The federal budget deficit is projected to hit a record $3.3 trillion as huge government expenditures to fight the coronavirus and to prop up the economy have added more than $2 trillion to the federal ledger, the Congressional Budget Office said Wednesday.
The spike in the deficit means that federal debt will exceed annual gross domestic product next year, a milestone that would put the U.S. in the company of countries like Greece whose accumulated debt exceeds the size of their economies.
The $3.3 trillion figure is more than triple the 2019 shortfall and more than double the levels experienced after the market meltdown and Great Recession of 2008-09. Government spending, fueled by four coronavirus response measures, would register at $6.6 trillion, $2 trillion-plus more than 2019.
After the economy shut down in the spring so people could be in isolation, lawmakers and President Trump to pumped money into business subsidies, larger unemployment benefits, $1,200 direct payments and other stimulus steps that have helped the economy in the short term. Most economists are untroubled by such huge borrowing when the economy is in peril, and the debt was barely a concern when a cornerstone $2 trillion coronavirus relief bill passed almost unanimously in March.
But now that lawmakers and the White House are quarreling over the size and scope of a fifth virus relief bill, Republicans are growing skittish at the enormous costs of battling the pandemic.
Macy’s got more people to shop on its website and app, but it wasn’t enough to make up for plummeting sales inside its department stores.
Online sales were up 53%, and the company said it attracted 4 million new online customers. But sales sunk 61% inside its stores, which reopened in June after being temporarily closed due to the pandemic.
Macy’s is the country’s largest department store operator, offering a glimpse into what America’s are buying.
With people spending more time at home, shoppers bought fewer dresses, luggage and men’s suits. But they spent more on comfy athletic wear, as well as decor to spruce up their homes. Macy’s said luxury goods did surprisingly well, too, such as high-priced mattresses, perfumes and diamond jewelry.
The New York company also owns Bloomingdale’s and the Bluemercury makeup and cosmetic chain. Many of its department stores are at malls, which have struggled to attract shoppers even before COVID-19. Over the next two years, Macy’s said it plans to open smaller Macy’s and Bloomingdale’s stores that are not attached to malls.
For the holiday season, it will spread out discounts over a longer period to avoid overcrowding at its stores and continue to push shoppers to buy online and pick up at the curb.
Overall, the company reported a second-quarter loss of $431 million, or $1.39 per share, after posting a profit in the same quarter a year ago. Adjusted losses came to 81 cents per share, which was better than the loss of $1.78 per share Wall Street analysts expected, according to Zacks Investment Research.