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Democrats reject White House’s band-aid fix for $600 jobless benefit

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Breaking records can be good – but not when they’re for economic disintegration. U.S. GDP crashed at a 33% annualized pace in the three months to June, the Bureau of Economic Analysis said on Thursday. At least the trajectory of America’s economic output is a known unknown: The current quarter is less bad. How much so is anyone’s guess, though. And the Federal Reserve – and especially Congress – can shift the outcome.

The biggest one-time drop in GDP since government records began in 1947 was already a given, although the annualized figure for a quarterly change makes it look even worse than it is. So was a substantial rebound in activity since the depths plumbed early in the period after the coronavirus pandemic brought widespread shutdowns of workplaces, restaurants, and everything in between. The question is what happens next.

The Fed, which concluded its latest policy meeting on Wednesday, is playing a waiting game. It had already acted to boost the economy as fast and generously as it could. Jay Powell, chair of the U.S. central bank, hinted at concerns the recovery might be tailing off as Covid-19 cases continue rising in many parts of the United States. That’s where the GDP report – even just the first estimate – is already stale.

Weekly official data on new unemployment-insurance claims is one fresher source. Thursday’s iteration supports Powell’s worries. Claims have ticked up again moderately in the past couple of weeks, having previously declined since the massive spike around the end of March. What Powell calls high-frequency data, like consumer-spending information derived from the credit- and debit-card use, also suggests some weakening of the economic comeback, according to data from nonprofit research outfit Opportunity Insights.

The Fed, which concluded its latest policy meeting on Wednesday, is playing a waiting game. It had already acted to boost the economy as fast and generously as it could. Jay Powell, chair of the U.S. central bank, hinted at concerns the recovery might be tailing off as Covid-19 cases continue rising in many parts of the United States. That’s where the GDP report – even just the first estimate – is already stale.

Weekly official data on new unemployment-insurance claims is one fresher source. Thursday’s iteration supports Powell’s worries. Claims have ticked up again moderately in the past couple of weeks, having previously declined since the massive spike around the end of March. What Powell calls high-frequency data, like consumer-spending information derived from the credit- and debit-card use, also suggests some weakening of the economic comeback, according to data from nonprofit research outfit Opportunity Insights.


Most of Wall Street stumbled Thursday, but yet another rise for big technology stocks helped keep the market’s losses in check.

The S&P 500 dropped 12.22 points, or 0.4%, to 3,246.22, with nearly three out of four stocks in the index falling. Among the hardest-hit were oil producers, banks, and other companies that most need the economy to pull out of its recession. Treasury yields also sank in a sign of increased pessimism about the economy.

The Dow Jones Industrial Average lost 225.92 points, or 0.9%, to 26,313.65. Earlier in the morning, though, the market had seemed set for a much steeper fall. The Dow was down as many as 547 points, while the S&P 500 tumbled 1.7% within the first hour of trading.

Stronger-than-expected profit reports from UPS and other companies helped the market trim its losses through the day. So did steadying prices for Amazon and other big tech-oriented stocks, which 

The jumbled trading came after a report showed that 

Markets worldwide had already turned lower before those data releases dropped. An earlier report showed that Germany’s economy, Europe’s largest, suffered through its 

Investors had already been expecting the reports on the economy to be weak, “so the real story today for traders is earnings,” said Chris Larkin, managing director of trading and investment product at E-Trade Financial.

Thursday was the busiest day for profit reports among S&P 500 companies within the busiest week of this earnings season.

Earnings reports have mostly been better than Wall Street’s expectations so far, but they’ve been far below year-ago levels before the pandemic struck. The big companies in the S&P 500 are on track to report a nearly 38% drop for the second quarter from a year earlier, according to FactSet.

Energy stocks had some of the market’s sharpest losses, dropping in concert with oil prices amid worries about a weaker economy. Exxon Mobil dropped 4.9%, and ConocoPhillips lost 5.8%.

Financial stocks were also weak, hurt by a drop in interest rates that reins in the profits to be made from lending. JPMorgan Chase fell 2.7%, and Citigroup lost 3.1%

On the winning end was UPS, which jumped 14.4% to a record high after reporting revenue and profits for the spring that blew past analysts’ expectations. It benefited from more people getting deliveries at home amid the pandemic.

Qualcomm rose 15.2% after it also reported stronger-than-expected quarterly results while announcing it had resolved a dispute with Huawei and signed a new license agreement.

Shortly after trading ended for the day, Amazon, Apple, Facebook, and Google’s parent company all reported bigger profits for the latest quarter than Wall Street had forecast. Apple also announced a 4-for-1 stock split.

Expectations were already high for each of the giants. Their stocks are all up at least 14% this year when the S&P 500 is up just 0.5%. Amazon is up more than 65%.

Investors have continued to flock to them on expectations that their growth will only continue as the pandemic accelerates life’s shift toward online. Their huge size also gives their stocks’ movements great sway over index funds: The four alone account for nearly 16% of the S&P 500 by market value.

Investors are also continuing to wait for signs of progress from Capitol Hill, where 

A little more than 1.4 million U.S. workers applied for unemployment benefits last week, according to a Thursday report from the Labor Department. That’s up by 12,000 from a week earlier.

Thursday’s loss for the S&P 500 gave back some of its big gains from the day before when the Federal Reserve pledged to keep interest rates at their record low but highlighted how uncertain the path is for the economy due to the pandemic. It was the second time that the index has flip-flopped on consecutive days this week.

The yield on the 10-year Treasury fell to 0.55% from 0.58% late Wednesday. It tends to move with investors’ expectations for the economy and inflation.

Benchmark U.S. crude dropped $1.35 to settle at $39.32 per barrel. Brent crude, the international standard, fell 81 cents to $42.94 a barrel.

In European stock markets, Germany’s DAX lost 3.5%, and France’s CAC 40 dropped 2.1%. The FTSE 100 in London was down 2.3%.

In Asia, Japan’s Nikkei 225 slipped 0.3%, South Korea’s Kospi added 0.2% and Hong Kong’s Hang Seng dropped 0.7%. Stocks in Shanghai slipped 0.2%.

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