Welcome to the Weekly Scan. Here’s what we’re following for the week of August 10, 2020.
Make sure to check back as we update these stories.
Order up. President Trump signed executive orders extending unemployment benefits, and changing the structure of those benefits, on Saturday. The orders aren’t expected to have immediate effect since federal spending is decided by Congress. The executive actions would provide $400 per week to those who are unemployed, down from the $600 benefit that just expired. States would be required to pay 25% of the $400 stipend. The actions didn’t renew the suspension of evictions which also ended in July, but they did extend the pause on federal student loan payments through 2020. The president also included a temporary payroll tax reprieve, which would allow employees to defer on their Social Security and Medicare taxes through the end of the year. A payroll tax deferment was previously rejected by Congress.
- The takeaway: These executive orders came in response to Congress’ struggle to come to an agreement on another stimulus package. Democrats in Congress proposed a $3 trillion second stimulus package and Republicans responded with a $1 trillion proposal called the HEALS Act. But Congress failed to negotiate a deal that satisfied both sides. Democrats in Congress have expressed concerns over whether the president’s executive orders are legal. Additionally, the orders are expected to be a burden on states, which have lost significant tax income because of the pandemic.
TwitTok? Twitter is reportedly in early talks to potentially acquire the U.S. operations of video-creation and sharing app TikTok, which is owned by Chinese company ByteDance. President Trump signed an executive order on August 6th that will ban ByteDance from managing the U.S. side of TikTok after 45 days, or September 15, 2020. Privacy and security concerns regarding the app and its use of personal customer information have grown in recent months.
- The takeaway: The deadline of the ban is expected to put pressure on an acquisition of TikTok by an American company. Microsoft previously announced that it was attempting to make a deal to acquire the app. Microsoft, which is bigger and has more capital than Twitter, is still considered the front-runner in a deal with TikTok (which is valued at $50 billion).
Another jobs report. The July, 2020 jobs report showed that the U.S. added 1.8 million jobs in July, more than the projected figure of 1.48 million jobs. However, the number of added jobs fell from 4.8 million in June and 2.7 million in May. The unemployment rate fell to 10.2% from 11.1% in June and from the April peak of almost 15%.
- The takeaway: The unemployment rate is still significantly higher than it was in February, before the Covid-19 pandemic took hold. Before the pandemic, unemployment was the lowest it’s been in 50 years, around 3.5%. Despite the increase in jobs, the U.S. still has 13 million fewer jobs than it did in February as well.
Amazon is going to the mall. Amazon is reportedly in talks with Simon Property Group to take over spaces in malls that were once used by J.C. Penney and Sears to use them as fulfillment centers. Amazon is also reportedly exploring the idea of renting out space once used by J.C. Penney for its grocery store business.
- The takeaway: This move would be the latest blow to the brick-and-mortar retail industry. Retail stores such as J.C. Penney have struggled to keep up with e-commerce businesses such as Amazon. J.C. Penney declared bankruptcy in May 2020, becoming one of several retailers to do so during the pandemic. Simon Property Group is joining forces with Brookfield Property Partners to make a bid for J.C. Penney.
Find out what we covered in last week’s Scan.