The daily business briefing: December 17, 2020

1. Fed keeps rates steady, continues bond-buying stimulus

The Federal Reserve held interest rates near zero at the end of a two-day policy meeting on Wednesday. The Fed upgraded its economic outlook but said it would continue its bond-buying stimulus efforts "until substantial further progress has been made" toward securing the recovery from the coronavirus crisis and meeting its targets of full employment and 2 percent inflation. The statement, which came as coronavirus hospitalizations and deaths remained near record levels, signaled that the central bank is prepared for a prolonged stimulus campaign. The economy is expected to slow significantly through early 2021 due to the coronavirus surge. "Getting through the next few months is key," Fed Chair Jerome Powell said. "We do have the ability to buy more bonds and buy longer-term bonds and we may well use that."

USA Today

2. U.S. sees biggest yearly jump in poverty rate in 60 years

About 7.8 million Americans have fallen below the poverty line — an income of $26,200 for a family of four — over the past five months, according to new data released Wednesday by the University of Chicago and the University of Notre Dame. The change contributed to the biggest jump in poverty in a single year since the government started tracking the figures 60 years ago, although overall U.S. poverty levels remain low by historical standards. The poverty rate increased to 11.7 percent in November, up 2.4 percentage points since June, marking the fifth straight monthly increase. The situation stems from the coronavirus pandemic and the tough labor market it has created, as well as dwindling government aid.

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The Washington Post University of Chicago

3. Texas leads GOP states in monopoly lawsuit against Google

Ten state attorneys general on Wednesday filed a lawsuit accusing Google of illegally abusing its monopoly over online ad technology, saying the internet giant overcharged publishers for ads and squeezed out rivals. The attorneys general, all Republicans, also said Google reached an agreement with Facebook to reduce competition for ad revenue. "If the free market were a baseball game, Google positioned itself as the pitcher, the batter, and the umpire," Texas Attorney General Ken Paxton said in a video on Twitter announcing the plans. Google called the suit "baseless," and vowed to fight it. The case came as Google, Amazon, Apple, and Facebook face numerous legal challenges to their dominant roles in the internet industry.

The New York Times

4. November retail sales fall by 1.1 percent

Retail sales fell by 1.1 percent in November, their biggest drop in seven months, the Commerce Department reported Wednesday. The consumer spending cuts were sharper than economists expected. The decline marked a dangerous sign for the economy because it came in a period that includes the start of the crucial holiday shopping season, which can account for a quarter or more of retailers' annual sales. Federal data also indicated that October sales fell by 0.1 percent, rather than rising by 0.3 percent as initially reported. The figures reinforced other economic data indicating that the recent surge in the coronavirus pandemic has started to slow the economy as local and state governments tighten restrictions on businesses and people avoid going to stores to reduce the risk of infection.

The Associated Press

5. Stock futures rise as Congress nears coronavirus relief deal

U.S. stock index futures rose early Thursday after congressional leaders said they were nearing a deal on a $900 billion coronavirus stimulus package. Futures for the Dow Jones Industrial Average, the S&P 500, and the Nasdaq were up by roughly 0.5 percent several hours before the opening bell. The proposed coronavirus relief compromise is smaller than Democrats wanted, but would include aid to struggling small businesses and $600 to $700 checks to individuals. The package would be "big enough to help bridge the economic gap to the other side for small businesses and the hardest hit industries, considering the pandemic could be close to over as early as Q2 2021," wrote The Sevens Report founder Tom Essaye. The measure reportedly would not include liability protections for businesses.

CNBC