What becomes of Times Square when you take away hundreds of thousands of cheering, shivering New Year’s Eve revelers? It may no longer be the…
Nearly 714,000 people filed initial claims for state unemployment insurance, compared with 836,000 in the prior week, before statistical adjustments. With seasonal swings factored in, the figure was 712,000, a drop of 75,000, the Labor Department reported Thursday.
The decline came after two consecutive weekly increases, though the level of claims remained at levels unseen in previous recessions.
Almost 289,000 new claims were tallied under the Pandemic Unemployment Assistance program, which provides support to freelancers, gig-workers, the self-employed and others not ordinarily eligible for unemployment insurance.
Pandemic Unemployment Assistance is one of two emergency federal jobless benefit programs set to expire at the end of the month. Millions will be scrambling to make up for the lost funds, even as the absence of those dollars in consumers’ pockets dampens overall economic growth.
Republicans and Democrats on Capitol Hill continue to spar over the size of any new stimulus package, with G.O.P. leaders opposed to the kind of multitrillion-dollar relief effort envisioned by Democrats.
The prospect of vaccines to combat the virus is a hopeful long-term signal, but the economy will face serious challenges until inoculations can begin on a mass scale in the spring, said Michael Gapen, chief U.S. economist at Barclays.
He is looking for a U.S. economic growth rate near zero in the first quarter, followed by a rebound later next year as consumer spending picks up.
“I think the economy is on a solid footing, but we may just hit a couple of bumps between now and the end of the first quarter,” Mr. Gapen said. “Stimulus would be helpful, of course.”
Independent economists overwhelmingly favor the passage of more stimulus money before the end of the year — and the prospects for such a bill seem to be improving.
Democratic leaders in Congress yesterday signaled their openness to a bipartisan $908 billion stimulus package. Democrats would prefer a bigger package, like the $3 trillion bill that the House passed in May. But House Speaker Nancy Pelosi and Chuck Schumer, the Senate Minority Leader, released a statement saying that the bipartisan plan should become “the basis for immediate bipartisan, bicameral negotiations.”
The next move is up to Mitch McConnell and other Senate Republicans, some of whom have previously supported a $500 billion bill. There are political reasons that both sides want to appear responsive to Americans’ economic pain: The Senate runoff elections in Georgia on Jan. 5 will determine which party controls the Senate.
The economy already seems to have slowed in recent weeks, as virus caseloads have risen. And the situation will probably worsen if Congress does not pass another stimulus. Many provisions enacted since the spring are set to end on Dec. 31. Among the effects:
About seven million freelancers, contract workers and other Americans who don’t qualify for traditional jobless benefits will lose their emergency aid. On average, it now equals $1,058 a month.
Close to five million more people who have been out of work for at least six months will also be cut off from aid — which now averages $1,253 a month. The usual limit on jobless benefits is 26 weeks, and a provision that extended it to 39 weeks is expiring.
A tax credit that has given more than 125,000 companies an incentive not to lay off workers will expire. Companies will also lose the ability to defer payroll taxes and take deductions for business losses.
Aid to state and local governments — $150 billion — will expire. Without more aid, those governments will likely need to make cuts to schools, police forces, health care and other programs.
Nearly two-thirds of the Swiss food giant’s emissions come from agriculture, where reducing emissions requires working with some 500,000 farmers and 150,000 suppliers. That’s more complicated than simply switching to renewable electricity or offsetting business travel (which Nestlé is also doing).
Mark Schneider, the company’s chief executive, spoke with the DealBook newsletter about how he won support from more than 290,000 employees — and how he will sell investors on paying now to meet a goal 30 years in the future.
Long-term investors see the net-zero pledge as “future-proofing the company,” Mr. Schneider said, especially as environmental laws become stricter and consumers increasingly seek climate-friendly products. For investors with shorter horizons, the pledge is “earnings neutral,” he added: Despite costing around $3.6 billion over the next five years, these investments will be financed by operational efficiencies and will, eventually, enable the company to “charge a premium for better products.”
“There is also a revenue upside,” Mr. Schneider said. “The margin is not going backwards.”
After announcing the targets with “great fanfare,” it will become “a matter of honor” to meet them, he said. Still, the executives making these commitments will probably have retired by 2050. To give the plan teeth, starting next year the company will tie part of its executive committee’s annual bonuses to quantifiable environmental factors. “We’re putting our money where our mouth is,” he said.
Nestlé made the net-zero commitment about six months before the pandemic, which has had two major effects on the pledge, Mr. Schneider said.
On the positive side, the urgency of addressing climate change has intensified. “People see what can happen if you wait too long, and that you better fight a problem early on and get a handle on it,” he said. And being confined at home has given people time “to think through what really matters,” he added.
On the negative side, the financial stimulus to rescue the global economy — which was necessary, Mr. Schneider emphasized — has left the world with huge, unexpected debts. That means less “leeway from the public point of view” to spend on measures like long-term greenhouse gas reductions.
More than five million companies received loans under the federal government’s signature relief program for small businesses, but a tiny fraction of those companies gobbled up vast sums of money, newly released data shows.
Detailed loan information released by the Small Business Administration showed that about 600 businesses received loans of $10 million, the largest available under the $523 billion Paycheck Protection Program. And a mere 1 percent of borrowers received more than a quarter of the total amount of money disbursed, The New York Times’s Stacy Cowley and Ella Koeze report.
The data is the first full accounting of how federal money was spent through the P.P.P., which offered struggling small companies forgivable loans to help them retain workers and keep up with bills.
The companies that received the maximum $10 million loan include dozens of restaurant chains including Black Angus Steakhouses, P.F. Chang’s, Legal Sea Foods and TGI Friday’s, which took advantage of an exception the restaurant industry lobbied for.
Prominent law firms like Boies Schiller Flexner, the high-priced firm run by David Boies, and Kasowitz Benson Torres, founded and run by President Trump’s longtime personal lawyer, Marc E. Kasowitz, also collected loans for $10 million.
The data also shows how inconsistently the S.B.A. disbursed money through the Economic Injury Disaster Loan, a still-running aid effort that offers companies and nonprofits low-interest loans directly from the government to help them rebuild their battered operations.
Two organizations received loans in early April for more than $500,000, the cap the agency set on the program later that month. The Jewish Community Center in Stamford, Conn., received $900,000 and the CWC Group, a chiropractic clinic in Bellevue, Wash., received $713,900.
More than 8,000 organizations got loans for $500,000, a limit that was later lowered to $150,000, where it has remained since May. The E.I.D.L. program, has distributed 3.6 million loans, totaling $194 billion, since the coronavirus crisis began — far more than the program had given out in its entire 67-year history.
After President Trump’s loss to former Vice President Joseph R. Biden Jr., more than 40 percent of Republicans who were polled for The New York Times said they expected their family to be worse off financially in a year’s time, up from 4 percent in October. Democrats expressed a rise in optimism — though not as sharp as the change in Republican sentiment.
The new polling, by the online research firm SurveyMonkey, reaffirms the degree to which Americans’ confidence in the economy’s path has become entwined with partisanship and ideology. In the days after the election, for the first time since Mr. Trump took office in 2017, Democrats and independent voters expressed higher levels of confidence in the economy than Republicans did, The New York Times’s Jim Tankersley and Ben Casselman report.
Here are some of the survey’s findings:
Democrats in November were nearly three times as likely as they were in October to say they expected good or very good business conditions in the country over the next year. They were more than twice as likely as they were in October to say they expected “continuous good times economically over the next five years.”
Republicans were actually more likely to say that they were doing well in November, compared to October. But nearly three in four said they expected “periods of widespread unemployment or depression” in the next several years, up from three in 10 in October.
Some of Mr. Biden’s proposals earn support from Republican voters. More than four in 10 Republicans support raising taxes on people earning more than $400,000 a year. Three-quarters of Republicans support a proposal to guarantee paid sick leave to workers during the coronavirus pandemic.
Big partisan shifts in confidence have become common following elections in recent decades. Republicans’ economic sentiment fell when Barack Obama was elected president in 2008, then soared when Mr. Trump was elected in 2016. Republicans’ self-reported confidence remained well above Democrats’ for the entire Trump administration, until the election caused the pattern to reverse again.
About the survey: The data in the article came from an online survey of 3,477 adults conducted by the polling firm SurveyMonkey from Nov. 9 to Nov. 15. The company selected respondents at random from the nearly three million people who take surveys on its platform each day. Responses were weighted to match the demographic profile of the population of the United States. The survey has a modeled error estimate (similar to a margin of error in a standard telephone poll) of plus or minus 2.5 percentage points, so differences of less than that amount are statistically insignificant.
Many homeowners at risk of foreclosure can breathe a little easier — for another month, at least.
The Federal Housing Finance Agency, the regulator that oversees federally-backed mortgages, said on Wednesday that single-family homeowners with loans backed by Fannie Mae or Freddie Mac will be protected from foreclosure through at least Jan. 31, 2021. The moratorium had been scheduled to expire at the end of this month.
People living in properties that either Fannie or Freddie has taken over because the owner couldn’t pay the mortgage also received relief: The regulator extended its moratorium on evictions as well.
“This extension gives peace of mind to the more than 28 million homeowners with an enterprise-backed mortgage,” said Mark Calabria, director of the Federal Housing Finance Agency, referring to the two so-called government-sponsored enterprises.
Fannie and Freddie, which buy many loans from lenders and package them into investments, are not the only government affiliated organizations that have enacted moratoriums for loans associated with their work. The Federal Housing Administration, which often insures loans to borrowers who put less money down, has a foreclosure and eviction moratorium through Dec. 31. A spokeswoman for the agency said it is assessing its next steps.
The regulator overseeing Fannie and Freddie said providing the pandemic-related relief to both borrowers and renters was already expected to cost $6 billion because of loan defaults, foreclosures and related losses. The one-month extension will add to that.
Wall Street was poised to open unchanged and European indexes drifted lower in another quiet day of trading Thursday.
The Stoxx Europe 600 index fell 0.4 percent. The CAC in France fell 0.4 percent and the DAX in Germany was 0.5 percent lower, while Britain’s FTSE 100 wavered between gains and losses. In Asia, the Nikkei 225 in Japan closed little changed, while the Hang Seng Index in Hong Kong rose 0.7 percent.
The S&P 500 has climbed less than 1 percent this week, after the index rallied nearly 11 percent in November, its best monthly showing since April, and one of its best months of the past three decades.
Initial claims for state unemployment benefits in the United States dipped last week, after rising for two consecutive weeks as a surge in virus cases prompted curfews and other social restrictions across the country. Nearly 714,000 people sought government assistance for the first time last week, highlighting the ongoing economic crisis and adding pressure on Congress to deliver a fiscal relief package soon, as President-elect Joseph R. Biden Jr. has urged.
In a sign of progress, top Democrats in Congress endorsed a $908 billion compromise stimulus plan on Wednesday proposed by a bipartisan group of moderate senators. It is far smaller than what they have previously proposed. The group called on Senator Mitch McConnell, the Republican majority leader, to restart negotiations.
Oil prices fell. West Texas Intermediate futures were down 0.6 percent to $44.99 a barrel. OPEC and other oil producing nations, including Russia, will meet later Thursday to work out whether they should continue with production cuts or increase output by two million barrels a day starting next month as they had previously agreed.