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The Trump administration is expected to announce on Thursday that it will provide $14 billion in additional aid to American farmers, many of whom are suffering economically from the coronavirus, according to a person familiar with the plans.
President Trump is expected to mention the aid during a campaign event in Wisconsin on Thursday evening. The details of how the latest tranche of money will be deployed are expected to be announced Friday morning.
This would be the second round of aid that the Trump administration delivered to farmers out of the money and borrowing authority that was approved to support the agriculture sector in the economic relief legislation passed by Congress in March. In April, the Agriculture Department announced a $19 billion aid package to help farmers cope with supply chain disruptions and lost business from hotels and restaurants as a result of stay-at-home orders.
Farmers were already struggling with the lingering effects of Mr. Trump’s trade war with China. After initial concerns about food shortages, many farmers have been dealing with a glut of unused food and crops. Some have resorted to dumping milk in manure pits, burying onions or plowing ripe vegetables back into soil.
Mr. Trump has made accommodating farmers a campaign priority, as his most ardent supporters reside in rural America.
To help soften the blow of his trade fight with China, Mr. Trump in March approved $23 billion in subsidies to farmers who had lost business as a result of retaliatory tariffs or other trade-related issues.
A report from the Government Accountability Office that was released this week raised questions about how some of that aid was distributed. The report from the nonpartisan agency suggested that a disproportionate amount of money went to farmers in southern states and that small farms received less generous payments than big agribusinesses.
Goldman Sachs is now the latest Wall Street firm to identify coronavirus cases among its ranks.
In recent weeks, as more workers have returned to the firm’s downtown Manhattan headquarters, two Goldman employees have tested positive for the virus, according to a company official. One works in one of the firm’s revenue producing businesses and the second is employed in its back-office division, known internally as “the federation.” The two workers sit on different floors.
The cases at Goldman, which company officials believe came from exposure outside the office, come just days after JPMorgan Chase sent workers home after they came in contact with a stock-division employee who was confirmed to have the virus.
Like JPMorgan, Goldman has recently encouraged more workers to return to the office this fall. Its tower at 200 West Street, which typically houses about 8,000 workers, is now at about 15 percent capacity, said a company official. More are expected to flow back starting Oct. 5, at which point Goldman will begin a two-team work schedule in which no more than half its returning workers are in the office during any given week to ease social distancing.
“Our people’s safety is our first priority and we are taking appropriate precautions to make sure our workplaces remain safe for those who choose to return,” said Leslie Shribman, a Goldman spokeswoman.
Initial weekly state unemployment claims
By Ella Koeze·Not seasonally adjusted. Does not include claims made under the Pandemic Unemployment Assistance program.·Source: Labor Department
New claims for state unemployment insurance fell last week, but layoffs continue to come at an extraordinarily high level by historical standards.
Initial claims for state benefits totaled 790,000 before adjusting for seasonal factors, the Labor Department reported Thursday. The weekly tally, down from 866,000 the previous week, is roughly four times what it was before the coronavirus pandemic shut down many businesses in March.
On a seasonally adjusted basis, the total was 860,000, down from 893,000 the previous week.
“It’s not a pretty picture,” said Beth Ann Bovino, chief U.S. economist at S&P Global. “We’ve got a long way to go, and there’s still a risk of a double-dip recession.”
The situation has been compounded by the failure of Congress to agree on new federal aid to the jobless.
A $600 weekly supplement established in March that had kept many families afloat expired at the end of July. The makeshift replacement mandated by President Trump last month has encountered processing delays in some states and has funds for only a few weeks.
“The labor market continues to heal from the viral recession, but unemployment remains extremely elevated and will remain a problem for at least a couple of years,” said Gus Faucher, chief economist at PNC Financial Services. “Initial claims have been roughly flat since early August, suggesting that the pace of improvement in layoffs is slowing.”
New claims for Pandemic Unemployment Assistance, an emergency federal program for freelance workers, independent contractors and others not eligible for regular unemployment benefits, totaled 659,000, the Labor Department reported.
Federal data suggests that the program now has more beneficiaries than regular unemployment insurance. But there is evidence that both overcounting and fraud may have contributed to a jump in claims.
Blue Bell Creameries must pay $17.25 million in criminal penalties for shipments of contaminated products linked to a 2015 listeria outbreak, a federal court in Texas declared on Thursday.
The fines constitute the largest-ever criminal penalty following a conviction in a food safety case and are consistent with the terms of a plea agreement filed previously in the case, according to the Department of Justice.
Blue Bell, based in Brenham, Texas, pleaded guilty in May to two misdemeanor counts of distributing adulterated ice cream products. Prosecutors in the case charged that the company dispensed products that were manufactured under unsanitary conditions and contaminated with listeria monocytogenes, a bacteria that causes an illness that can be life-threatening.
“American consumers must be able to trust that the foods they purchase are safe to eat,” Jeffrey Bossert Clark, an acting assistant attorney general, said in a statement. “The sentence imposed today sends a clear message to food manufacturers that the Department of Justice will take appropriate actions when contaminated food products endanger consumers.”
In April, Chipotle Mexican Grill agreed to pay a $25 million fine — the largest food safety penalty on record — to resolve criminal charges accusing the company of serving contaminated food from 2015 to 2018 that made over 1,100 people sick. The agreement allowed the company to avoid conviction if it complied with an enhanced food safety program.
Walmart, the nation’s largest private employer, said on Thursday that it was raising wages for 165,000 of its workers, as it revamps leadership roles in its stores.
The pay increases, which will affect about 11 percent of the company’s United States employees, come as Walmart is undergoing a transformation to be a more digitally focused retailer and seeks to reward and retain its more skilled workers.
The starting wages for bakery and deli employees will increase to $15 an hour from $11 an hour, while pay is also being raised by $1 an hour for many employees in the company’s auto car centers.
The pay raises do not extend to all of Walmart’s huge work force, but they will no doubt be carefully watched across the broader labor market because the giant retailer sets the benchmark for lower-wage workers.
The company also announced that it was replacing certain roles in the stores such as assistant managers and department managers with new management roles with broader responsibilities.
Pay for these new “team leader” roles will range from $18 to $21 an hour and can go up to $30 an hour, Walmart said.
A $300 weekly supplement to unemployment payments is starting to reach recipients, but it won’t be any help to the newly jobless.
The program, Lost Wages Assistance, was created last month by President Trump with federal disaster funds after Republicans and Democrats were deadlocked on a relief bill. The payments — half the amount of a federal supplement that expired at the end of July — are retroactive to the week that ended Aug. 1. But officials said there was money for no more than six weeks, so states have been told that the coverage ended Sept. 5.
More than 30 states have begun paying benefits, but “it’s kind of a zombie program,” said Michele Evermore, senior researcher and policy analyst at the National Employment Law Project, a worker advocacy group.
“Every state seems to be doing it differently,” she added, with some paying an $1,800 lump sum to cover six weeks after getting off to a late start. Only South Dakota declined to apply for the funds.
People who qualify for at least $100 a week in unemployment benefits — through regular state programs or a federal pandemic assistance program — are eligible for the extra funds. According to Federal Emergency Management Agency guidelines, they must certify that disruptions caused by the pandemic made them fully or partly unemployed.
Ms. Evermore said that requirement had proved to be a hurdle. “People don’t know why they are being asked,” she said, “and there’s a reluctance to answer if they were already getting regular unemployment insurance.”
As with the earlier supplement, overwhelmed computer systems have added to delays. Colorado was set to begin making payments this week, but its certification process briefly froze because of demand, news reports said.
The largest surge by far in new claims filed under the federal Pandemic Unemployment Assistance program last week was in Arizona, a development that officials there attribute to an increasing problem across the country: fraud.
The Labor Department reported more than 165,000 initial claims in Arizona under the program, an increase from 101,000 the week before. Both weeks, only California — which has also reported widespread fraud — had a higher tally.
“We are reviewing over one million P.U.A. claims for likely fraudulent activity,” Brett Bezio, deputy press secretary of the Arizona Department of Economic Security, said in an email. To put the number in perspective, he pointed out that the state had received nearly 2.7 million jobless claims, which represents 80 percent of Arizona’s work force. In July, the state’s unemployment rate was 10.6 percent.
The pandemic assistance program, part of the $2.2 trillion CARES Act passed in March, was meant to deliver benefits to workers normally ineligible for state unemployment insurance, including freelancers and the self-employed. The program has provided a lifeline to millions, but it has been vulnerable to abuse because it has fewer verification checks than regular state programs.
Several states say sophisticated criminal rings are using personal information harvested from wide-scale security breaches.
Mr. Bezio said Arizona was working with data analytics companies, financial institutions, as well as state and federal agencies, to review and authenticate applications. By mid-August, he said, the state had approved 90,000 Pandemic Unemployment Assistance claims, and it is processing an additional 5,000 that it found legitimate.
Stocks on Wall Street dropped on Thursday, a decline led by technology stocks, extending a slump that began the day before after the Federal Reserve said it would need to keep rates near zero for years to ensure an economic recovery, but noted that more immediate action needed to come from Washington.
The S&P 500 fell nearly 1 percent. Large-cap tech stocks, which have carried the market for much of its recovery since March, lagged on Thursday. Amazon, Apple and Microsoft were all lower.
The retreat came even as new claims for unemployment benefits in the United States declined last week, government data showed. But at 860,000 on a seasonally adjusted basis, the reported number of claims was slightly higher than economists had expected.
“Market participants have seemingly refocused on the cautious characterization of the economic recovery by the Fed and repeated calls for fiscal stimulus, which, despite a burst of optimism yesterday, does not appear imminent,” analysts with BMO Capital Markets wrote in a note to clients Thursday.
The Federal Reserve said Wednesday that the economy continued to show weakness, and that policymakers would keep interest rates very low through at least 2023. But with interest rates already near zero, the central bank’s chief again said that the kind of direct spending that only Congress can authorize would be needed to help the economy continue its recovery.
“My sense is that more fiscal support is likely to be needed,” said the Fed chair, Jerome H. Powell. Lawmakers have been deadlocked for weeks on any new spending plans.
European indexes were broadly lower, with the FTSE 100 down about half a percent and the Stoxx Europe 600 also lower. Automakers like Volkswagen and Renault dropped after industry data showed European new car sales down more than 17 percent in August compared to a year ago.
In Asia, nearly every index closed lower. In Hong Kong, the Hang Seng lost 1.6 percent, and the Kospi in South Korea fell 1.2 percent.
Shares in Snowflake, the data storage and analytics provider, are poised to fall in their second day of trading today. But they are still set to trade at more than double the price set for its stock-market debut on Wednesday, the latest sign of investors’ insatiable appetite for tech stocks, according to today’s DealBook newsletter.
After pricing its stock at $120 apiece in its initial public offering, Snowflake saw its shares open at $245 yesterday, climb to $319 and close at $254. That valued the company at more than $70 billion, which is about the same as Goldman Sachs. (Another tech company that went public yesterday, JFrog, saw its share price jump 50 percent from its I.P.O. level.)
Excitement for all things from Silicon Valley has powered a boom in tech investing, especially during the pandemic, which has made people more reliant on the internet for work and life. That means rapidly amassing wealth for executives like Snowflake’s chief executive, Frank Slootman, whose stake is now worth billions, as well as investors like Jack Dorsey of Twitter and Warren Buffett’s Berkshire Hathaway.
But that extreme performance also gives ammunition to critics of traditional I.P.O.s, where investment banks set a stock’s offering price, usually at a slight discount to draw in prospective investors. Some Silicon Valley figures have argued that such deals tend to shortchange companies going public: Bill Gurley, the venture capitalist, asserted yesterday that Snowflake’s stock “pop” shows how “broken” that process is. And the Zillow co-founder Spencer Rascoff tweeted:
I’m no math whiz, but if $SNOW sold 28 million shares at $120 per share in the IPO and it’s now at $275 a few minutes later, then they appear to have left $4.3 billion on the table in the IPO.
So on the one hand, congrats on the IPO. On the other hand, 🤦♂️
— Spencer Rascoff (@spencerrascoff) September 16, 2020
Analysts expect to see more companies explore going public by merging with blank-check funds, which are seemingly multiplying by the dozens, or by listing their shares directly onto public markets, as the data-mining consultancy Palantir is planning to do.
The Federal Reserve’s lending program for state and local governments has drawn scrutiny from a congressional commission tasked with overseeing it, with one Democrat-appointed member of the body calling the limited help states and municipalities are receiving “shameful.”
The so-called Municipal Liquidity Facility, which the Fed established with backing from a $454 billion pot that Congress gave to the Treasury Department to support such emergency programs, is meant to buy short-term securities that state and local governments use to finance themselves. The goal is to help those struggling to raise money at reasonable rates on private markets.
It is structured to be used only as a backup option, and as of the Fed’s last detailed report, only the state of Illinois and the Metropolitan Transportation Authority in New York had chosen to use it. The lack of use came under fire at the first oversight hearing focused on the municipal program, held Thursday.
One of the Fed’s corporate bond buying programs has been more active than the municipal facility, in part because the Fed has used it to proactively buy bonds, rather than waiting for borrowers to tap the program based on preset pricing rules.
“It’s a shameful disparity that reflects this administration’s priorities: taking care of big time executives and wealthy shareholders while abandoning emergency responders, teachers, firefighters, nurses, and all the people who count on their help,” Bharat Ramamurti, a Democrat-appointed commissioner, said at the hearing. “And it will further widen the racial income and wealth gaps in this country.”
A Republican member of the commission suggested that the program was no longer needed because credit was easily available.
“Liquidity in the municipal bond market has been restored, and as such, the MLF, in my view, should wind down,” Senator Patrick J. Toomey, Republican of Pennsylvania, said.
While the Fed — which tries to be independent of politics — administers emergency lending programs, the Treasury has control of the congressional funds that back up several of them. As a result, Treasury Secretary Steven Mnuchin has played a key role in determining credit risk and design in the individual programs.
The central bank itself sees many of its market-facing programs as backstops that should avoid crowding out private investors, and which can be successful even if they are lightly used.
“The MLF has contributed to a strong and rapid recovery in municipal securities markets,” Kent Hiteshew, a Fed official who has been instrumental in designing the program, said in remarks prepared for the hearing. “We are not aware of any cities or counties with populations below the MLF eligibility thresholds that are currently having difficulty accessing capital at affordable rates.”
Delta Air Lines expanded a debt offering backed by its SkyMiles loyalty program to $9 billion on Thursday, a $2.5 billion increase over its original financing plans announced earlier in the week. Airlines have been racing to amass cash for what is expected to be a long and volatile travel recovery.
Registrations of new cars fell 19 percent in the European Union in August, a much steeper decline than in July when registrations fell 6 percent compared to a year earlier, the European Automobile Manufacturers Association said Thursday. The decline in car sales added to evidence that the economic rebound is losing steam. “Further recovery in the coming quarters will likely be rather sluggish,” the Kiel Institute, an economic research organization in Germany, said Thursday as it revised its forecasts for growth in the European economy downward.
Top Glove, the world’s largest medical glove manufacturer, on Thursday reported its best financial performance ever because of demand stemming from the pandemic. The Malaysia-based company said its net profit last quarter was 1.33 billion ringgit, or about $321 million, 18 times higher than the same quarter a year earlier. Rights activists have raised concerns about forced labor in Malaysia’s glove industry, which provides two-thirds of the global supply, leading U.S. Customs and Border Protection to impose an import ban on two of Top Glove’s subsidiaries in July. The company, which says it has begun reimbursing foreign workers for the fees they paid recruitment agencies, said on Thursday that it was “making good progress” in working with the U.S. authorities to lift the ban.
The pilots union at United Airlines has reached an agreement to avoid furloughs until next summer, sparing the jobs of thousands of pilots weeks before broad job cuts are slated to begin across the industry. The union, the United Master Executive Council, said the agreement, which has yet to be approved by its 13,000 members, would protect pilots from furloughs until June. It would also open a second round of early retirement offers and includes temporary work reductions that would be reversed automatically as the airline recovers.