House Speaker Nancy Pelosi (D-Calif.) failed to reach an agreement.
“Democrats contended that the Senate GOP legislation, written without any Democratic input, was designed to fail and intended only to give Republicans cover for inaction,” my colleagues write. “Republicans argued that Democrats were refusing to agree to any new relief because they didn’t want to help President Trump or bolster the fragile economic recovery ahead of the election.”
Senate leaders sniped at each other Thursday. Senate Majority Leader Mitch McConnell (R-Ky.), speaking on the Senate floor, said “working families” wonder “whether Washington Democrats really care more about hurting President Trump than helping them through this crisis.” Senate Minority Leader Chuck Schumer (D-N.Y.) called the GOP package “a fairly transparent attempt to show the Republicans are doing something when, in fact, they want to do nothing in reality.”
Sell-off resumes as Dow closes 400 points lower.
Tech stocks continue to bear the brunt: “The Dow Jones Industrial Average closed 405.89 points lower, or 1.45 percent, at 27,534.58. Earlier in the session, the Dow was up more than 200 points. The S&P 500 slid 1.8 percent to close at 3,339.19. The Nasdaq Composite dropped 2 percent to 10,919.59 after surging as much as 1.4 percent. It was the fourth decline in five sessions for the major averages,” CNBC’s Fred Imbert and Jesse Pound report.
“Apple shares were down 3.3 percent after rising as much as 2.7 percent. Tesla, which was up more than 8% at one point, closed just 1.4 percent higher. Netflix and Microsoft were both lower along with Facebook and Amazon. Nvidia shares lost 3.2 percent. The S&P 500 tech sector dropped 2.3 percent.” (Amazon founder and chief executive Jeff Bezos owns The Washington Post.)
Hedge funds bought the dip: “Funds stepped up buying of technology shares during the Nasdaq 100’s first correction since March, once again warming up to the industry after trimming stakes,” Bloomberg News’s Lu Wang and Melissa Karsh report.
“Professional managers that make both bullish and bearish equity bets scooped up internet and software companies on Friday and Tuesday at the fastest rate in five months, according to data compiled by Goldman Sachs Group Inc.’s prime-brokerage unit. Meanwhile, hedge-fund clients at Morgan Stanley increased their exposure to growth and momentum stocks, styles dominated by tech companies, the firm’s data showed.”
Fed debates how to implement new strategy: “Central bank officials are likely at coming meetings to provide more specific guidance about what conditions would justify continued low interest rates. … They could also clarify that their purchases of Treasury and mortgage-backed securities, initiated in March with the stated goal of repairing market functioning, are being maintained now to support a faster economic recovery,” the Wall Street Journal’s Nick Timiraos reports.
“But officials’ remarks heading into their Sept. 15-16 meeting suggested they haven’t agreed on how far to go in refining any new guidance on their policy plans and whether to wait until subsequent gatherings in November or December to more fully reconfigure policy statements to reflect the new framework.”
From the U.S.:
- At least 6,366,000 cases have been reported; at least 188,000 have died.
- TIME’s new cover:
- North Dakota’s economy gets hit hard: “A recent surge in coronavirus cases is rekindling economic anxieties in North Dakota, where wildly fluctuating oil prices and recent drops in production threaten to leave the state’s finances in fresh disarray,” Tony Romm reports.
- Justice Department charges 57 people attempting to steal $175 million in relief funds: “Those charged include individuals who allegedly received money on behalf of fake companies; legitimate business owners accused of spending the funds on luxury items for themselves rather than paying employees; people who allegedly knew they weren’t eligible but applied anyway; businesses that allegedly double-dipped in a program meant to provide one loan per business; a former NFL player who allegedly submitted falsified documents,” Aaron Gregg reports.
- Covid may have been in the U.S. earlier than we thought: “The number of patients complaining of coughs and respiratory illnesses surged at a sprawling Los Angeles medical system from late December through February, raising questions about when the virus started spreading,” Ben Guarino reports.
From the corporate front:
- JPMorgan brass tells trading-floor staff to return to the office: “JPMorgan executives told senior employees of the bank’s giant sales and trading operation that they and their teams must return to the office by Sept. 21,” WSJ’s Julia-Ambra Verlaine reports. “The two executives said employees with child-care issues and medical conditions that make them more vulnerable to coronavirus complications can continue working from home.”
- American-Express extends its work-from-home policy through June 30 of next year. The company began a phased reopening of its New York and London offices this week. CEO Stephen J. Squeri said employees who can effectively work from home can opt out until at least the middle of next year.
- Kroger invested heavily on tech before the pandemic, but it wasn’t in the right area: “The nation’s biggest grocer has spent years — and hundreds of millions of dollars — investing in technology to give it a digital edge in the grocery business. But when the coronavirus changed customers’ buying habits overnight, the grocery chain wasn’t as ready for the online shift as some of its competitors,” WSJ’s Jaewon Kang reports.
- Peloton crushes estimates as sales surge 172 percent: “The fitness equipment maker also offered Wall Street an eye-popping outlook for the current quarter and fiscal 2021, with sales of its bikes not expected to slow down anytime soon,” CNBC’s Lauren Thomas reports. Shares were up nearly 8 percent in after-hours trading.
- Century 21 files for bankruptcy and will close all of its stores: The New York department store chain “has 13 stores mostly in New York City and the surrounding metropolitan area. As of Thursday, it had 1,400 employees. The company blamed the lack of payment on its business interruption insurance as the cause of its demise,” CNN Business reports.
- Disney expects to reopen just over half of its hotels by the end of the fiscal year, Reuters reports.
- LVMH says Tiffany’s handling of the pandemic invalidates merger: “The criticism of Tiffany expands on Moët Hennessy Louis Vuitton SE’s initial rationale for calling off its biggest acquisition ever. … LVMH said Tiffany’s first-half results and its outlook for 2020 ‘are very disappointing, and significantly inferior to those of comparable brands of the LVMH Group during this period,’” the Wall Street Journal reports.
Trump’s lead over Biden on the economy is faltering.
This has been one of the few bright spots in the president’s standing: “Trump for months has acted as if he had a clear edge over his eventual Democratic rival on the economy, promising a financial collapse if Biden were to win in November. For much of the summer, polls showed a solid lead for Trump on the economy. But there are signs that Trump’s advantage might be softening,” Heather Long and Jeff Stein report.
“Senior Biden campaign officials cheered a CNN poll conducted Aug. 28-Sept. 1 that showed Trump polling 49 percent on the economy and Biden 48 percent. It is a significant narrowing from CNN’s Aug. 12-15 poll that found Trump leading Biden on the economy 53 percent to 45 percent. Other nationwide polls show a similar closing of the gap on this key issue.”
- But there is a caveat: “Few polls ask consistently about who voters think can best steer the economy, making it difficult to assess how durable Biden’s apparent gains on the issue are. Some swing state polls still show voters giving Trump a clear edge on money matters.”
Trump makes “wildly inaccurate” claims about revitalizing the auto industry. In his rally outside Saginaw, Mich., on Thursday night, the president claimed “he has revitalized auto manufacturing in the state when it actually lost jobs even before coronavirus hit in March,” Dave Boucher and Todd Spangler of the Detroit Free Press report.
“Trump also said that after speaking with Japanese Prime Minister Shinzo Abe, officials announced ‘five new car companies are coming to Michigan,’ but there has been no such announcement that the Free Press is aware of … He also said no new assembly plants had been built in the state in more than 40 years but at least two new GM plants have opened since 1999.”
USMCA is better than NAFTA, Biden admits: “CNN’s Jake Tapper pushed Democratic presidential nominee Joe Biden on the Obama-Biden administration’s trade record and Trump’s renegotiation of NAFTA, pressing Biden into acknowledging that its replacement, USMCA, was an improvement,” Mediate’s Reed Richardson reports.
- The former vice president also claimed he could raise corporate taxes on day 1: Spoiler alert, he can’t. That would require congressional action, which means flipping the Senate and holding the House.
Biden’s new China policy looks a lot like Trump’s: “Whoever wins the presidential election, one thing is clear: The U.S. has turned a corner in its relations with China and is likely to maintain a harder line,” WSJ’s Jacob M. Schlesinger reports.
“Advisers to Democratic presidential candidate Joe Biden say they share the Trump administration’s assessment that China is a disruptive competitor. This suggests that even with an administration change in January, friction between China and the U.S. would remain high. Continued tension between the world’s two largest economies portends big shifts for global businesses as they rethink supply chains and technological systems in an increasingly divided world. It also would push allies into choosing between the two poles.”
Rick Perry worked to advance energy deals that would help his friends.
As energy secretary, Perry worked to cut deals in Ukraine: “Alongside this political mission, Perry and his staff at the Energy Department worked to advance energy deals that were potentially worth billions of dollars to Perry’s friends and political donors, a six-month investigation by reporters from Time, WNYC and ProPublica shows,” Simon Shuster and Ilya Marritz of Time report.
“If this long discussed deal succeeds, Perry himself could stand to benefit: in March, three months after leaving government, he owned Energy Transfer shares currently worth around $800,000, according to his most recent filing with the Securities and Exchange Commission. Perry appears to have stayed on the right side of the law in pursuing the Ukraine ventures. Federal prosecutors in the Southern District of New York (SDNY) questioned at least four people about the deals over the past year.”
Jane Fraser will break Wall Street’s glass ceiling.
Citigroup has tapped her to become the first woman to helm a major U.S. bank: “Citigroup chief executive Michael Corbat, 60, is set to step down from the board Feb. 1, 2021, the company said. … Fraser, 53, the president and chief executive of global consumer banking, was elected to the board of directors, effective immediately,” Hannah Denham reports.
“Corbat’s eight-year helm as chief executive and cumulative 37 years with the company spanned the nation’s recovery from the 2008 financial crisis and coronavirus recession. Under his leadership, Citigroup said, the bank’s net income nearly tripled, from $7 billion to roughly $20 billion. With Fraser, Citigroup will become the first of the nation’s six major banking institutions with a female leader.”
- Fraser’s rapid rise led to speculation this day might come: “Two years ago, CNN anchor Poppy Harlow asked Fraser whether she’d ever considered the position. Fraser noted that she’d seen a shift in Wall Street culture that could ease the way for female chief executives.”
Fixed mortgages tumble to another historic low: “The 30-year fixed-rate average, the most popular mortgage product, sank to its lowest level on record this week. It fell to 2.86 percent with an average 0.8 point this week, according to the latest Freddie Mac data. (Points are fees paid to a lender equal to 1 percent of the loan amount and are in addition to the interest rate.) It was 2.93 percent a week ago and 3.56 percent a year ago,” Kathy Orton reports.
“The 30-year fixed rate has not been this low since Freddie Mac began tracking mortgage rates in 1971. It surpassed the previous low of 2.88 percent, set last month. This is the ninth time since March that the 30-year fixed rate has fallen to a new record.”
Union organizing moves online: “Union organizing is typically an old-school art form of face-to-face engagement: one-on-one meetings and home visits, where organizers walk a delicate line between persistence and persuasion. But like so much else during the pandemic, that work has moved online, complicating what organizers say is a potentially promising time for organizing after the pandemic created new dangers in workplaces and revealed existing shortcomings in the treatment of workers in the United States,” Eli Rosenberg reports.