US ECONOMY & POLITICS

Spiraling COVID-19 cases driving up U.S. layoffs; inflation still benign – Reuters, 12/10/20

• The number of Americans filing first-time claims for jobless benefits jumped to a near three-month high last week as mounting new COVID-19 infections caused more business restrictions, further evidence that the pandemic and lack of additional fiscal stimulus were hurting the economy.
• Initial claims for state unemployment benefits surged 137,000 to a seasonally adjusted 853,000 for the week ended Dec. 5, the highest since mid-September. The weekly increase was the largest since last March, when the nation was battered by the first wave of coronavirus infections.
• Including a government-funded program for the self-employed, gig workers and others who do not qualify for the regular state unemployment programs, 1.4 million people filed claims last week.
• The claims report also showed the number of people receiving benefits after an initial week of aid increased 230,000 to 5.757 million in the week ended Nov. 28. That was the first increase since August.
• At least 4.533 million people were on extended benefits during the week ending Nov. 21. These benefits, which are funded by the government, are set to expire on Dec. 26, if Congress does not reach a deal on another round of stimulus.
• Just over 19 million people were receiving benefits under all programs during that period.

Lawmakers Weigh Competing Covid-19 Aid Proposals – Wall Street Journal, 12/10/20

• A flurry of competing proposals for another coronavirus relief package ricocheted around the Capitol Wednesday, as lawmakers hunted for ways to resolve a thorny debate over liability protections that has stymied progress for weeks.
• A bipartisan group was still working late Wednesday to craft an agreement over some form of legal protections for businesses, schools and other entities operating during the pandemic, the single most stubborn roadblock for lawmakers eager to reach a deal on emergency relief.
• In a surprise twist this week, Senate Majority Leader Mitch McConnell (R., Ky.), who had insisted for months on including a liability provision in any relief package, suggested Tuesday that lawmakers could proceed by dropping both contentious issues.
• But just hours later, the White House presented its own offer to House Speaker Nancy Pelosi (D., Calif.) that included both state and local funding, as well as liability protections.
• Unlike the bipartisan proposal, the White House offer included sending direct checks of $600 in aid per person to many Americans, but omitted the $300 a week in enhanced unemployment insurance that the bipartisan group had proposed.
• The bipartisan group continued to flesh out its proposal, completing a detailed summary Wednesday that filled in details on all but the two most contentious issues.
• Their four-month proposal would include $300 a week in unemployment insurance for 16 weeks, $300 billion in relief for small businesses, $35 billion for health-care providers, $82 billion for schools, a 15% increase in monthly food-stamp benefits, $10 billion for child-care providers, $25 billion for rental assistance and a moratorium on evictions through the end of January 2021, according to the summary.

U.S. Senate to vote on spending stopgap as COVID-19 aid debate continues – Reuters, 12/10/20

• The U.S. Senate is expected to vote as early as Thursday on a one-week extension of federal government funding to provide more time for legislators to work out a larger spending package including coronavirus relief, if lawmakers can reach a deal after months of argument.
• The Democratic-majority House voted 343-67 on the stopgap measure on Wednesday.
• If passed and signed by President Donald Trump, it would prevent federal programs from running out of money on Friday at midnight by extending current funding levels until Dec. 18.
• Senate Majority Leader Mitch McConnell, a Republican, has said the Senate will take it up this week and send it to Trump in time to avoid a government shutdown.

China Responds in Latest Sanctions Tit-for-Tat With U.S. Over Hong Kong  – Wall Street Journal, 12/10/20

• China is revoking visa exemptions for U.S. diplomatic passport holders in Hong Kong and Macau and said it would impose other unspecified sanctions to retaliate for actions the Trump administration took against Chinese officials this week.
• The sanctions would affect U.S. officials and nonprofit personnel who had “expressed vile positions on the Hong Kong question” along with their immediate family members, Chinese Foreign Ministry spokeswoman Hua Chunying said Thursday at a regular press briefing in Beijing.
• The moves were undertaken because the U.S. had “exploited Hong Kong-related issues to seriously interfere in China’s internal affairs and harm China’s core interests,” Ms. Hua said. She didn’t say when the sanctions would take effect.
• Beijing’s announcement comes after the White House placed 14 senior Chinese officials on its sanctions blacklist on Monday. The Trump administration said the officials had been responsible for eroding Hong Kong’s political autonomy.

U.S. Says Canada Shields Its Dairy Market in Violation of Trade Pact – Wall Street Journal, 12/10/20

• The Trump administration filed a complaint against Canada over the market access for U.S. dairy products, in the first enforcement action under the U.S.-Mexico-Canada Agreement.
• U.S. Trade Representative Robert Lighthizer said Wednesday that Canada has hampered the ability of American dairy farmers and producers to sell their products, by using quotas that prefer Canadian producers.
• In a letter to his Canadian counterpart, Mr. Lighthizer said the U.S. was exercising its rights to enforce the USMCA, adding that Washington may request the establishment of a USMCA dispute-settlement panel if the U.S.’s concerns aren’t addressed.

Mortgage Originations Are on Pace for Best Year Ever – Wall Street Journal, 12/10/20

• Americans are poised to take more mortgages this year than they did even during the run-up to the 2008-09 financial crisis.
• In the first nine months of the year, lenders extended $2.8 trillion of mortgages, according to industry-research firm Inside Mortgage Finance. The boom has extended into the final quarter of 2020, prompting analysts to predict origination volume will exceed the prior record of $3.7 trillion in 2003.
• In the first three quarters of 2020, refis made up 65% of all originations, on pace to be the highest share since 2012, according to Inside Mortgage Finance.

Biden to Name Katherine Tai U.S. Trade Representative – Wall Street Journal, 12/10/20

• President-elect Joe Biden plans to nominate Katherine Tai as U.S. Trade Representative, according to people familiar with the matter, turning to an experienced trade lawyer with expertise on China and proven diplomatic skills.
• Ms. Tai has spent much of her career working in the government, first as a lawyer for the Office of the U.S. Trade Representative focusing on China, then as a Congressional staff member.
• “I think there will be really robust political support for aggressive and bold steps with respect to how we compete with China,” Ms. Tai said on a Center for American Progress panel in August.
• On the August panel, Ms. Tai described Mr. Trump’s China policy as “largely defensive,” focused on making sure China was playing by the rules and taking countermeasures if it wasn’t.
• A good trade policy has to have offensive elements as well, she said. “The offense has got to be about what we are going to do to make ourselves and our workers and our industries and our allies faster, nimbler, be able to jump higher, be able to compete stronger, and ultimately be able to defend this open democratic way of life that we have,” she said

Following Trump, Biden Seeks Waiver for Defense-Chief Pick  – Wall Street Journal, 12/10/20

• President-elect Joe Biden asked for approval of a congressional waiver allowing him to nominate Lloyd Austin for defense secretary, which would the retired Army general the nation’s first Black Pentagon chief.
• Mr. Biden’s request on Wednesday—which would allow Gen. Austin to serve as defense secretary even though he has been retired from the military for fewer than the seven years required under law—came amid concern that the appointment would erode civilian control of the armed forces.
• Democrats praised Gen. Austin, but some, including Sens. Richard Blumenthal of Connecticut and Elizabeth Warren of Massachusetts, said they would oppose a waiver, citing the importance of civilian control of the military.

EUROPE & WORLD

EU unveils plans to avoid Brexit chaos as ‘no deal’ looms larger – Reuters, 12/10/20

• The European Union’s executive on Thursday laid out contingency plans for a ‘no-deal’ Brexit at the end of the year to minimize disruption to air traffic and road and rail travel after talks between British and EU leaders failed to break an impasse.
• The European Commission also proposed that Britain and the EU continue to offer reciprocal access to their fishing waters for up to a year, but London quickly rebuffed the idea.
• Agreement on fishing rights has been one of the most emotive sticking points in negotiations for a trade deal that has eluded the two sides since the United Kingdom formally left the EU in January after 47 years of membership.
• Investment banks on Thursday cut the chances of an agreement by the Dec. 31 deadline, and bookmakers slashed the odds to 50%.

ECB Expands Stimulus Program to Prop Up Pandemic-Hit Economy – Wall Street Journal, 12/10/20

• The European Central Bank scaled up its emergency bond-buying program by more than a third and unveiled a new batch of ultracheap loans for banks, a bold move aimed at backstopping the region’s governments and businesses as they navigate a stubborn resurgence of the Covid-19 pandemic.
• The move, which takes the ECB’s monetary stimulus this year above 3 trillion euros, equivalent to $3.6 trillion, underscores the rocky path ahead for the 19-nation eurozone economy.
• Together with a new €750 billion joint fund that European Union leaders are expected to finalize this week, the decision underscores Europe’s willingness to combat this year’s economic downturn using new debt.

China-Europe Trade Forum Canceled After China Sought to Bar Critics – Wall Street Journal, 12/10/20

• An annual China-Europe trade forum was quietly canceled last month after European organizers rejected Chinese demands to ban participants critical of Beijing.
• The move, not previously reported, highlights an increasingly difficult balance Europe is trying to strike between safeguarding business interests and upholding democratic values in the face of China’s increasingly aggressive global stance.
• The annual China-EU CEO and Former Senior Officials Dialogue—a closed-door event that includes around 40 chief executives, top officials and academics from Europe and China—would have been its fourth edition and taken place this year by videoconference.
• The event’s cancellation offers a fresh sign of Europe’s hardening stance toward Beijing, a shift that became evident last year when the bloc described China as a systemic rival, and was underscored during the coronavirus pandemic with senior EU officials blaming China for disinformation.

Factmonster – TODAY in HISTORY

• The first Nobel Prizes were awarded in Stockholm, Sweden, in the fields of physics, chemistry, medicine, literature, and peace. (1901)
• The United Nations General Assembly adopted its Universal Declaration on Human Rights. (1948)
• A U.S. passenger jet landed in Vietnam, the first one to do so since the Vietnam War ended nearly three decades earlier. (2004)