The Week in Business: Goodbye, Extra $600 a Week
The Week in Business: Goodbye, Extra $600 a Week
It’s a big week ahead in Washington, where Congress will hash out the fate of jobless benefits for over 30 million people as the coronavirus rages on. Here’s what else you need to know in business and tech as we roll into Monday.
What’s Up? (July 19-25)
The Wrong Direction
The country has been hemorrhaging jobs since March, but at least we could take some comfort in seeing new unemployment claims steadily tick down from their initial spike. Until last week, when the number went up again for the first time in three months. Economists blamed the resurgence of the virus, which has forced some businesses to close again and others to limit their operations for … well, who knows how long? What’s more, many businesses have burned through any emergency funding that they got through the Paycheck Protection Program (if they were lucky enough to get it in the first place), and are looking to cut expenses — like staff.
A Vaccine Race
The federal government is investing in the vaccine business. The Trump administration secured a nearly $2 billion contract with the pharmaceutical giant Pfizer and its German manufacturing partner to obtain 100 million doses of a coronavirus vaccine by December. It’s too soon to know if Pfizer’s early version of a vaccine even works or is safe, let alone could be ready for mass production by the end of the year. But if it is, this arrangement would give the government dibs on the first batch for about $20 a dose, with the rights to acquire up to 500 million more. (Americans would receive the vaccine for free.) The government made a similar deal this month with a smaller biotech company, Novavax.
More Bad Blood
Tensions between the world’s two largest economies escalated on Thursday when Secretary of State Mike Pompeo abruptly ordered China to close its consulate in Houston and accused Chinese diplomats of spying. China retaliated by ordering the United States to close its consulate in the southwestern city of Chengdu — take that. This flurry of blows weakened the already deteriorating relationship between Washington and Beijing, making markets unhappy. Earlier in the week, the Justice Department accused Chinese hackers of trying to steal coronavirus research from companies in the United States and more than 10 other nations.
What’s Next? (July 26-Aug. 1)
When Congress passed its big coronavirus aid package back in March, a key component was the supplementary $600 a week in unemployment benefits until July 31. At the time, that expiration date seemed so far away! But here we are, barreling toward August and nowhere near recovery, with roughly one in five workers dependent on that extra $600 to pay bills. The government’s eviction moratorium is also set to expire, which could put millions in a tight spot. Congress will spend this week haggling over another relief bill that would continue some portion of the expanded unemployment benefits (the exact amount is still undecided), replenish additional sources of aid (like the Paycheck Protection Program), and include funding for schools and testing.
A cache of documents related to the criminal case against Ghislaine Maxwell, the longtime companion of the financier Jeffrey Epstein, could be unsealed within a few days. Ms. Maxwell’s lawyers argued for the documents to remain secret to avoid harm or embarrassment to their client, since they include past testimony by women who accused her and Mr. Epstein of sex crimes, but a New York judge rejected the plea. In related news, two mansions that belonged to Mr. Epstein, who died last year, are now on the market for a combined $110 million. The proceeds will go to Mr. Epstein’s estate, which recently opened a compensation fund for women who say he abused them. Ms. Maxwell has also sued the estate to pay for her legal defense against six charges of sex trafficking and perjury.
Tick, Tock, Boom
As part of the intensifying face-off between the United States and China, President Trump has threatened to ban the video app TikTok, which is especially popular with teenagers. According to the Trump administration, TikTok’s parent company, the Chinese tech giant ByteDance, has been sharing users’ personal information with the Chinese government. To avoid losing its lucrative American market, ByteDance is reportedly considering selling off a majority stake of TikTok to non-Chinese investors. But the deal is far from done, and it’s unclear whether it would placate ByteDance’s critics.
Another retailer bites the dust: The owner of Ann Taylor and Lane Bryant has filed for bankruptcy. A law student in Australia has sued her government for ignoring the potential financial damage of climate change — the first lawsuit of its kind. And Goldman Sachs agreed to a $3.9 billion settlement with the Malaysian government over the scandal known as 1MDB, in which several of the bank’s employees raised money for a Malaysian sovereign wealth fund and then spent it on yachts, diamonds and designer purses instead.