Aiming to steer more federal aid to the smallest and most vulnerable businesses, the Biden administration is altering the Paycheck Protection Program’s rules, increasing the amount sole proprietors are eligible to receive and imposing a 14-day freeze on loans to companies with 20 or more employees.
The freeze will take effect on Wednesday, the Small Business Administration planned to announce on Monday. In December’s economic relief package, Congress allocated $284 billion to restart the aid program. Banks and other financiers, which make the government-backed loans, have disbursed $134 billion to 1.8 million businesses since lending resumed last month. The money is intended to be forgiven if recipients comply with the program’s rules.
Companies with up to 500 workers are generally eligible for the loans, although second-draw loans — available to those whose sales dropped 25 percent or more in at least one quarter since the coronavirus pandemic began — are limited to companies with 300 or fewer employees. The 14-day moratorium is intended to focus lenders’ attention on the tiniest businesses, according to administration officials, who spoke to reporters at a news briefing on Sunday on the condition that they not be named.
Most small businesses are solo ventures, employing just the owner. For such companies, including sole proprietorships and independent contractors, one major impediment to getting relief money was a program rule that based their loan size on the annual profit they reported on their taxes. That made unprofitable businesses ineligible for aid, and left thousands of applicants with tiny loans — some as small as $1.
The new formula, which Small Business Administration officials said would be released soon, will focus instead on gross income. That calculation, which is done before many expenses are deducted, will let unprofitable businesses qualify for loans.
The agency is also changing several other program rules to expand eligibility. Those with recent felony convictions not tied to fraud will now be able to apply, as will those who are delinquent or in default on federal student loan debt. The agency also updated its guidance to clarify that business owners who are not United States citizens but lawful residents are eligible for loans.
Stocks on Wall Street were set to fall when markets opened on Monday, following European and Asian indexes lower. U.S. government bond yields continued to climb as investors anticipated faster economic growth and inflation.
Yields on 10-year Treasury notes rose 3 basis points, or 0.03 percentage point, to 1.36 percent, the highest in a year. The yield has risen each of the past three weeks, about 30 basis points so far this month.
The sharp rise in yields and inflation expectations in markets has led to a debate about whether the Federal Reserve will respond by pulling back some monetary stimulus, reducing the easy-money policies that have helped keep stock markets buoyant for much of the pandemic.
“Investors are increasingly confident of a ‘V’ shape global recovery, so much so that the emerging concern is not growth, but inflation,” analysts at ING Bank wrote. “Increasingly, parallels are being drawn to similar events in 2013,” they wrote, when traders panicked in a “taper tantrum” about the easing of asset purchases by the central bank, sending yields surging higher.
Fed policymakers have indicated they will look past a short-term rise in inflation and keep monetary policy loose. But not everyone is buying this message, especially as the Biden administration is pushing a $1.9 trillion economic relief package.
“The bond market continues to telegraph an increasingly confident message on the global economy and skepticism of Fed guidance,” analysts at JPMorgan Chase wrote in a note over the weekend.
The S&P 500 index is heading for its third straight day of losses. It’s set to open 0.7 percent lower.
Boeing’s shares were down 3.5 percent in premarket trading after the plane maker said 128 of its 777 jetliners should be grounded worldwide until they can be inspected following an engine failure on a United Airlines flight over Colorado. Boeing has only recently emerged from an 18-month ban of the 737 MAX.
European stock indexes tumbled, with the Stoxx Europe 600 down 0.7 percent. Even data showing that business confidence unexpectedly jumped in Germany, and plans for Britain’s lockdown to be eased over the next month weren’t enough to lift stock markets.
Oil prices rose on Monday. Futures of West Texas Intermediate, the U.S. benchmark, climbed 0.7 percent to $59.65 a barrel after last week’s volatility when a winter storm disrupted oil production in Texas.
Natural gas futures for March delivery dropped 3.6 percent. The price of natural gas jumped a week ago when the storm hit as demand for surged. Natural gas is the largest source of electricity in Texas.
The U.S. economy remains mired in a pandemic winter of shuttered storefronts, high unemployment and sluggish job growth. But on Wall Street and in Washington, attention is shifting to an intriguing if indistinct prospect: a post-Covid boom.
In recent weeks, economists have begun to talk of a supercharged rebound that brings down unemployment, drives up wages and may foster years of stronger growth, Ben Casselman reports for The Times.
There are hints that the economy has turned a corner: Retail sales jumped last month. New unemployment claims have declined from early January, though they remain high. Measures of business investment have picked up.
Economists surveyed by the Federal Reserve Bank of Philadelphia this month predicted that U.S. output will increase 4.5 percent this year, which would make it the best year since 1999. Economists at Goldman Sachs forecast that the economy will grow 6.8 percent this year and that the unemployment rate will drop to 4.1 percent by December, a level that took eight years to achieve after the last recession.
The growing optimism stems from several factors. Coronavirus cases are falling. The vaccine rollout is gaining steam. And largely because of trillions of dollars in federal help, the economy appears to have made it through last year with less structural damage — in the form of business failures, home foreclosures and personal bankruptcies — than many people feared last spring.
Lastly, consumers are sitting on a trillion-dollar mountain of cash, a result of months of lockdown-induced saving and successive rounds of stimulus payments.
“There will be this big boom as pent-up demand comes through and the economy is opening,” said Ellen Zentner, chief U.S. economist for Morgan Stanley. “There is an awful lot of buying power that we’ve transferred to households to fuel that pent-up demand.”
McKinsey & Company has become a magnet for controversy in France after the public learned of millions of euros worth of contracts to help plan vaccine distribution that has been derided for being far too slow, Liz Alderman reports for The New York Times.
The contracts — totaling 11 million euros ($13.3 million), of which €4 million went to McKinsey — were confirmed by a parliamentary committee last week. The government of President Emmanuel Macron, which has been under fire for months for stumbling in its handling of the pandemic, was forced to admit it had turned to outside consulting firms for help managing the response.
called for McKinsey to help define distribution routes for the Pfizer and Moderna vaccines, which must be kept as cold as minus 80 degrees Celsius during transport and storage. The company would benchmark France’s performance against other European countries. McKinsey experts would also help coordinate a vaccination task force comprising officials from numerous agencies, with some decision chains involving up to 50 authorities.
In early January, France had vaccinated only “several thousand people,” according to the health minister, compared with 230,000 in Germany and more than 110,000 in Italy.
Other contracts provided for Accenture, the global information technology consultancy, to roll out the campaign’s monitoring systems, and for two French consultancies, Citwell and ILL, to help with “logistical support and vaccine distribution.”
The government’s strategy focused on delivering the vaccines to 1,000 distribution points in France, from which the doses would be sent in supercooled trucks to nursing homes, clinics and local mayors’ offices. In Germany, the program was simpler: Authorities decided to administer the vaccine in 400 regional centers.
By the first week of January, France had one million vaccine doses in hand, but the delay in getting them into peoples’ arms was becoming public knowledge. The pace has recently picked up. But with 4.7 doses administered per 100 people, according to a New York Times database, France still trails neighbors like Germany and Italy.
A slew of venture-backed companies envision a world where we sit down for dinner and brag that no animals were harmed in the production of this carbon-neutral porterhouse steak. They want to Impossible Burger our entire diet.
It’s beginning to work. Consumer sales of the increasingly impressive simulacra of meat, eggs and dairy products grew 24 percent from 2015 to 2020, according to the market research company NPD Group — and 89 percent of those buyers are not vegetarians.
Joel Stein wanted to see just how realistic the lab-to-table future could be, so he threw a dinner party filled with bleeding-edge products that don’t bleed. The carefully chosen guest list consisted of his wife and their 11-year-old son.
A whiskey sour served on a coaster made of soft fake leather produced from mycelium, which was grown on a bed of sawdust and mixed with cornstalks. Beta-lactoglobulin, the main protein in whey from cow’s milk, from Perfect Day Foods replaced the egg whites for the foam on top of the drink. The whiskey was from Endless West, a company in San Francisco producing spirits without grains or barrels.
A salad of gem lettuce, roasted carrots and watermelon radishes. It was served over a smear of fake labneh and surrounded with bits of Prime Roots’ fake bacon, which is made from a mycelium called kogi, and was topped with potato-and-dill “egg bites” from Just Egg made out of mung bean protein and canola oil.
Ravioli stuffed with mushrooms and cream cheese made from beta-lactoglobulin and coconut oil, paired with a glass of sake that was made without any rice.
For dessert, a freezer full of ice cream made from Perfect Day’s protein. Late last year, Graeter’s, the 150-year-old Cincinnati ice cream institution, introduced six flavors for its Perfect Indulgence vegan line. “I like it,” Mr. Stein’s son said, and then added, “It tastes like slightly worse ice cream than normal.”