Initial jobless claims surged to a seasonally adjusted 861,000 in the second week of February, according to data released Thursday by the Labor Department, a sign that the labor market continues to struggle to recover from the COVID-19 pandemic, The Hill reported. Data for recent weeks, which showed claims dipping below 800,000 for the first time in weeks, has regularly been revised upward. Last week's 793,000 figure was revised upward by 55,000, reaching 848,000. Weekly jobless claims remain similar to their August levels, having left behind the slight improvement seen in October and November, and briefly in January. The latest data comes as Congress pushes to advance a $1.9 trillion COVID-19 relief package, including an extension for emergency unemployment benefits that are set to run out after March 14. An additional 516,299 people filed initial claims through Pandemic Unemployment Assistance, one of the expiring programs that extend jobless benefits to the self-employed and gig economy workers. That brings the total number of unadjusted initial claims above 1.3 million. By the end of January, 18.3 million people were filing continuing claims, according to the Department of Labor.
Mostly United over COVID-19 Relief Legislation, Democrats Face Divisions over Biden’s Massive Second Economic Plan
Even as President Biden and congressional Democrats work to pass their $1.9 trillion coronavirus relief bill, they’re bracing for the next big legislative scramble, this time over another massive spending bill that’s already drawing intense lobbying and threatening Democratic unity, the Washington Post reported. Biden’s next package could be far pricier than the coronavirus bill. Although plans remain fluid, it’s expected to center on a major infrastructure investment while also tackling other priorities, such as clean energy, domestic manufacturing, and child and elder care. However, as the next must-pass bill in a divided Congress where legislative opportunities will be scarce, it has unleashed a torrent of other demands, as advocates for issues from climate change to immigration push to get included. The cacophony of competing demands is already threatening to divide Democrats who have largely united behind the coronavirus relief bill, which is expected to advance in the House next week despite simmering disagreements over a handful of issues, including a minimum-wage hike to $15. Moderate-leaning Democrats could balk at spending trillions more on issues that range far afield from emergency economic relief, and fights are already brewing over how far to go in raising taxes to pay for what comes next.
COVID-19-Stricken Concert Halls, Clubs Await $15 Billion Grant Program
When Steve Sheldon learned that Congress had authorized a $15 billion grant program for companies that host live events, he felt relieved. With cash reserves at his Long Beach, Calif.-based EPIC Entertainment Group running low, a grant would help him keep paying his two workers, the Wall Street Journal reported. A month later, the Small Business Administration has yet to say when the program will launch, and Mr. Sheldon said he has been confused by eligibility guidelines the agency has issued so far. Feeling that he couldn’t afford to wait for clarity on such issues, Sheldon instead applied for a potentially much smaller amount under a separate coronavirus aid program of forgivable loans for small businesses that is available now. “At this point, it’s either accept funding now and keep moving forward, or two people would have to be let go,” Sheldon said. The urgency surrounding his decision reflects the dire circumstances facing live-event businesses. Labor Department data show that the arts, entertainment and recreation industry lost 800,000 jobs as of January compared with last February, just before the pandemic took hold. The U.S. economy overall lost almost 10 million jobs over the same period. Many live-event businesses have found it difficult to operate even at reduced capacity because of government restrictions and lack of demand as Americans avoid gatherings for fear of contracting the coronavirus. (Subscription required.)
Corporate Spending Plans Tweaked as Recovery Pace Remains Uncertain
Finance chiefs are fine-tuning the way they draft their annual spending plans, opting for more frequent check-ins to review and authorize costs throughout the year after the coronavirus pandemic rendered their 2020 budgets virtually obsolete, the Wall Street Journal reported. The pandemic revealed shortfalls in companies’ financial planning last year after government lockdowns aimed at curbing the spread of COVID-19 upended revenue projections and forced companies to rescind guidance. The impact of the virus has varied across industries, lifting profits at grocery chains and makers of cleaning supplies while causing ongoing financial pain for retail, travel and hospitality businesses. The core problem facing chief financial officers is that traditional methods for developing a budget are backward-looking by design, meaning they can quickly become useless in a crisis. For many companies, budgeting is a monthslong annual ritual that begins in the fall. CFOs develop detailed spending and revenue plans, which are approved by their boards at the beginning of the year. Finance departments then forecast their actual performance against their budget goals. “If we start from last year with the pandemic, comparing your actuals to your budget [was] pretty much meaningless,” said Gina Gutzeit, leader of the office of CFO solutions at FTI Consulting Inc., a business advisory firm. The pandemic has prompted some companies to update their spending plans more frequently, such as monthly or quarterly, and to rely on forecasts that look beyond the current year. The process, known as rolling forecasting, has been around for years but has become more popular in recent months, advisers said. (Subscription required.)
Submissions for Asset Sales Committee’s “Asset Sale of the Year” Award Due by March 5!
ABI’s Asset Sales Committee has opened the application period for its 3rd Annual Asset Sale of the Year Award. Submissions are due by Friday, March 5, 2021. Please see below for more information regarding the contest as well as previous winners. Criteria for submissions include:
• Completion of a sale that was strategic and provided stakeholders with value;
• A display of excellence across the full spectrum of the sale process, from the initial targeting through pursuit, structuring and financing to complete a transaction;
• A sale that reflects a high level of professional expertise in the design of the transaction, and that tested creativity and skill in completing the transaction; or
• A sale of strategic or legal significance and impact (winning entries might focus on overcoming challenges to complete the sale, innovative financial engineering, and motivating agreement across multiple stakeholders)
A bankruptcy sale (via either § 363 or a plan) that closed between January 1 and December 31, 2020.
At least one professional involved in the sale must be a member of the Asset Sales Committee as of the nomination deadline. Self-nominations are permitted.
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New on ABI’s Bankruptcy Blog Exchange: Fed's Brainard Backs Stress Test-Like Exercise to Address Climate Risks
Federal Reserve Gov. Lael Brainard said "scenario analysis" is distinct from traditional regulatory tools to assess capital strength, but can measure the long-term impact of weather events and the transition to a greener economy, according to a recent blog post.
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