On The Money: 3.8M more Americans file for unemployment benefits | Stocks cap off best month since 1987 even as coronavirus leaves millions jobless | Pelosi floats almost $1T for states in next relief package
Happy Thursday and welcome back to On The Money. I’m Sylvan Lane, and here’s your nightly guide to everything affecting your bills, bank account and bottom line.
THE BIG DEAL — 3.8 million more Americans file for unemployment benefits: Initial unemployment claims reached a seasonally adjusted total of 3.8 million last week, the sixth straight week that millions of Americans filed new applications as the coronavirus pandemic wreaks havoc on the economy.
- The new figure brings the six-week total of new claims to more than 30 million, by some estimates one-fifth of the entire American workforce.
- The Congressional Budget Office projected that the unemployment rate could peak at 16 percent this quarter and that average unemployment would remain above the Great Recession–level high of 10 percent through 2021.
- Others are projecting even higher levels, akin to the Great Depression.
Some analysts are hoping that once the initial lockdowns end, a combination of new treatments, testing and contact tracing will help the economy reopen and get people back to work. The Hill’s Niv Elis explains here.
While the economy continued to hemorrhage jobs, the stock market recovered steadily from its crash at the start of the pandemic, marking its best month in more than 30 years.
- While the S&P index fell less than 1 percent on Thursday, it rose a total of 12.7 percent in April for its best one-month gain since 1987.
- The Dow Jones Industrial Average fell nearly 300 points Thursday, but also boasted its best month since 1987 with a 11-percent rise.
- The Nasdaq composite also surged more than 15 percent for its best month since 2000.
“A lot of this likely reflects what appears to be a pretty solid floor put under the market by the kind of fiscal and monetary policy response not seen in any previous crisis,” wrote JJ Kinahan, chief market strategist at TD Ameritrade, in a Thursday research note.
“Congress and the [Federal Reserve] arguably deserve a lot of the credit for this incredible turnaround. Hopes for a virus treatment also play into the April optimism,” he continued.
LEADING THE DAY
Pelosi floats almost $1T for states in next relief package: Speaker Nancy Pelosi (D-Calif.) said Thursday that Democrats will push for including almost $1 trillion in the next coronavirus relief package to help states and local governments hit hard by the pandemic.
That figure, Pelosi said, would likely be the single largest line-item of the Democrats’ next emergency package, known as CARES 2, which is also expected to include hundreds of billions of dollars more to help workers, businesses and families weather the crisis.
“We’re not going to be able to cover all of it, but to the extent that we can keep the states and localities sustainable, that’s our goal,” Pelosi told reporters in the basement of the near-deserted Capitol.
The road ahead:
- It means the Democrats’ next emergency relief proposal is likely to approximate the massive size of the initial CARES Act, adopted March 27, which provided $2.2 trillion in emergency help to counter the economic fallout of the pandemic.
- It also foreshadows a fierce fight with Republicans in the Senate, where GOP leaders had rejected any new funding for state and local governments in the last “interim” coronavirus bill and are wary that any new help for states going forward would simply bail out governors for fiscal mismanagement preceding the health crisis.
The Hill’s Mike Lillis tells us more here.
Fed’s expanded lending program opens funding to oil and gas industry: Changes to a new lending program from the Federal Reserve have paved the way for the oil and gas industry to get government financing amid the pandemic.
The expanded criteria to qualify for the soon-to-be-opened Main Street Lending Program follows requests from Sen. Ted Cruz (R-Texas) and an industry group for small and mid-sized oil producers who said financing was needed to save the industry from bankruptcy.
- Companies with 15,000 employees or $5 billion in annual revenue will now qualify, up from 10,000 employees and $2.5 billion in revenue. The minimum loan size ranges from $500,000 to $1 million — a move designed to make the program accessible to both small and medium-sized businesses.
- But the potential for oil companies to benefit from the loan program has irked many Democrats, some of whom fought to ensure no coronavirus stimulus funds would go to fossil fuel companies. These efforts included blocking $3 billion in funds requested by the Trump administration to buy oil for the Strategic Petroleum Reserve.
The Hill’s Rebecca Beitsch has more here.
GOOD TO KNOW
- House Republicans are pushing back on the idea of providing a minimum guaranteed income to Americans amid the financial fallout of the coronavirus pandemic.
- The European Central Bank announced Thursday that it will essentially pay banks to lend money as it works to blunt a sharp economic decline fueled by the coronavirus pandemic.
- Macy’s is planning to reopen 68 stores in the U.S. on Monday as the beginning of its reopening process, the company announced Thursday.
- Reuters: “Wells Fargo, the largest U.S. mortgage lender, said on Thursday it will temporarily stop accepting applications for home equity loans given the economic uncertainty fueled by the COVID-19 pandemic.”
- Walmart announced Thursday that it has hired 200,000 workers across the U.S. amid the coronavirus outbreak.
- Nearly 900 workers at a Tyson Food plant in Indiana have reportedly tested positive for COVID-19.
ODDS AND ENDS
- Amazon is hitting the Trump administration after some of its foreign websites were included in an annual report on “notorious markets” for counterfeit foreign goods.
- Op-Ed: Johanna Bozuwa and Peter Gowan, researchers at the Democracy Collaborative, ask Congress to respond to a “massive housing and utility crisis” facing Americans who can no longer afford to pay their bills.