Welcome to the Weekly Scan. Here’s what we’re following for the week of May 18, 2020.
Make sure to check back as we update these stories.
A house divided. The House of Representative passed a $3 trillion relief package on Friday, May 15, which would provide an additional $1,200 in relief checks to U.S. consumers, and up to $1 trillion in aid to states that have suffered the most during the pandemic. The bill stands little chance of passing in the Senate, and President Trump said he would veto the legislation.
- The takeaway: The bill includes billions in rental and mortgage assistance, as well as money for election security, and a bailout for the U.S. postal service, which is on the verge of bankruptcy. Generally, these are popular items with Democrats, but not Republicans.
Penny pincher. J.C. Penney, one of the oldest retailers in the U.S., filed for Chapter 11 bankruptcy protection last week. The company, which has been suffering financially for years, is weighed down by increasing debt and weakening sales. It will attempt to reorganize by closing stores and boosting online sales. The retailer had sales of $11 billion for fiscal 2019, down 8% from fiscal 2018.
- The takeaway: J.C. Penney joins Neiman Marcus and J. Crew, both of which filed for bankruptcy protection in the last few weeks. Brick-and-mortar retailers have struggled for years as online retail sales has taken off, but they have particularly suffered recently as stores have shuttered due to Covid-19. Many have also struggled under massive amounts of debt from new private equity owners.
What Powell says. Federal Reserve Chairman Jerome Powell said on May 15, 2020 that the U.S. would experience a long and painful economic downturn without further, aggressive action from the federal government. The unemployment rate ticked up to nearly 15% last week, as 3 million more people filed jobless claims. Powell said approximately 40% of people earning less than $40,000 annually have lost their jobs since March, 2020.
- The takeaway: Additional federal stimulus programs are the subject of political debate, with differing views among the parties, about whether more stimulus is necessary. Congress passed a $2.2 trillion bailout program in March, 2020, which included direct financial assistance for most U.S. consumers, as well as aid for small businesses, and ailing industries like airlines.
Find out what we covered in last week’s Scan.