Happy Friday 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.
THE BIG DEAL-Meadows says Trump willing to sign $1.3 trillion coronavirus bill: White House chief of staff Mark Meadows said Friday that President Trump would sign a coronavirus relief package totaling $1.3 trillion, an increase over the $1.1 trillion proposed by Senate Republicans.
“The president right now is willing to sign something at $1.3 trillion,” Meadows told reporters at the White House, saying that the figure had been offered privately to Democrats. He had previously said the White House was willing to go “north” of $1 trillion but did not offer a precise figure.
He said, however, that Speaker Nancy Pelosi (D-Calif.) has stood firm in her demand for a $2.2 trillion relief package. The Hill’s Morgan Chalfant brings us up to speed here.
The background: Meadows and Pelosi spoke Thursday afternoon, resuming negotiations on the next coronavirus package that have been stalled for three weeks.
- Pelosi said Thursday that she offered Meadows a concession by proposing a $2.2 trillion bill, down from a $2.4 trillion offer earlier this month.
- “We have said again and again that we’re willing to come down and meet them in the middle – that would be $2.2 trillion – and when they’re ready to do that, we’ll be ready to discuss and negotiate the particulars,” Pelosi told reporters in the Capitol following the phone call with Meadows.
The progress: Well, there’s not a ton to report. But Meadows inching the White House’s counteroffer up a little bit suggests a willingness to keep negotiating, which is still better than when we were a few weeks ago.
- Yahoo Finance: “Unemployment insurance doesn’t cover rent in most cities, study shows”
LEADING THE DAY
Consumer spending slowed in July as coronavirus surge dampened recovery: Consumer spending increased for the third straight month in July but slowed considerably amid surging coronavirus cases across the U.S., according to data released Friday by the Bureau of Economic Analysis (BEA).
- Personal consumption expenditures – the amount of money spent by Americans on goods and services for household or personal use – rose 1.9 percent in July, the BEA reported.
- That marks a notable slowdown from June’s increase of 6.2 percent and May’s increase of 8.6 percent.
Why it matters: While consumer spending has increased in every month since May, the slowing pace of the rebound is another alarming sign of a fading recovery. Consumer spending drives roughly two-thirds of U.S. economic growth and a deeper slowdown could raise financial pressure on businesses struggling to get by during the pandemic.
- Economists have warned since June that the rising number of coronavirus cases seen throughout the start of summer would slow the pace of recovery even without the reimposition of businesses restrictions meant to curb the pandemic.
- Those fears were born out in a wide array of studies and economic data compiled by private firms and the federal government.
“The 1.9% advance in July consumer spending offers yet another sign that while the demand recovery remains on track, it has settled into a slower pace,” wrote Lydia Boussour of Oxford Economics in a Friday analysis. Consumer spending remains 5 percent below its pre-pandemic level, she added.
The danger ahead: The expiration of enhanced unemployment benefits and federal foreclosure and eviction protections may also restrain consumer spending in August, economists fear, as vulnerable Americans struggle to cover basic expenses without further federal support. Democrats and Republicans have been locked in a months-long stalemate over another stimulus bill and have made no progress since those benefits expired on July 31.
“Looking ahead, consumption should continue to firm as conditions very slowly normalize but the steep decline in federal support for unemployed workers and heightened uncertainty will depress consumer confidence and spending and weigh on the broader economic recovery,” Boussour wrote.
Only five states making use of Trump’s expanded unemployment benefits: The $300 in additional unemployment benefits President Trump approved in an executive order earlier this month are currently only being paid out by five states, Forbes and Yahoo News reported this week.
Trump’s order, meant to relieve pressure over stalled negotiations on expired benefits during the coronavirus pandemic, tapped into disaster funding from the Federal Emergency Management Agency (FEMA).
- Of the 41 states that have applied for the benefit, FEMA has already approved 35, but the process of aligning the benefits through the state unemployment systems takes time.
- The only states that were expected to have benefits up and running this week are Arizona, Louisiana, Missouri, Montana and Texas.
- Only two, Arizona and Texas, had already been confirmed as having issued payments.
The Hill’s Niv Elis has more here.
GOOD TO KNOW
- MarketWatch: “Double-dip recession chances significant, ex-CBO chiefs say, citing ‘policymaking malpractice'”
- Upwork: “Where Remote Work Saves Commuters Most”
- American Banker: “Ex-Bank of America employees allege ‘extreme pressure’ to sell credit cards”