The Day at a Glance | July 14 2020

Disagreement in US Congress over extending aid

The emergency program carried out by the US government, which provides 600 weekly dollars as unemployment insurance, will come to an end in two weeks and the US Congress has started debating whether or not to extend this measure. Legislators in Washington started having discussions over a new fiscal package that backs assistance to unemployed people, but they have not reached an agreement. Democrats are looking to extend the program just as it was implemented since April, however, Republicans and the Trump Administration are looking to reduce the amount in order to incentivize workers to return to the labor market. According to a study carried out by the University of Chicago, two thirds of citizens eligible for support are receiving more income from the government than from their own jobs. The program`s suspension would have negative implications for the economy, given the fact that unemployment is still high and that COVID-19 cases are accelerating at a fast rate in one third of the country. Congress is expected to approve a package within the next two weeks – before its recess, which begins on August 3rd.

Positive data in China due to global reopening

Chinese import and export figures showed growth in the month of June and exceeded estimates, which is a sign of a greater recovery in demand – both internal and external. Exports grew 0.5% annually while imports increased 2.7%, both setting above contractionary expectations on behalf of analysts. The rise in exports responds to a global return to activity as more countries carry out reopening plans, especially in the US and Europe. However, the most positive piece of news came from imports, whose increase suggests that internal demand has taken a more solid step towards recovery despite the virus`s persistent risks. Notwithstanding, compared to 2019, the first semester of 2020 saw Chinese exports contract (-) 6.2% and imports shrink (-) 7.1%.