The daily business briefing: April 15, 2020
1.
The world economy is headed for its worst decline since the Great Depression in the 1930s due to the COVID-19 coronavirus pandemic, the International Monetary Fund said in a report released Tuesday. The IMF’s 2020 World Economic Outlook said the global economy could shrink by 3 percent this year, then partially rebound in 2021 with 5.8 percent growth. “This recovery in 2021 is only partial as the level of economic activity is projected to remain below the level we had projected for 2021, before the virus hit,” said Gita Gopinath, the IMF’s chief economist. U.S. stock futures fell early Wednesday after Wall Street rallied on Tuesday on signs that the pandemic could be easing. [Reuters, CNBC]
2.
Anthony Fauci, the leading medical expert on the White House coronavirus task force, said Tuesday that President Trump’s aim to start reopening parts of the economy on May 1 is “a bit overly optimistic.” “We have to have something in place that is efficient and that we can rely on, and we’re not there yet,” Fauci told The Associated Press. Fauci said before U.S. businesses and workers can resume normal operations, public health officials have to be able to test people for the virus quickly, and effectively track and isolate people who might have been infected. The comments from Fauci, head of the National Institute of Allergy and Infectious Diseases, came as Trump clashed with governors over who would have final say on which states should lift social distancing restrictions, and when. [The Associated Press]
3.
The Treasury Department on Tuesday announced that several airlines have agreed in principle to participate in a $25 billion payroll support program. Alaska Airlines, Allegiant Air, American Airlines, Delta Air Lines, Frontier Airlines, Hawaiian Airlines, JetBlue Airways, United Airlines, SkyWest Airlines, and Southwest Airlines are all on board, The New York Times reports. The program is part of the coronavirus relief package Congress passed in March, with the money used to pay employees. Under the agreement, the airlines will not be allowed to make pay cuts or any major staffing changes through September. In a statement, Treasury Secretary Steven Mnuchin said the agreement would “support American workers and help preserve the strategic importance of the airline industry while allowing for appropriate compensation to the taxpayers.” [The New York Times]
4.
J.C. Penney is considering filing for bankruptcy protection as the impact of the coronavirus pandemic threatens to derail its turnaround plan, Reuters reported Tuesday, citing people with knowledge of the matter. The retail chain has temporarily closed its 850 department stores, and furloughed many of its 85,000 employees. The Texas-based company has enough money to survive for months, but it is exploring a bankruptcy filing as a way to save money on looming debt payments. A spokesperson said in a statement that the company “has been engaged in discussions with its lenders since mid-2019 to evaluate options to strengthen its balance sheet and maximize its financial flexibility, a process that has become even more important as our stores have also closed due to the pandemic.” [Reuters]
5.
The Treasury Department is putting President Trump’s name on coronavirus relief checks the Internal Revenue Service is sending to 70 million Americans, The Washington Post reported Tuesday. Senior IRS officials said the unprecedented move could delay deliveries by a few days, although a Treasury official said the checks would go out on schedule next week. Trump privately told Treasury Secretary Steven Mnuchin, who oversees the IRS, that he wanted to sign the checks, the Post reported, citing three administration officials. But the president is not an authorized signer of U.S. Treasury disbursements, so his name will go on the memo line. The change affects those receiving $1,200 per-person paper checks. Those with a bank account on file to receive tax refunds have started receiving the payments through direct deposit. [The Washington Post]
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