Coronavirus Aid Talks Head Toward Deadline
U.S. jobless claims rose for the second consecutive week, creating more impetus for Congress to reach a deal for a new aid package.
Republicans and Democrats in Congress are in a dead sprint to get a deal done that would cost an estimated $900 billion. The sides continue to haggle over such points as limiting the Federal Reserve’s powers to help and including funds to help cities and states deal with the pandemic’s financial impact.
Some 12 million people would lose federal unemployment benefits after Christmas if those aren’t extended.
Negotiations may push into the weekend, requiring Congress to pass another short-spending plan to buy more time to complete the deal and avoid a government shutdown if funding isn’t in place by midnight on Friday.
Thursday morning, congressional leadership saw the latest report from the Labor Department showing 885,000 in new jobless claims last week, the highest since September. They were 23,000 higher than the previous week’s number that was revised up by 9,000 to 862,000.
Economists had projected that claims would drop.
In addition to those claims, 455,037 new applications were filed for temporary federal benefits that are set to expire at the end of the year unless Congress extends them.
Rising claims come as states and cities have started implementing new restrictions on businesses with the daily record rise in new coronavirus cases and deaths.
A wave of layoffs continues to roll through corporate America. On Friday, for example, Coca-Cola announced 1,200 job cuts in the United States, 500 of those at its headquarters in Atlanta. The cuts are the result of a reorganization announced during the summer that will lead to the Fortune 500 company decreasing its global operating units from 17 to nine.
FedEx Delivers Revenue Record
Package delivery for Memphis, Tennessee-based FedEx was so strong in the company’s latest quarter that it reported the best quarterly revenue in the company’s history while more than doubling profitability.
For that quarter that ended Nov. 30, revenue rose to $20.6 billion, exceeding $20 billion for the first time. FedEx had $17.3 billion in revenue in the same quarter last year.
Net income reached $1.23 billion, compared to $560 million last year.
The company attributed the revenue increase to growth in its international priority business and U.S. residential package services as well as “pricing initiatives across all transportation segments.”
FedEx’s latest quarter is the second in its fiscal year that started June 1. For the first six months of its fiscal year, the company reported nearly $39.88 billion in revenue, $5.5 billion better than last year. Profits are nearly $1.2 billion ahead.
Though the results were strong, FedEx still isn’t providing guidance for its current fiscal year, which ends May 31, 2021.
Home Depot Fined
Atlanta-based Home Depot was hit with a steep fine for contractors it hired not handling lead paint properly.
The Justice Department and the Environmental Protection Agency fined the home improvement retailer $20.75 million for alleged violations of an EPA rule dealing with how lead paint must be handled in renovating homes.
A consent decree was filed with the District Court for the Northern District in Georgia that would require Home Depot to put in place a comprehensive, companywide program that ensures the retailer’s contractors handle lead paint correctly.
The Justice Department said the civil penalty is the highest one obtained under the Toxic Substances Control Act. The EPA had discovered problems after five customer complaints in Illinois, Maine, Michigan, Minnesota and Wisconsin.
“These were serious violations,” Jonathan D. Brightbill, principal deputy assistant attorney general for the Justice Department’s Environment and Natural Resources Division. “The stiff penalty Home Depot will pay reflects the importance of using certified firms and contractors in older home renovations.”
Home Depot said in a statement the problems found didn't represent its high standards and expectations.
“When we found out about this, we moved quickly to contact all customers who might have been impacted and we significantly strengthened our lead safety systems and approach,” the company said.
Rite Aid Tops Earnings Expectations
Camp Hill, Pennsylvania-based Rite Aid reported strong earnings in its latest quarter, driven by a company it acquired five years ago.
Revenue hit $6.13 billion for the quarter that ended Nov. 28, with adjusted earnings of 40 cents per share, which beat Wall Street estimates.
Heyward Donigan, Rite Aid’s chief executive officer, told investors that Rite Aid saw a 29% revenue increase at Elixir, a pharmacy benefits administrator it bought in 2015, through increased membership in Medicare’s drug coverage known as Part D.
Rite Aid also saw a 28% increase in revenue for flu shots compared to last year, though the cold and flu season has been soft so far this year.
The company has more than 2,400 locations around the country. One of its improvement efforts includes refreshing the exteriors of all stores. Rite Aid has completed 700 of those so far with all expected to be done by next year.