Month: October 2020

Consumers spent at a much faster pace than expected in September, with retail sales rising 1.9% in a sign that the U.S. economy’s biggest driver remains healthy.

Economists surveyed by Dow Jones expected sales to rise 0.7%, up from a 0.6% rise in August.

Clothing and accessories led the gains, rising by 11%, while sporting goods, music and books jumped 5.7%. Electronics and appliances was the only major sector that was negative, dropping 1.6% from the August levels.

The unexpectedly big gain in spending comes after months of historically high savings as consumers retrenched due to the Covid-19 scare. The personal savings rate peaked at 33.6% in April and remained at 14.1% in August, the highest pre-pandemic rate since June 1975.

“The strength in August sales is welcome, and consumers in aggregate have the resources — in the form of the huge increase in savings deposits built up since the spring — to finance a strong holiday season,” wrote Ian Shepherdson, chief economist at Pantheon Macroeconomics.

A Wisconsin judge on Wednesday temporarily blocked an order from Gov. Tony Evers’ administration limiting the number of people who can gather in bars, restaurants and other indoor places.

The Tavern League of Wisconsin has filed a lawsuit to strike down the Evers administration’s emergency order limiting bar and restaurant capacity during the COVID-19 pandemic.

The order, which went into effect last Thursday, requires bars and restaurants across the state to limit capacity to 25 percent until Nov. 6.

The lawsuit, filed Tuesday in Sawyer County, argues that the court should throw out the order because it wasn’t created through the emergency rulemaking process, a process that requires state lawmakers to approve any restrictions on people and businesses during the pandemic. Using the process would essentially give the GOP-controlled Legislature veto power over any restrictions.

Chris Marsicano, president of the Tavern League of Wisconsin, said Wisconsin restaurants and bars are facing “economic ruin” as the pandemic continues, and that businesses shutdowns “have not proven effective” as the virus has spread in the state.

“The Tavern League of Wisconsin is committed to fighting the spread of COVID-19, but will not stand by and watch its members be forced out of business by unlawful orders,” Marsicano said in a prepared statement. “We need the help and support of our communities and elected officials to keep defeat COVID-19 while keeping our ‘OPEN’ signs lit.”

He said the state needs to “kill COVID, not small business.”

Republican legislators are forcing Gov. Tony Evers’ administration to submit their emergency order limiting businesses to 25% indoor capacity to go through the rule-making process.

On a party-lines 6-4 vote Monday afternoon, a legislative committee gave the administration 30 days to submit the order as a rule, which opens it up to legislative approval. That would give state GOP lawmakers the chance to overturn it as a rule by Nov. 11; currently, the emergency order expires Nov. 6.

Emergency Order 3 was issued under the state’s Department of Health Service’s emergency powers. Speaker Robin Vos argued last week in a statement that the order violated the decision from the state Supreme Court in May, which overturned the safer-at-home order.

“With cases once again rising, it’s clear the governor’s go-it-alone, grab bag approach to responding to the coronavirus has been a failure,” Vos said in the statement. “We must work together in order to keep our businesses open and our citizens safe.”

The Trump administration on Sunday called on Congress to pass a stripped-down coronavirus relief bill using leftover funds from an expired small-business loan program, as negotiations on a broader package ran into resistance.

The administration proposal, which Democrats dismissed as inadequate, was the latest twist in on-again, off-again talks to try to secure more stimulus, as the economy struggles to recover from coronavirus-related shutdowns that threw millions of Americans out of work.

In a letter to lawmakers, Treasury Secretary Steven Mnuchin and White House Chief of State Mark Meadows said they would continue to talk to Senate Democratic leader Chuck Schumer and House of Representatives Speaker Nancy Pelosi to try to reach agreement on a comprehensive bill.

But they said Congress should “immediately vote” on legislation to enable the use of the unused Paycheck Protection Program funds, which total around $130 billion.

“The all or nothing approach is an unacceptable response to the American people,” they wrote.

The Wisconsin Economic Development Corporation (WEDC) will provide a second round of We’re All In Small Business Grants to distribute an additional $50 million to small businesses hit hard by the COVID-19 pandemic, Governor Tony Evers announced on Tuesday.

Applications for the grants will open at 8 a.m. Monday, Oct. 19, and close at 11:59 p.m. Monday, Nov. 2. As with the previous round of We’re All In Grants, awards will not be made on a first-come, first-served basis.

Businesses that received funds under the first round of We’re All In Grants, as well as the Ethnic Minority Emergency Grant program, are also eligible for the second round of We’re All In Grants. Priority will be given to businesses that have not previously received funds from either of the first two programs, those with ethnically diverse ownership, and those in the hardest-hit sectors, such as restaurants and taverns, hair and nail salons and barber shops, and other services.

The grants will be administered by the Wisconsin Department of Revenue in partnership with WEDC. Learn more about the program and apply at revenue.wi.gov.

To be eligible for the second round of We’re All In Grants, an applicant must:

• be a Wisconsin-based, for-profit business;
• in 2019, have 75% or more of company labor costs in Wisconsin and 75% of their assets in Wisconsin;
• earn more than $0 and less than $1 million in annual revenues (gross sales and receipts); and
• have started operating prior to Jan. 1, 2020, (Seasonal businesses should use the highest total FTEs employed during the season.)
• have filed their 2019 taxes.

For this round, We’re All In Grants will be administered by the Department of Revenue in partnership with WEDC.

A Waukesha County judge agreed to continue blocking Gov. Tony Evers’ administration from releasing the names of businesses that have at least two employees test positive for COVID-19.

Online court records show that a hearing in the case has been scheduled for Nov. 30 at 2 p.m.

The records do not specify for how long the court’s injunction will last, only that it was extended Wednesday during a motion hearing.

Waukesha County Judge Lloyd V. Carter first blocked the Evers administration from releasing the information on Oct. 1.

The initial order extended for five days.

Several media outlets have filed requests for the information, and Evers said that the state intended to comply with their requests.

Gov. Tony Evers’ administration issued an order Tuesday restricting the size of crowds at indoor locations like restaurants and bars, citing a spike in COVID-19 cases that has strained hospitals across the state.

The order is set to take effect at 8 a.m. Thursday. It would end Nov. 6.

Under the order, a private venue would be limited to 25 percent of its usual capacity. For example, a restaurant with a capacity of 200 would be limited to a crowd of 50.

The list of exemptions to the order is long. It wouldn’t restrict outdoor gatherings, where the state Department of Health Services said the risk of COVID-19 transmission was lower.

The order also wouldn’t apply to indoor workplaces that aren’t open to the public, like a warehouse or manufacturing plant.

Many of the same businesses that were exempt from the stay-at-home order would also be exempt from this order, such as grocery stores or construction businesses.

Universities and K-12 schools would be exempt from the order, as would child care centers. Campaign events, polling places and churches would also be exempt.

It would be up to local governments to enforce the order. They could issue fines of up to $500, but it wouldn’t carry criminal penalties.

The U.S. economy was resilient in the third quarter, with sales and growth powering higher despite the persistent coronavirus pandemic, increased uncertainty about the future and Congress’ inability to pass another spending package to help struggling small businesses and unemployed workers.

Driving the news: Bank of America on Monday revised its third quarter growth forecast to 33%, up from 27%, and just below Goldman Sachs’ recently revised forecast for a 35% jump, up from 30%.

• While both are well above the Wall Street average (consensus is for 25.9% growth, per FactSet), the two heavyweights’ lofty predictions highlight a theme of improved expectations.

What happened: Even with fewer businesses open and social distancing restrictions in place, Americans increased their spending significantly, especially on vehicles, furniture, home renovations, electronics and at big box retail stores.

• August’s U.S. retail sales report showed a 2.6% increase from August 2019 and total sales for the June–August 2020 period were up 2.4% from the same period a year ago.
• June and July’s increases were thanks largely to direct payments and enhanced unemployment benefits paid by the government, but even after they expired Americans kept spending.

Wisconsin’s economy shrunk by an annual rate of 32.6 percent between April and June compared to the first three months of 2020, according to new numbers released Friday from the federal Bureau of Economic Analysis, an agency within the U.S. Department of Commerce.

The drop is the highest recorded by the agency since it started tracking quarterly GDP figures for states in 2005. It dwarfs some of the worst losses seen in past quarters, which hover around 8 percent.

Wisconsin’s economy totaled $314 billion in the second quarter of 2020, down from $348 billion in the second quarter of 2019.

The state’s losses put it virtually in line with the contraction seen across the five-state Great Lakes region, which shrunk overall at an annual rate of 32.8 percent. Among the Great Lakes states, Illinois’ economy fared the best in the second quarter, and Michigan saw the biggest losses.

The sectors that slowed down growth the most were durable goods manufacturing, health care and social assistance, and hotels and the food service industry.