President Trump, struggling to gain traction among voters just weeks before the election, called on Thursday for a bigger stimulus package than he had previously offered, and the White House signaled it was willing to make concessions to Democrats. But the proposals were unlikely to win the necessary backing from Senate Republicans who are preparing a far smaller bill of their own.
White House negotiators have proposed a $1.8 trillion relief package. Mr. Trump said that he wanted one that was even bigger and suggested, without explanation, that China would pay for it.
“I would go higher,” Mr. Trump said during an interview with the Fox Business Network. “Go big or go home.”
The comments came after Mr. Mnuchin said that the White House was willing to make additional concessions to Speaker Nancy Pelosi of California in hopes of rekindling a stimulus deal before the election. But the $1.8 trillion package that he has proposed has already proven to be a non-starter with Senate Republicans who have panned it as too costly, making Mr. Trump’s call for a more expensive bill another complication in the already fraught negotiations.
Investors, who have been following the stimulus talks closely, seemed unmoved by statements from Mr. Trump and Mr. Mnuchin on Thursday, with stocks on Wall Street dropping for a third consecutive day.
The president suggested that Ms. Pelosi’s $2.2 trillion proposal was littered with Democratic priorities that his “pride” would not allow him to accept. However, he also undercut his own Treasury secretary for not being able to secure a larger agreement.
“So far he hasn’t come home with the bacon,” Mr. Trump said of Mr. Mnuchin.
The negotiations between the White House and Congress are expected to continue on Thursday, when Mr. Mnuchin and Ms. Pelosi are scheduled to speak.
Speaking on CNBC, the Treasury secretary said that he would agree to the language that Democrats had insisted on when it came to a coronavirus testing program and noted that the two sides had already agreed to spend an additional $75 billion on testing and contact tracing. The specifics of such a program have been an obstacle in the talks.
“We’ll fundamentally agree with their testing language, subject to some minor issues,” Mr. Mnuchin said. “We need to get money to the American public now.”
Mr. Mnuchin’s remarks came after the Labor Department reported that the number of new claims for unemployment benefits jumped to 886,000 last week.
But on Wednesday, Mr. Mnuchin acknowledged it would be difficult to pass and enact a deal in the next three weeks.
In the interview on CNBC, Mr. Mnuchin did not directly address the lack of support for a bill by Senator Mitch McConnell, the majority leader, suggesting that he has been briefed on negotiations between the White House and House Democrats while acknowledging that Senate Republicans prefer a more “targeted” relief bill.
But Mr. McConnell downplayed the prospects of a larger bill on Thursday.
“He’s talking about a much larger amount than I can sell to my members,” Mr. McConnell said about the president’s comments.
Negotiators have been locked in fruitless talks for months. On Thursday, Mr. Mnuchin assailed Democrats for letting politics get in the way of reaching agreement before the election, though Mr. Trump scuttled the talks himself when he said in a tweet last week that he had called off stimulus negotiations until after the election.
Mr. Mnuchin also called on Congress to give him the authority to repurpose approximately $300 billion in unused relief money from the legislation that was passed in March. He said he could begin getting that money into the economy this week.
The number of workers newly seeking unemployment benefits jumped last week, underscoring the U.S. economy’s lingering weakness and the lack of fresh stimulus from Washington.
The Labor Department reported Thursday that 886,000 people filed new claims for unemployment benefits last week, an increase of nearly 77,000 from the previous week. Adjusted for seasonal variations, the total was 898,000.
After dropping in late spring and early summer as pandemic-related lockdowns eased, new claims for state jobless benefits had been steadily totaling about 800,000 a week.
With coronavirus cases again on the rise and little prospect of a new federal aid package anytime soon, stocks were down Thursday for a third straight day.
“It’s discouraging,” said Ian Shepherdson, chief economist at Pantheon Macroeconomics. “We’re still stuck at a level of claims that’s far higher than it was during the worst of what followed the crash of 2008. The labor market appears to be stalled, which underscores the need for new stimulus as quickly as possible.”
New claims for Pandemic Unemployment Assistance, an emergency federal program that covers freelancers, self-employed workers, part-timers and others who don’t qualify for benefits under the regular unemployment system, were tallied at 373,000, down from 474,000. Most of the decline reflected an aberration in Arizona, which has been dealing with fraud issues in the program and reported no new claims.
The data do not include fresh figures for California, which has temporarily stopped accepting new unemployment applications to address a huge processing backlog and weed out fraud. Instead, the report incorporated the last weekly figures available.
The lack of fresh data from California makes it difficult to draw firm conclusions, but the latest numbers “point to a lot of churn in the labor market, and it appears the rate of firings has picked up,” said Michael Gapen, chief U.S. economist at Barclays.
Over the past month, large employers including United Airlines, Disney and Allstate announced tens of thousands of layoffs, and more are expected as sectors like leisure and hospitality struggle. In some states, restaurants have salvaged some business by serving diners outside, but many will lose that option as temperatures fall.
Despite the widespread economic pain, Republicans and Democrats in Washington have been unable to agree on a new relief package, a failure that may cause the economy to slow further in the coming months. Federal benefits created in March to supplement state payments to the unemployed are set to expire by the end of the year.
More and more Americans are relying on a federal program designed to help the jobless as state unemployment benefits run out.
The program, Pandemic Emergency Unemployment Compensation, was created by Congress in March to provide 13 weeks of aid when regular state unemployment benefits expire — typically after 26 weeks.
It has now been more than 30 weeks since unemployment claims spiked in March, when the pandemic first forced the economy into lockdown mode, so millions of unemployed Americans are starting to qualify for the extended benefits.
But getting on the rolls isn’t easy, experts say. “The transition from regular state benefits to P.E.U.C. is not going smoothly,” said Heidi Shierholz, senior economist and director of policy at the Economic Policy Institute, a left-leaning research group.
In some places, recipients of state unemployment benefits haven’t been notified of their eligibility for the federal extension, and aging computer systems have slowed the processing of applications.
Still, in the week that ended Sept. 26, the most recent period with available data, nearly 2.8 million people were getting Pandemic Emergency Unemployment Compensation benefits, a jump from fewer than two million the previous week. That increase was roughly equal to the decline in the number collecting state benefits.
The federal program is set to expire at the end of the year, and if it is not extended by Congress, “we’re going to see a disaster,” Ms. Shierholz said. “There will be a huge drop in living standards and an increase in poverty as well as downward pressure on economic growth.”
For those who qualify, the program has helped as they search for work.
Jared Gaxiola of Torrance, Calif., was laid off from his job as a freelance lighting technician in March, after live events were canceled across the country.
When Mr. Gaxiola’s state benefits ran out in mid-September, he was able to get a 13-week extension through Pandemic Emergency Unemployment Compensation.
Mr. Gaxiola, 35, hopes to find a job by the time the payments run out again in December. But with entertainment work still scarce, he worries about how he will pay his rent in the new year.
“I could probably borrow money from my sister if I needed to,” Mr. Gaxiola said. “But I really don’t want to have to do that.”
— Nelson D. Schwartz and
In a stark reminder that Americans continue to struggle during the pandemic, the Labor Department reported Thursday a surge in new claims for unemployment benefits last week, to 886,000 from nearly 77,000 the previous week, reports Gillian Friedman.
Despite the widespread economic pain, Republicans and Democrats in Washington have been unable to agree on a new relief package. Federal benefits created in March to supplement state payments to the unemployed are set to expire by the end of the year.
For many unemployed Americans, that means finding creative ways to make ends meet — by changing industries or even starting their own businesses.
Before the pandemic struck, Chloe Ezi was a lifeguard at a public aquatic center in Powder Springs, Ga. It was part-time work, at $11 an hour, but she was able to bring in an extra $300 a week by teaching private swim lessons.
In March, Ms. Ezi was sent home for three months when the aquatic center closed during coronavirus lockdowns. Because she continued to be paid half her wages — about $75 a week — the pool told her that she was not eligible to file for unemployment benefits.
Ms. Ezi, 19, was called back to work in May, but she was able to bring in only about $150 a week — barely enough to cover her $280 monthly car insurance bill, her $80 cellphone bill, and $100 monthly payments to Penn Foster College, where she is completing a dental assistant certificate program.
“That’s not a lot to live off of,” Ms. Ezi said. “I was zeroing out my paycheck every month.”
Ms. Ezi began looking for a job that would pay more. In August, she found a full-time position as a sales representative at a store that sells birding equipment.
Now she and her boyfriend, who have been living with his parents to save money, can afford to rent a one-bedroom apartment in Smyrna, Ga. They moved in on Wednesday.
“My new job allowed us to finally get our own place,” she said. “I’m feeling pretty proud of myself right now.”
For three years, Lea Polizzi worked more than 50 hours a week as a nanny and a freelance photographer in New York. But when the pandemic hit, the family she worked for on the Upper East Side left the city, and all of her photography gigs dried up.
Ms. Polizzi, 24, filed for unemployment benefits and started receiving about $200 a week from the state, as well as a $600 federal supplement. Those payments enabled her to meet expenses — including the $1,100 rent for her apartment in the Bushwick neighborhood of Brooklyn — while she looked for a job.
But the $600 payments expired at the end of July. Ms. Polizzi recently received $900 from Lost Wages Assistance, a short-term supplement from the federal government, and she expects one more payment from the program in the next few weeks.
In the meantime, she has taken matters into her own hands. She is making masks, lingerie, hats and jewelry and selling the items online at $25 to $200 apiece.
She has made about 60 sales. “Hopefully, I’ll be able to make it work and just pay all my bills through my art ventures,” she said.
Businesses in Paris and London are facing fresh restrictions aimed at curbing the soaring rate of coronavirus infections in their countries, but which also threaten efforts to revive their economies.
In France, President Emmanuel Macron on Wednesday evening announced a one-month curfew on Paris and other major cities starting Saturday. The curfew, which will affect a third of the population, requires people to shelter indoors from 9 p.m. to 6 a.m. and will be enforced by 12,000 police.
The move is expected to deal a fresh blow to France’s restaurant and tourism industries, which make up nearly 10 percent of economic activity.
“This decision amounts to a re-closing of our establishments and has serious consequences for the hotel, cafe and catering sector, already hard hit by this crisis,” unions representing those sectors said in a statement.
To cushion the blow, the government said it would grant up to 1 billion euros in financial aid to affected businesses, including restaurants and hotels struggling because of the restrictions, and extend through next summer an offer of cheap state-backed loans that were slated to end in December. The state will also direct money to theaters and other culture operations that can’t function under the new measures.
The French government also is encouraging people to continue taking vacations in France and to stay at hotels.
French leisure and tourism stocks fell, with the hotel group Accor closing more than 5 percent lower, and Air France 1.9 percent lower Thursday.
The British government, which last month ordered restaurants and pubs to shut at 10 p.m., is trying to control a second wave of infections using a system that puts local districts into one of three tiers where measures become increasingly severe. Liverpool, a large city in the north of the country, is already under the strictest, where pubs and bars are closed and households cannot socialize with others. The government provides extra aid in Tier 3 communities to businesses forced to close.
On Thursday, London was raised to the middle tier — meaning people from different households will be barred from meeting indoors, and people will also be discouraged from using public transportation.
The new restrictions came after the government published data that showed the country’s jobless rate had already climbed to a three-year high and there were a record number of layoffs in August, adding to concerns that Britain will experience a sharp rise in unemployment this winter
As in France, hospitality and travel industries were hit particularly hard by the impact of the new restrictions. Shares in Marston’s, a large chain of bars and pubs in Britain, fell as much as 8 percent and the company said it was looking to cut 2,150 jobs that are currently furloughed.
InterContinental Hotels Group, a British hospitality company, saw its stock fall about 3 percent. Ryanair shares lost 4.3 percent after the airline said on Thursday it would fly only 40 percent of its usual capacity this winter, down from previous plans for 60 percent.
— Liz Alderman and
Stocks slipped on Thursday, as earnings reports and new economic data reminded investors of the challenges that companies and workers face amid a second wave of coronavirus cases. New restrictions were imposed in London, and a curfew was put into effect in Paris and other French cities.
Share prices for airlines and other travel companies, already battered this year, fell as the tightening European rules cast a shadow over travel and spending in the coming holiday season.
On Wall Street, the S&P 500 fell 0.15 percent, after steadily recovering from an early loss of more than 1 percent. The drop in European markets was steeper, with the Stoxx 600 Europe down more than 2 percent.
The drop came even as Treasury Secretary Steven Mnuchin said on Thursday that the White House was willing to make additional concessions to Speaker Nancy Pelosi of California in hopes of rekindling a stimulus deal before the election, while President Trump said he would agree to a larger bill than the White House had already proposed.
Mr. Mnuchin had dampened sentiment in the markets Wednesday by cautioning that he did not expect a relief package before the Nov. 3 election, and his hopeful comments on Thursday were undermined by Senator Mitch McConnell, who downplayed the prospects of a larger bill.
Also on Thursday, data from the Labor Department showed that new state unemployment claims jumped last week to nearly 900,000, a figure that highlights the fact that employers continue to shed workers at a staggering rate.
The slide in markets on Thursday is “linked to spikes in coronavirus cases and fears that regional lockdowns will subdue the economic recovery,” said Susannah Streeter, an analyst at Hargreaves Lansdown. “We are seeing fresh losses for airlines and travel stocks.”
Shares of European airlines, Lufthansa and easyJet, fell sharply. Ryanair tumbled it said it would fly only 40 percent of its usual capacity this winter, down from previous plans for 60 percent.
On Wall Street, United Airlines dropped after the company said it lost $1.8 billion in the three months through September.
— Eshe Nelson and
Americans used one-time stimulus checks they received from the federal government early in the pandemic to pad their savings accounts and pay off debt, new research from the Federal Reserve shows.
Households spent just 29 percent of the money they received earlier this year, the Federal Reserve Bank of New York said in a post on its website, citing its Survey of Consumer Expectations, conducted in June and August. Another 36 percent of the cash was saved, while 35 percent was used to pay down debt.
Americans adults who qualified for the stimulus received up to $1,200 each, with an extra $500 added per child in the household. Out of the Fed’s sample, 89 percent of households received money.
Poorer families and those who lost jobs or income amid the pandemic were more likely to use their money to pay down debts, while richer families saved the money.
“The economic impact payments, by increasing both household income and the debt pay down, contributed importantly to the sharp increase in the overall saving rate during the early months of the pandemic,” the central bank’s researchers wrote in the post.
Several factors might have been behind the relatively low spending and high saving. People were unsure when the economic crisis would clear up, the researchers wrote, and might have been acting cautiously. They were on lockdown, which might have limited opportunities to spend, and some rent payments — which count as consumption — were delayed.
The trends seem unlikely to change if new aid becomes available: In the August survey, the New York Fed asked what households might do if they received another $1,500 check. Respondents expect to spend even less of that money, about 24 percent.
The newfound savings buffer cushioned the blow as expanded unemployment insurance expired. Consumer spending has held up even though millions remain unemployed but are no longer receiving an extra $600 per week from the federal government.
“We’re still benefiting from the stimulus,” Randal K. Quarles, vice chair for supervision at the Fed, said during an event on Wednesday, noting that it makes it harder to guess what will happen to the economy once that tailwind fades.
Poverty has returned to levels higher than before the coronavirus crisis, two new studies have found. The number of poor people has grown by eight million since May, according to researchers at Columbia University, after falling by four million at the beginning of the pandemic as a result of the $2 trillion emergency package known as the Cares Act. Using a different definition of poverty, researchers from the University of Chicago and Notre Dame found that poverty has grown by six million people in the past three months, with circumstances worsening most for Black people and children.
Shares in Big Hit, the management company behind the Korean boy band BTS, skyrocketed on their first day of trading in South Korea on Thursday, as investors rushed to get a piece of one of the world’s biggest musical acts. The stock opened at 270,000 won, or about $235, double the company’s offering price of 135,000 won, and was up 30 percent, the daily limit, in early trading. By day’s end, the stock was down over 4 percent from its opening price, with the company’s value settling at around 8.7 trillion won, or about $7.6 billion, by the market’s close.
Wells Fargo has found evidence that some employees filed fraudulent applications to get money from a Small Business Administration relief program supporting companies dealing with coronavirus lockdowns, according to an internal memo. The memo said the employees had created fake profiles to file for money from the Economic Injury Disaster Loan program. “We have terminated the employment of those individuals and will cooperate fully with law enforcement,” the bank’s head of human resources, David Galloreese, wrote in the memo, which was posted on an internal website on Wednesday.
United Airlines lost $1.8 billion in the three months through September, with operating revenue down 78 percent compared with the same period in 2019. The airline said it ended September with more than $19 billion in cash and other available liquidity, boosted by a large debt offering backed by its mileage program and the ability to borrow $5.2 billion from the Treasury Department.
Morgan Stanley was the latest Wall Street bank to report a jump in earnings for the three months through September, helped in large part by an upswing in trading revenue.
Profit rose 25 percent to $2.72 billion over the same period last year, the bank said on Thursday. Revenue rose 16 percent to $11.66 billion.
As U.S. markets rallied during the quarter, revenue from the bank’s trading business rose 19 percent from the same period last year. Gains from loans held for sale as part of Morgan Stanley’s corporate lending activity also rose substantially.
Still, in what could be interpreted as a sign of optimism over the health of the corporate economy, Morgan Stanley’s provision for credit losses on loans and lending commitments was less than half of what it was in the previous quarter.
Morgan Stanley’s chief executive, James P. Gorman, said in a statement that the quarter was characterized by “consistent, high returns.” He predicted that the completion of his bank’s acquisition of the trading company E*TRADE and its recently announced purchase of Eaton Vance would position Morgan Stanley well for future growth.
Randal K. Quarles, the Federal Reserve’s vice chair for supervision, said on Thursday that the Fed and other regulators needed to look into what could be done to insulate the Treasury market after broad market turmoil in March caused it to jam up.
“We have to ask: What can be done to improve Treasury market functioning over the longer term so that this market can withstand a large shock to demand or supply?” Mr. Quarles said in remarks prepared for delivery to the Institute of International Finance.
In March, a mismatch between Treasury buyers and sellers amid widespread financial stress prompted the Fed to jump into the market, buying huge quantities of bonds and taking other measures to soothe conditions.
The Treasury market may have grown so large — swelled by debt issuance to fund America’s spending — that it has outpaced its ability to cope with periods of stress without help, Mr. Quarles, an expert on financial markets and the top regulatory official at the Fed, said during a question-and-answer session on Wednesday. It could be that “the sheer volume there may have outpaced the ability of the private market infrastructure to support stress of any sort there,” Mr. Quarles said.
That would be a major issue for financial regulators and financial market participants alike. The Treasury market is among the deepest and most liquid in the world — meaning that money invested in U.S. government bonds is expected to change hands easily and with little risk. Treasuries are used as the backbone for many other markets.
It also raised the prospect that the Fed might need to remain active in the market permanently, something that Mr. Quarles said on Wednesday that he had not yet concluded. The mere fact that he raised it, though, is a substantial statement. Just a decade ago, critics regularly blasted the Fed for large-scale Treasury purchases.
Mr. Quarles also highlighted on Thursday that short-term funding markets, including ones closely interlinked with Treasury markets, experienced widespread strain in March. “It is worth asking whether there may be other steps needed to secure these very important sources of liquidity,” he said.