Happy Thursday and welcome back to On The Money. I’m Sylvan Lane, and here’s your nightly guide to everything affecting your bills, bank account and bottom line.
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THE BIG DEAL–Trump officials lay groundwork for May reopening: The Trump administration is laying the foundation to reopen parts of the U.S. economy as early as the beginning of May to help end what could become the deepest economic downturn in nearly a century.
President Trump and top government officials in recent days have talked about seeing “glimmers of hope” and a “light at the end of the tunnel” while publicly discussing ideas for how to revive the economy.
How the Trump team is preparing:
- The president has floated reopening businesses in parts of the country that do not have outbreaks.
- The Center for Disease Control and Prevention (CDC) on Wednesday unveiled guidelines meant to encourage those in critical sectors who have been exposed to the coronavirus but aren’t showing symptoms to continue working.
- And Treasury Secretary Steven Mnuchin told CNBC on Thursday that he believes companies could reopen in May as long as Trump “feels comfortable with the medical issues.”
But even with an aggressive approach and optimistic outlook, the decision to reopen the economy may largely be out of the federal government’s hands. The Hill’s Brett Samuels and Morgan Chalfant tell us why.
The obstacles to reopening:
- Many governors have imposed strict measures to try to stamp out the virus, with some stay-at-home orders in place through the end of May or later, and public health experts warned that without significantly expanded testing and contact tracing capabilities, reopening the economy too soon could trigger a new wave of infections and death.
- Officials have resisted putting a date on an economic reopening after Trump was widely criticized for floating Easter Sunday, April 12, as an initial target.
- Even so, the White House has grown increasingly optimistic that the roughest period will soon pass.
Powell pumps the brakes: Despite the optimism from elsewhere in the government, Federal Reserve Chairman Jerome Powell warned Thursday against prematurely breaking from social distancing practices.
Powell said it was “time to have a serious conversation” about how to restart normal economic activity, but the Fed chair also warned against causing a spike in coronavirus cases that forces the U.S. into another stretch of business closures and layoffs.
He added that the Fed was in “no hurry” to suspend its ongoing efforts to make trillions of dollars in asset purchases and rescue loans across the economy and financial system.
Speaking of which, the Fed earlier Thursday announced a new tranche of up to $2.3 trillion in economic aid, including $600 billion to purchase loans for small and midsize businesses, $500 billion to buy state municipal bonds and billions more to bolster the central bank’s ongoing purchases of Treasury, corporate, consumer and municipal securities. I’ve got more details on that here.
LEADING THE DAY
More than 6 million file for jobless benefits as coronavirus layoffs wrack economy:
Roughly 6.6 million Americans filed new applications for unemployment benefits in the first week of April as the coronavirus pandemic devastates the U.S. economy and forces millions out of work, according to data released Thursday by the Labor Department.
The 6,606,000 initial claims for unemployment insurance filed between April 1 and 7 dropped slightly from the revised, record-high 6,867,000 new applicants during the previous week, extending an unprecedented surge in layoffs.
“One of the unfortunate parts of this data is that it will no doubt be followed by even more extreme post-outbreak economic reports in the coming months,” S&P Global Ratings chief U.S. economist Beth Ann Bovino said in a Wednesday research note.
“America is now in recession and as it appears to deepen, the question is how long it will take before the U.S. recovers and we see a bounce-back both in terms of jobs and GDP.”
I have more on the brutal new jobs numbers here.
Democrats ramp up talks with Mnuchin on next COVID-19 relief deal: Senate Democrats are negotiating with Treasury Secretary Steven Mnuchin in hopes of reaching a deal to provide an additional $250 billion for an overloaded small-business emergency lending program and additional funding for hospitals and state governments.
- Bipartisan talks are continuing behind the scenes despite a blowup on the Senate floor Thursday morning.
- Republicans and Democrats blocked each other’s proposals to shore up funding shortfalls in the $2.2 trillion coronavirus relief package.
But now, Senate Minority Leader Charles Schumer (D-N.Y.) has told colleagues he’s optimistic about reaching a deal with Mnuchin in the near future. The Hill’s Alexander Bolton tells us why.
Stocks finish best four-day stretch since 1974: The S&P 500 on Thursday closed out its best four-day streak since 1974, according to CNBC, with traders turning optimistic amid flattening coronavirus infection curves in some of the hardest-hit parts of the U.S.
The S&P gained 11.9 percent in the trade-shortened week, with markets closed tomorrow for Good Friday. The Dow Jones Industrial Average gained 12 percent for the week.
Financial markets jumped Thursday following the announcement of new rescue efforts from the Federal Reserve and after signs of improvement in the slumping energy market. The Hill’s Niv Elis breaks it down.
Tentative deal would slash global oil production by 10 percent: Oil rich nations on Thursday cut a tentative deal to reduce production by 10 million barrels a day, cooling a trade war between Russia and Saudi Arabia as prices at the pump fall amid the coronavirus outbreak.
Saudi Arabia and Russia had both stepped up production as the pandemic began to spread, causing an oversupply of petroleum as demand for oil has dropped by 30 percent in recent weeks.
The deal, negotiated Thursday at a virtual meeting of the Organization of the Petroleum Exporting Countries other oil-producing countries known as OPEC+, represents a 10 percent decrease in global oil production for May and June. The Hill’s Rebecca Beitsch breaks it down.
GOOD TO KNOW
- A group of more than 50 Democratic lawmakers on Thursday urged congressional leaders to include monthly direct payments in a fourth coronavirus response bill, saying that doing so would be particularly helpful for low-income people.
- The coronavirus could push close to 500 million people into poverty worldwide unless wealthier countries take “urgent action” to help developing nations, according to a report from Oxfam released Thursday.
- Yelp will lay off 1,000 workers and furlough more than 1,000 other employees, the company announced Thursday.
- Five problems banks face in getting coronavirus relief out the door
- AP: “US gig workers and self-employed face delays in jobless aid”