Trump administration delays update to economic forecast as 2020 election nears

Trump administration delays update to economic forecast as 2020 election nears

The White House has taken the unusual step of deciding not to release an updated economic forecast as planned this year, a fresh sign of the administration’s anxiety about how the coronavirus has ravaged the nation just months before the election.

The decision, which was confirmed Thursday by a senior administration official who was not authorized to publicly comment on the plan, came amid intensifying signals of the pandemic’s grim economic toll.

The U.S. economy shrank at a faster-than-expected annual rate of 5% during the first quarter, the Commerce Department reported Thursday. At least 2.1 million Americans lost their jobs last week, meaning an astonishing 41 million Americans have filed for unemployment benefits since shutdowns intended to prevent the spread of the coronavirus began in mid-March.

Trump argues that the economy will rebound later this year or in 2021 and that voters should give him another term in office to oversee the expansion. But the delay of the updated midyear economic forecast, typically released in July or August, was an indication that the administration doesn’t want to bring attention to the pandemic’s impact anytime soon.

“It’s a sign that the White House does not anticipate a major recovery in employment and growth prior to the election and that it has essentially punted economic policy over to the Fed and the Congress,” said Joe Brusuelas, chief economist for the consultant RSM.

The senior administration official, who spoke on condition of anonymity, maintained that the underlying economic data would be too uncertain to convey a meaningful picture about the recovery.

But the political stakes of a weakening economy are hard to overstate, especially in states such as Pennsylvania, Michigan and Wisconsin that are critical to the president’s reelection.

According to an AP-NORC poll conducted in May, 49% of Americans approve of how the president is handling the economy. That has dipped over the last two months, from 56% who said so in March.

Still, the economy remains a particular strong point for Trump. Before the outbreak began, and even as the virus started sending shock waves through the economy, approval of how he had handled the issue was the highest it’s been over the course of his presidency.

Since then, views on the economy have reversed dramatically.

The May poll found that 70% of Americans call the nation’s economy poor, while just 29% say it’s good. In January, 67% called the economy good.

Joe Biden, the presumptive Democratic presidential nominee, and liberal economists swiftly seized on the report’s delay to argue that Trump is seeking to avoid putting his administration’s imprint on bad economic news in the months before the Nov. 3 vote.

“This desperate attempt to keep the American people in the dark about the economy’s performance is not only an acknowledgement that Trump knows he’s responsible for some of the most catastrophic economic damage in American history, but also a sign of how stunningly out of touch he is with hard working Americans,” said Andrew Bates, a Biden campaign spokesman.

While the economic forecast is being delayed, updated information about the nation’s budgetary situation will still be released as expected this summer, the senior administration official said. A significant decline in tax receipts, as well as outlays from almost $3 trillion in coronavirus-related aid bills, is sure to produce a multitrillion-dollar government deficit for the budget year ending Sept. 30.

Paul Winfree, a former Trump White House director of budget policy, doubted that the holdup on the economic update was on Trump’s radar.

“Honestly, I don’t think the president thinks about the publication of the mid-session review and the politics around it,” Winfree said.

Maya MacGuineas, president of the Committee for a Responsible Federal Budget, noted that the law requires the White House to update its budget forecast. That responsibility is even more important given the uncertainty in the economy and the trillions of dollars in aid that have already changed the trajectory of government spending, she said.

“By staying silent on how to reallocate those federal dollars under an unprecedented economic downturn, the executive branch is doing a disservice to taxpayers and avoiding tough discussions we need to have about the new fiscal reality,” she said.

Jason Furman, who led the White House Council of Economic Advisers during the Obama administration, said the Trump administration pointing to economic uncertainty as the reason to put off the forecast doesn’t hold weight.

Trump has repeatedly predicted improvement in the third and fourth quarters of this year, and the president just this week predicted 2021 is going to be “one of the best years we’ve ever had.” White House senior adviser Kevin Hassett said earlier this week that a double-digit unemployment rate was possible in November.

“You have to make decisions on incredibly uncertain information right now,” Furman said. “They are out on TV every day making economic forecasts and predictions about what’s going to happen in the economy.”

The Trump team’s economic projections, like those from earlier administrations, have tended to be overly optimistic. Last year’s review estimated that the economy would grow more than 3% last year, but the actual gains were a far more lukewarm 2.3%.

It similarly claimed that growth under Trump would cause the budget deficit to fall as a share of the economy. That estimate could never have anticipated the outbreak of the coronavirus that forced more than $3 trillion in aid as the deficit is on course to reach new highs.

In 2017, the Trump administration criticized the Obama administration for rosy expectations of growth during the Great Recession more than a decade ago. An updated forecast in the mid-session review could make the Trump White House a similar target for criticism.

Jared Bernstein, a former economic adviser to Biden, said a timely update on the state of the economy is more important than ever.

“The idea that you’d abrogate that responsibility now is pretty serious fiscal malpractice,” Bernstein said. “They don’t like the numbers they’d have to write down. This is a White House that is in denial about the trajectory of the economy.”

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Why the pet industry hopes Americans will start treating their cats more like dogs

Why the pet industry hopes Americans will start treating their cats more like dogs

Humans worshipped cats in pharaonic times and have been their servants, one way or another, almost ever since then. But until recently, the felines have not been getting that kind of deference in the modern-day United States from a pet products industry more focused on their canine counterparts.

It’s easy to see why doggos get so much attention from pet stores and manufacturers. Among U.S. pet owners, spending per dog last year was $1,381, while for cats it was $908, according to the American Pet Products Association (APPA). Most cats are much smaller than most dogs, so they consume less food. Cats are much more difficult to coax into a visit to the vet. And there are fewer cat owners to cater to: 43 million U.S households have a cat, but there are 63 million with a doggie.

Still, industry players, from big-box retailers to foodmakers to Silicon Valley entrepreneurs, are hopeful that they can eventually get pet owners to spend on their cats like they spend on their dogs—and thus expand an underexplored market. Those folks are seeing promising signs in some product lines: An AlixPartners analysis of APPA’s data found that expenditures on vitamins, treats, toys, and grooming aids are all seeing significant growth among cat owners. (For more, see “It’s a dogfight at America’s pet stores as COVID-19 upends the $96 billion industry.”)

Right now, cats account for only about 7% of the $7 billion spent annually on pet treats. Food makers think they can shake that up—not least because, in the era of Instagram and sheltering in place, teaching old cats new tricks is more rewarding for their owners. “You have cat parents who want to reward and engage their cats in new and different ways,” says Rob Ferguson, interim SVP for pet food, pet snacks, and supply chain at J.M. Smucker, which earlier this year launched cat treats under its Rachael Ray Nutrish brand. It remains to be seen whether cats feel the same way, but the industry is prepared to feed the beast, so to speak. “The cat treats market has been ‘doggified,’” says David Sprinkle, an analyst with research firm Packaged Facts.

Cat food has not seen the kind of proliferation of innovation dog food has seen. While dogs are omnivores who can be persuaded to eat such health food staples as quinoa and broccoli slaw, cats are mini-carnivores related to lions and tigers, with fairly limited dietary interests. “Cats…don’t gravitate toward natural food quite as well—they like the sound of a can,” says PetSmart CEO J.K. Symancyk. Of course, foodmakers know that convincing the owners of a food’s healthfulness is more important than convincing the cat: Smucker last year launched grain-free Meow Mix.

Cats…don’t gravitate toward natural food quite as well—they like the sound of a can.

PetSmart CEO J.K. Symancyk

In the startup world, new ventures in the pet space have also predominantly focused on dogs. Leonid Sudakov, president of Kinship, a $100 million investment fund set up by Mars Petcare, thinks that focus has something to do with Silicon Valley bros being more likely to own dogs than cats. But exceptions are beginning to emerge. Despite its name, JustFoodforDogs, which makes “human-grade” food, has a small but growing menu for cats. CatPerson, a startup that sends boxes of treats and supplies to cat servants, launched in March. And Kinship has put money into a Chinese company called Mollybox, a subscription service for food and supplies focused on cats, because he thinks they will spur the next big boom in pet products. (For more, see “10 big business deals that are changing the pet industry.”)

The coronavirus pandemic could also bolster veterinary spending on cats. Felines visit the vet far less often than dogs because of how traumatic leaving the house can be for them (and, these days, for their owners). Americans currently spend $650 per year per dog on vet visits, compared to $374 per cat. But the growing use of telehealth and virtual consultations could narrow that gap.

“Cats have been a strong No. 2 for a long time,” says Steve King, CEO of the APPA. That comment that would likely elicit a hiss from any feline that could be bothered to react. But if they cared, cats might find solace in the fact they could be catching up.

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Salesforce CEO Marc Benioff describes what office life will be like after COVID-19

Salesforce CEO Marc Benioff describes what office life will be like after COVID-19

Life for thousands of Salesforce employees won’t be the same after they return to the office following months of working remotely during the coronavirus pandemic. 

Salesforce CEO Marc Benioff explained on Thursday during a Fortune CEOI video call about how the business software giant has been navigating the uncertain times, describing the crisis as “unlike anything I’ve ever been through.”

“This is my first pandemic Alan, so I don’t know if I have the right answers,” Benioff told Fortune CEO Alan Murray, who was moderating the event. 

Benioff said that 50 of the company’s 50,000 employees had contracted the coronavirus. Like other tech companies including Amazon and Microsoft, Salesforce urged its employees to work from home in early March, just before shelter-in-place rules started spreading across the country.

General anxiety about the coronavirus coupled with the isolation of being alone at home took an emotional toll on Salesforce’s workforce, with 36% saying they were experiencing mental health issues, Benioff said. The company now does daily mental health check-ins and calls with employees to gauge employee well-being, he explained.

Benioff cautioned that while Salesforce and other companies are starting to take steps “to get business happening” like it was previously, “we have to remember the virus is still out there.”

“That is a question mark,” Benioff said. “And there’s a high likelihood for the virus returning in the fall—that has to be taken into consideration.”

He noted that companies must take in account numerous scenarios for re-opening their businesses, even planning for the possibility of the pandemic extending until the middle of next year.

Salesforce workers in South Korea will likely return to the office on May 11, he said. Health experts have praised South Korea for its early actions to reduce the spread of the virus, such as quickly implementing nationwide coronavirus testing.  

But office life will be different for those South Korean Salesforce employees, Benioff said. Workers will have their temperatures checked daily and will need to tell management if they’re feeling sick.

Workers will be “queued into the elevator” in an orderly manner and they will be ordered to allow for “appropriate distancing on the floors,” Benioff said. Salesforce will use its own contract-tracing technology to warn others of any spread of the virus. Employees will be notified if fellow Salesforce workers get a fever, and all workers will then be required to work from home for at least two weeks, he said.

When Salesforce workers in San Francisco, where the company is based, return to the office during the first week of June (as is currently planned), Benioff said that they will face a similar situation as their South Korean colleagues.

“When you come back, we won’t have 10, 20 people in the elevator—we will have a few people,” Benioff said. “They will get a ticket [informing them] when they can arrive in the elevator, much as you would arrive at Disney for a ride.” 

Salesforce may even install plexiglass dividers at people’s desks, which would act like corporate versions of salad bar sneeze guards. 

As Benioff put it, “It will be a slightly different work environment than it is today.” 

“A jar of Gummi Bears is not going to be there,” Benioff said. 

More must-read tech coverage from Fortune:

—Remote work, online grocery shopping, cord cutting: What coronavirus trends will stick
—How T-Mobile shifted 12,000 employees to work from home in less than two weeks
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—The startup founder in India striving to improve mass transit through the pandemic
—Listen to Leadership Next, a Fortune podcast examining the evolving role of CEO
—WATCH: Zoom’s ups and downs since the coronavirus crisis

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