Welcome to the Weekly Scan. Here’s what we’re following for the week of August 17, 2020.
Make sure to check back as we update these stories.
Shopping spree. Retail sales, which include purchases at service stations, stores, restaurants, and online, increased 1.2 percentage points in July 2020, compared to June, according to the Department of Commerce. July sales also surpassed those from February, before the Covid-19 pandemic hit the U.S. economy. Sales in July were 1.7 percentage points higher than sales in February. Restaurant sales and sales of health products, electronics, and appliances reportedly contributed to the growing retail numbers.
- The takeaway: Despite these promising sales numbers, unemployment remains significantly higher than it was before the pandemic, at 10.2% as of July, 2020. Meanwhile, the $600 weekly stipend for unemployed Americans expired at the end of July, which could affect consumer spending.
Mail mayhem. The House of Representatives’ Committee on Oversight and Reform is planning to convene on August 24th in the middle of Congressional recess, to deal with growing concerns over the Trump administration’s handling of the U.S. Postal Service (USPS). The USPS, led by Postmaster General Louis DeJoy, has reportedly started removing hundreds of mail-processing machines and suggested that 46 states may not be able to process mail-in ballots in time for the 2020 presidential election. The USPS has also cut operating hours in many states and overtime for postal workers.
- The takeaway: These changes at the USPS come after President Trump cast doubt on the legitimacy of mail-in ballots and suggested that they could contribute to voter fraud, without any evidence to support the claim. But mail-in voting is likely to be more popular during the upcoming election as voters avoid going to the polls because of the Covid-19 pandemic. Democrats in Congress have suggested that the President is attempting to suppress voters across the country before the election.
Tesla splits. Electric carmaker Tesla announced a 5-for-1 stock split last week. This split means that investors will get four shares of Tesla stock for each one that they own. Tesla’s announcement comes weeks after Apple announced its own 4-for-1 stock split. The split will go into effect for those who are already invested in Tesla on August 21, 2020. The stock will start trading at the split-adjusted price after August 31, 2020.
- The takeaway: The decision to split Tesla’s stock is reportedly an effort to make the stock more accessible and affordable for investors. Tesla was trading at about $1,550 per share as of August 14, 2020. Keep in mind that a stock-split doesn’t necessarily mean that the same growth will follow.
Your Uber may not arrive. Ridesharing apps Uber and Lyft suggested that they might halt service in California this week in response to a court order demanding that the companies classify their drivers as employees within 10 days in accordance with the law AB-5. Drivers have previously been classified as independent contractors, allowing Uber and Lyft not to offer benefits such as minimum wage, overtime pay, unemployment insurance, and more to their drivers. Uber and Lyft are hoping to delay reclassifying their workers until a referendum vote in November that could exempt the companies from reclassification if passed.
- The takeaway: The threat to halt service is reportedly intended to motivate customers to push back on the law. However, some experts have questioned this strategy since business has declined for ridesharing apps as a result of Covid-19 shutdowns.
Find out what we covered in last week’s Scan.