Walmart making cuts amid economic downturn

Revelations 18:23:’For the merchants were the great men of the earth; for by thy sorceries were all nations deceived.’

Important Takeaways:

  • Walmart cuts 200 corporate employees, says it will continue hiring in ‘key areas’
  • Walmart let go of almost 200 corporate employees on Wednesday amid the economic downturn and rising inflation, according to a person familiar with the development. The company said in a statement that these layoffs are a part of updating its structure.

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Fed policymakers say economic growth will be muted until virus contained

By Jonnelle Marte and Howard Schneider

(Reuters) – The U.S. economic slowdown is likely to continue as more restrictions are put in place to control the coronavirus epidemic, and Americans will have to learn to “live with” the virus for the rest of the year, two Federal Reserve policymakers said on Wednesday.

Consumer spending will probably remain weak relative to the past as people avoid activities that require high levels of social interaction for health reasons, Boston Fed President Eric Rosengren said during an online event organized by the South Shore Chamber of Commerce in Massachusetts.

“The forecast for the U.S. economy this fall is quite uncertain, but my view is that the recent slowdown in economic activity that we have seen in high-frequency data is likely to continue,” Rosengren said.

With a vaccine unlikely to be ready in the immediate future, consumers and businesses need a plan to manage the risks of the virus throughout the fall and winter, Rosengren said.

Dallas Fed President Robert Kaplan voiced similar concerns, saying in a webcast event with the Lubbock Chamber of Commerce in Texas that Americans need to learn to “live with” the virus, using safety measures such as masks so the economy can remain open.

Rosengren said the parts of the country that enacted longer shutdowns earlier in the crisis were now benefiting from better health outcomes and more robust spending. States that lifted restrictions too quickly saw a short-lived increase in economic activity, which became muted after a rise in infections, he said.

“Limited or inconsistent efforts by states to control the virus based on public health guidance are not only placing citizens at unnecessary risk of severe illness and possible death – but are also likely to prolong the economic downturn,” Rosengren said.

Kaplan said he expects the U.S. unemployment rate to remain elevated at 9% at the end of the year, but noted it could be lower if businesses and consumers take steps to control the virus. The unemployment rate in July was 10.2%.

“If we don’t follow that, while people may feel freer, the economy will grow slower,” Kaplan said.

Referring to the Fed’s Main Street Lending Program, which is meant to carry small and medium-sized businesses through the crisis, Rosengren said that low early use of the program was not a sign of failure and that more businesses may turn to the facility in the fall if the economy worsens.

Asked about the rise in U.S. government debt, Rosengren said he supports strong fiscal stimulus but cautioned it must be paired with efforts to contain the virus.

“If you want to actually make sure that the debt doesn’t explode, you have to make sure that we get the pandemic under control,” Rosengren said.

(Reporting by Jonnelle Marte; Editing by Paul Simao)

What’s in the $2.3 trillion U.S. coronavirus rescue package

(Reuters) – U.S. President Donald Trump signed the largest federal stimulus package in history into law on March 27 to help cope with the economic downturn inflicted by the coronavirus pandemic and shore up medical providers on the front lines of the outbreak.

Here are major elements of the plan, which is estimated to cost roughly $2.3 trillion. Cost estimates are provided by congressional committees and the Committee for a Responsible Federal Budget, a nonpartisan policy group.

DIRECT PAYMENTS TO AMERICANS

Direct payments of up to $1,200 each to millions of Americans, with additional payments of $500 per child. Payments would be phased out for those earning more than $75,000 a year. Those earning more than $99,000 would not be eligible.

Estimated cost: $292 billion

ENHANCED UNEMPLOYMENT AID

Payments for jobless workers would increase by $600 per week. Laid-off workers would get those payments for up to four months. Regular benefits, which typically run out after six months in most states, would be extended for an additional 13 weeks.

Self-employed workers, independent contractors and those who typically don’t qualify for unemployment benefits would be eligible. The government would also partially make up wages for workers whose hours are scaled back, in an effort to encourage employers to avoid layoffs.

Estimated cost: $260 billion

SMALL BUSINESS LOANS AND GRANTS

Loans for businesses that have fewer than 500 employees could be partially forgiven if they are used for employee salaries, rent, mortgage interest and utility costs. The bill also includes emergency grants for small business.

Estimated cost: $377 billion.

AID TO AIRLINES, LARGE BUSINESSES

The bill sets up a fund to support a new Federal Reserve program that offers up to $4.5 trillion in loans to businesses, states and cities that can’t get financing through other means.

Companies tapping the fund would not be able to engage in stock buybacks and would have to retain at least 90% of their employees through the end of September. They would not be able to boost executive pay by more than $425,000 annually, and those earning more than $3 million a year would see their salaries reduced.

The fund would be overseen by an inspector general and a congressional oversight board. The Treasury secretary would have to disclose transactions.

Businesses owned by President Donald Trump, other administration officials or Congress members, or their family members, would not be eligible for assistance.

Loans are set aside for airlines, air cargo carriers, airline contractors and “businesses important to maintaining national security,” widely understood to be Boeing Co.

Total cost: $500 billion

GRANTS FOR AIRLINES

Airlines, air cargo carries and airline contractors also could get grants to cover payroll costs. They would have to maintain service and staffing levels, and would not be able to buy back stock or pay dividends. The U.S. government could get stock or other equity in return. Executive pay above $425,000 a year would be frozen for two years, and those who earn more than $3 million annually would see their salaries reduced.

Total cost: $32 billion

HOSPITALS AND PUBLIC HEALTH

– $100 billion for hospitals and other elements of the healthcare system

– $16 billion for ventilators, masks and other medical supplies

– $11 billion for vaccines and other medical preparedness

– $10 billion for the U.S. Centers for Disease Control and Prevention (CDC), the Food and Drug Administration (FDA) and other health agencies

– $20 billion for veterans and military health systems

– $20 billion for the Medicare health program for seniors

STATES, EDUCATION, TRANSPORTATION

– $150 billion for state, local and Native American tribal governments

– $45 billion in disaster relief

– $32 billion for education

– $25 billion for mass-transit systems

– $10 billion in borrowing authority for the U.S. Postal Service

– $1 billion for the Amtrak passenger rail service

– $10 billion for airports

– $4 billion to suspend airline ticket, cargo and fuel taxes

TAX CUTS

– A refundable 50 percent payroll tax credit for businesses affected by the coronavirus, to encourage employee retention. Employers would also be able to defer payment of those taxes if necessary. Cost: $67 billion

– Loosened tax deductions for interest and operating losses. Cost: $210 billion

– Loosened rules for retirement funds, allowing people to withdraw money early or postpone withdrawals from accounts such as Individual Retirement Accounts (IRAs) that have been hurt by turbulence in financial markets. Cost: $8 billion

– Allows people to use tax-advantaged savings accounts to buy menstrual medical products. Cost: $9 billion

– Tax write-offs to encourage charitable deductions and encourage employers to help pay off student loans. Cost: $3 billion

– Waive tax on distilled spirits used to make hand sanitizer

INCREASED SAFETY NET SPENDING

– $25 billion more for food stamps and child nutrition

– $12 billion more for housing programs

– $5 billion more for child and family services

OTHER ELEMENTS

– Temporary ban on foreclosures and evictions for people who rely on federal housing and mortgage programs

– Defer payments and interest on federal student loans

(Reporting by Andy Sullivan; Editing by Scott Malone, Peter Cooney, Steve Orlofsky, Jonathan Oatis and Sonya Hepinstall)

U.S. House approves $2.2 trillion coronavirus bill, sends to Trump

By David Morgan and Susan Cornwell

WASHINGTON (Reuters) – The U.S. House of Representatives on Friday approved a $2.2 trillion aid package – the largest in American history – to help individuals and companies cope with an economic downturn caused by the coronavirus outbreak and provide hospitals with urgently needed medical supplies.

The massive bill, also passed by the Republican-controlled Senate late on Wednesday, now goes to Republican President Donald Trump who is expected to promptly sign it into law.

Democrats and Republicans in the Democratic-led House approved the package on a voice vote, turning back a procedural challenge from Republican Representative Thomas Massie, who had sought to force a formal, recorded vote.

Massie, an independent-minded Republican who has repeatedly defied party leaders, said on Twitter that he thought the bill contained too much extraneous spending and gave too much power to the Federal Reserve. He did not speak on the House floor during the three-hour debate.

Trump called Massie a “third rate Grandstander” on Twitter and said he should be thrown out of the Republican Party.

“He just wants the publicity. He can’t stop it, only delay,” Trump wrote.

Other said he was putting lawmakers’ health at risk.

At least three members of Congress have tested positive for the coronavirus and more than two dozen have self-quarantined to limit its spread.

“Thomas Massie, this is disgusting. This is inhumane,” Democratic Representative Max Rose said on Fox News.

The rescue package – which would be the largest fiscal relief measure ever passed by Congress – will rush direct payments to Americans within three weeks if the House backs it and Trump signs it into law. It passed the Senate unanimously on Wednesday night.

The $2.2 trillion measure includes $500 billion to help hard-hit industries and $290 billion for payments of up to $3,000 to millions of families.

It will also provide $350 billion for small-business loans, $250 billion for expanded unemployment aid and at least $100 billion for hospitals and related health systems.

The rare but deep, bipartisan support in Congress underscored how seriously lawmakers are taking the global pandemic as Americans suffer and the medical system threatens to buckle.

The United States surpassed China and Italy on Thursday as the country with the most coronavirus cases. The number of U.S. cases passed 85,000, and the death toll exceeded 1,200.

The Labor Department on Thursday reported the number of Americans filing claims for unemployment benefits surged to 3.28 million, the highest level ever.

(Reporting by David Morgan, Lisa Lambert, Doina Chiacu, Richard Cowan, Susan Cornwell, Andy Sullivan and Patricia Zengerle; Writing by Andy Sullivan and Patricia Zengerle; Editing by Lincoln Feast and Jonathan Oatis)