The Wall Street Journal - USA (2020-11-16)

A4| Monday, November 16, 2020 PWLC101112HTGKRFAM123456789OIXX ** THE WALL STREET JOURNAL.

7.2% less on services in the

third quarter than a year be-

fore. That left money to boost

purchases of goods by 6.9%

over the same period. But much

of this could reverse once the

virus is subdued.

Meantime, the change in how

they buy things looks more last-

ing and spans generations.

“I will never go to a grocery

store again in my life because

it’s just so convenient and easy”

to shop online, said Allan Schil-

ter, an 81-year-old retired ac-

countant in Springfield, Mo.

Mr. Schilter picks up his gro-

ceries curbside at Walmart, af-

ter ordering them online. “It’s

safer; you don’t have to go into

the store.”

E-commerce’s share of U.S.

retail sales rose to 16.1% in the

second quarter of this year,

from 10.8% a year earlier and

0.9% of total retail sales two de-

cades ago, according to the

Commerce Department.

At Macy’s Inc., e-commerce

now accounts for about 43% of

sales, up from 25% before the

pandemic. To meet the in-

creased demand, the retailer

has joined with Google to im-

prove its search-engine results

and added same-day delivery

for online orders.

“These are new muscles

we’ve developed over the last

several months,” said Matt Baer,

Macy’s chief digital officer.

Shifts in consumer behavior

are driving development of new

distribution methods, such as

online-only stores, or “dark

stores,” where online purchases

are gathered by workers for dis-

tribution to customers. Shop-

pers aren’t allowed in to browse

the shelves or squeeze the fruit.

Whole Foods Market Inc.,

which is owned by Amazon.com

Inc., opened its first online-only

store in Brooklyn, N.Y., in Sep-

tember, part of a strategy to

meet increased demand for

food delivery. The grocery-store

chain and delivery service Ama-

zonFresh have increased overall

delivery capacity by more than

160% since March. Whole Foods

has increased its pickup loca-

tions to all its 500 U.S. stores.

The pandemic halted in-store

dining, so some stores have re-

purposed parts of their dining

areas as spaces to pack pickup

and delivery orders.

The way people pay for

things is also shifting in ways

likely to last.

A July survey by the Federal

Reserve Bank of San Francisco

found that 28% of respondents

said they are avoiding using

cash and using card payments

instead due to the pandemic.

Consumer habits can change

after someone tries a new way

of doing things two or three

times out of necessity, said Jon-

wise would have taken 10 years
in the U.S., the firm concluded.
The lockdowns, social dis-
tancing and other effects of the
crisis forced many consumers
to try online shopping, medical
appointments, yoga classes and
tutoring services. And people
new to the e-commerce game
are “finding out it’s pretty use-
ful,” said Brian Ruwadi, a senior
partner at McKinsey.
This spurred businesses to
step up their digital services.
“You see significant movement
on both sides, and that has to
result in a significant increase, a
fundamental shift in accelera-
tion,” he said of the changes in
business and consumer behavior.
“Consumers won’t go back to
shopping the way they did be-
fore the pandemic,” said Stefan
Larsson, the president of Calvin
Klein and Tommy Hilfiger par-
ent PVH Corp. “They will go
forward into the new normal.”
PVH is speeding up digital
investments, including building
new data systems and ware-
houses, Mr. Larsson said.
The rapid transition has po-
sitioned some businesses to
thrive and grow, while others
struggle or fail. Among the win-
ners are those facilitating the
shifts, including online retailers
and service providers, technol-
ogy firms and companies deliv-
ering the goods people are buy-
ing online. Peloton Interactive
Inc. said its revenue more than
tripled to $757.9 million in the
September quarter. The com-
pany is capitalizing on surging
demand for at-home fitness
equipment.
Faltering businesses include
those unable to make the tran-
sition, such as many restaurants
and bricks-and-mortar stores.
Retail-store closings in the
U.S. reached a record in the
first half of 2020, and the year
is on pace for record bankrupt-
cies and liquidations, according
to a report on the downturn’s
severity.
Some pandemic-driven
changes in what people spend
money on might prove tempo-
rary, such as the shift away
from activities requiring prox-
imity to other people. With
many people still shunning air
travel and indoor dining, and
with entertainment ticket win-
dows still dark from Disneyland
to Broadway, consumers spent

ContinuedfromPageOne

Consumer

Habits See

Big Shift

U.S. NEWS

press the General Services Ad-

ministration this week to issue

a designation that would allow

his aides to meet with Health

and Human Services officials

over the looming logistical

hurdles of manufacturing and

distributing a vaccine for

Covid-19, the disease caused

by the coronavirus.

“There are people at HHS

making plans to implement

that vaccine. Our experts need

to talk to those people as soon

as possible so nothing drops in

this change of power we’re go-

ing to have on Jan. 20,” Mr.

Klain said Sunday on NBC.

He also noted that Mr. Bi-

den’s coronavirus advisory

board can’t contact the White

House coronavirus task force or

Dr. Anthony Fauci, the U.S. gov-

ernment’s top infectious-dis-

ease expert, without that desig-

nation.

The Trump administration

hasn’t issued a typically routine

technical designation that

would allow Mr. Biden’s staff to

view detailed classified infor-

mation, send representatives to

embed with government agen-

cies and have the State Depart-

ment facilitate calls with for-

eign leaders. The delay could

also hamper Mr. Biden’s selec-

tion of cabinet officials because

the ability to conduct back-

ground investigations for secu-

rity clearances is frozen.

The GSA designation has be-

come the focal point in the po-

larized debate around whether

President Trump should con-

cede after Mr. Biden earlier this

month secured the electoral

votes necessary to become the

next president, according to the

Associated Press and major

media organizations.

While Senate Republicans

have largely backed Mr.

Trump’s right to mount elec-

tion challenges, an increasing

number have called for Mr. Bi-

den to receive intelligence

briefings as part of a transition.

An aide to Mr. Biden’s tran-

sition team said they hoped to

“continue a dialogue” with the

GSA about the certification but

didn’t elaborate on what other

measures are under consider-

ation to compel the matter.

Dr. Fauci said in a CNN in-

terview Sunday that the gov-

ernment’s public health offi-

cials “of course” would be more

effective if they could work

with Mr. Biden’s incoming

team.

In past elections, the GSA, an

agency that manages real estate

and other government logistics,

has sent letters identifying the

winner within days of the elec-

tion being called by the AP and

other major news organiza-

tions, before the results were

made official by the Electoral

College. The only time the re-

sults of the election weren’t for-

malized quickly was in 2000,

when the results of the election

weren’t known until December.

Mr. Trump hasn’t conceded

the election, but has made re-

cent comments suggesting he

believes Mr. Biden won. On

Sunday morning, referring in a

Twitter message to Mr. Biden,

said: “He won because the Elec-

tion was Rigged.” But he

quickly reversed himself, saying

later on Twitter that Mr. Biden

“only won in the eyes of the

FAKE NEWS MEDIA. I concede

NOTHING!”

Mr. Trump continues to

make allegations of widespread

voter fraud. No evidence of sig-

nificant voter fraud has sur-

faced, and acting Homeland Se-

curity Secretary Chad Wolf last

week said the presidential con-

test was “the most secure elec-

tion in U.S. history.”

—Sabrina Saddiqui

contributed to this article.

WASHINGTON—President-
elect Joe Biden’s top adviser
said a government agency’s de-
lay in officially acknowledging
his electoral victory could hin-
der his efforts to prepare for
the distribution of a coronavi-
rus vaccine, among other criti-
cal issues.
Ron Klain, named to be-
come Mr. Biden’s White House
chief of staff, said Sunday that
the transition team would

BYKRISTINAPETERSON

Transition Team Pushes for Critical Access

Top Biden aide says

vaccine distribution

preparedness affected

by Trump’s roadblocks

BYKATEDAVIDSON

Jobless Benefits for Millions Near an Expiration Date

Matt Bertenthal of San Francisco used to go to the gym beforethe pandemic, but now rides his bike on his deck using a stationary device.

athan Silver, CEO of Affinity So-

lutions, a firm that aggregates

consumer credit- and debit-card

spending data. And the pan-

demic triggered dramatic shifts,

he said.

One is the move from bricks-

and-mortar gyms to home

workouts. Beyond buying tread-

mills and rowing machines, con-

sumers are also using internet-

connected equipment and apps

to enjoy online classes and live-

streamed group activities.

“I don’t anticipate going back

toagymforyearsafteravac-

cine is available,” said Matt Ber-

tenthal, 37, an attorney at soft-

ware company Atlassian in San

Francisco. Before the pandemic,

he used a local gym once or

twice a week, spending $110 a

month on membership. He

stopped going in mid-February

amid concerns about the virus.

Now he surfs, uses apps for

fitness workouts and rides his

bike on his deck using a station-

ary digital training device three

to five days a week.

“It’s a really fantastic es-

cape,” he said.

—Suzanne Kapner

contributed to this article.

FROM TOP: ANNE BERTENTHAL; STEPHANIE KEITH/GETTY IMAGES

Elon Musk’s SpaceX

launched four astronauts into

orbit Sunday evening, marking

the company’s first full-fledged

operational mission with hu-

mans on board and beginning

regularly scheduled commercial

flights to the International

Space Station.

Carrying a full complement

of crew members, the mission

boosted SpaceX’s stature as the

first company approved by the

National Aeronautics and Space

Administration to ferry people

routinely into space. It also pro-

vided a capstone for the

agency’s strategy of using pub-

lic-private partnerships to accel-

erate human space exploration.

Blastoff of the Crew Dragon

capsule, named Resilience, at

7:27 p.m. ET from Cape Canav-

eral, Fla., was the start of a

roughly 27-hour trip to link up

with the space station. It fol-

lowed NASA’s formal decision

last week designating SpaceX’s

Falcon 9 rocket and Dragon

capsule as safe to transport as-

tronauts for routine crew rota-

tion and other operational

flights. Months before, two

other NASA astronauts com-

pleted a smooth test flight of

an earlier version of the cap-

sule to the station.

The Falcon 9 slowly left the

pad precisely on schedule as re-

quired, churning out more than

1.3 million pounds of thrust, ac-

celerating with a deep rumble

and trailing a bright orange

plume that illuminated the

night sky. Roughly 12 minutes

later, ground controllers an-

nounced the capsule separated

safely from the rocket’s upper

stage and its systems appeared

to be operating normally.

A little earlier, the lower

portion of the rocket, including

its nine main engines, returned

and gently touched down verti-

cally on an ocean platform.

SpaceX and NASA already have

agreed to reuse that lower

stage—something agency offi-

cials haven’t previously permit-

ted for human flights—to power

the company’s next commercial

crew launch in the spring.

NASA’s endorsement of the

Dragon’s safety was the long-

term goal of the company,

throughout six years of roller-

coaster development and testing.

During Sunday’s launch,

happy shouts and clapping

echoed from SpaceX ground con-

trol in Hawthorne, Calif.

SpaceX’s president and chief

operating officer, Gwynne Shot-

well, underscored the com-

pany’s plans over the next 15

months to launch seven Dragon

capsules on behalf of NASA, in-

cluding three cargo versions.

Sunday’s mission, she said,

“represents the initiation of a

Dragon in orbit continuously”

and “really the beginning of a

new era in human space flight.”

Since the retirement of the

shuttle fleet in 2011, NASA has

envisioned eventually relying

on privately developed and op-

erated space capsules to handle

human orbital missions.

It was the first time NASA

has put four astronauts into a

capsule. The crew—which in-

cludes a Japanese astronaut

who previously flew on the

space shuttle, Soichi Noguchi—

plans a six-month stay. The

mission also includes Victor

Glover, who would be the first

Black person to spend extended

time on the station as a crew

member, as well as Michael

Hopkins and Shannon Walker.

BYANDYPASZTOR

SpaceX

Launches

Landmark

Mission

WASHINGTON—Two key
programs Congress passed this
year to expand and enhance un-
employment insurance expire
on Jan.1, leaving millions of
people without benefits unless
lawmakers can break a months-
long deadlock over a fresh
round of pandemic relief.
That raises the risks that
families of jobless workers will
miss payments on mortgage or
auto loans, face foreclosure or
eviction and fall into poverty,
economists warn—just as a ris-
ing tide of coronavirus infec-
tions threatens to undercut the
economic recovery.
Unemployed workers in
most states get 26 weeks of
benefits, plus additional weeks
when the economy is poor.
Congress in March provided an
additional 13 weeks of benefits.
It also expanded eligibility to
include people who ordinarily
wouldn’t qualify for benefits,
such as freelancers, contract

workers and people who were

forced out of work by the pan-

demic—for example, because

they contracted the disease or

had to care for a sick family

member.

As of Oct. 24, the latest

week for which data are avail-

able, more than 13 million peo-

ple were enrolled in one of the

two programs. The number of

people receiving extended ben-

efits is expected to rise in com-

ing weeks as more workers—

many of them jobless since the

pandemic began—exhaust their

regular benefits.

Allowing the programs to

lapse would reduce income by

roughly $150 billion in the first

quarter for workers whose ben-

efits end, Deutsche Bank senior

U.S. economist Brett Ryan esti-

mated. Weaker consumer

spending would shave a per-

centage point off economic out-

put, he said.

“You’re not going to see a

complete collapse in activity,”

Mr. Ryan said. “But those

knock-on effects, socially and

creditwise, are harder to quan-

tify and make it a more serious

situation.”

Laid off workers have al-

ready pulled back on spending,

after an extra $600 in weekly

jobless payments that Congress

authorized ended in August.

The extra benefits came on top

of regular unemployment

checks from states and played a

key role in limiting the eco-

nomic damage from the pan-

demic.

In states with less generous

unemployment insurance, such

as Florida and Alabama, some

workers who were laid off in

March have already exhausted

their state and federal benefits

or will before year-end.

“They’re close to gone for a

lot of people,” Chad Stone,

chief economist at the left-lean-

ing Center on Budget and Pol-

icy Priorities, said of the pay-

ments that have kept many

households afloat for the past

eight months.

Several other aid programs

are set to lapse at the end of

the year, including a nationwide

eviction moratorium, a suspen-

sion of student-debt payments

and tax breaks for businesses.

Meanwhile, local govern-

ments are weighing new re-

strictions on schools, busi-

nesses and travelers.

Businesses that were able to

move operations outdoors may

soon be constrained by cold

weather in much of the country.

Senate Majority Leader

Mitch McConnell (R., Ky.) and

House Speaker Nancy Pelosi

(D., Calif.) have both said Con-

gress should pass another eco-

nomic relief bill by the end of

the year. But they remain far

apart on the cost.

Democrats seek a bill top-

ping $2 trillion, which would

extend the programs set to ex-

pire and restore the $600-a-

week supplemental benefit. Re-

publicans favor a $650 billion

proposal that would increase

payments by $300 a week but

not renew the expiring pro-

grams. President-elect Joe Bi-

den has also said he wants to

see an aid bill passed by year’s

end.

The labor market has im-

proved faster than many econo-

mists expected. The unemploy-

ment rate fell last month by a

full percentage point, to 6.9%,

well below the 9.3% that Fed-

eral Reserve officials in June

projected to see by the end of

the year.

Yet monthly job gains have

slowed since the summer, and

employers added 638,000 jobs

in October, less than half of the

1.5 million added in August.

Two programs that

Congress passed to

expand benefits

expire on Jan.1.

RECESSIONS

2000 ’05 ’10 ’15 ’

0

5

10

15%

E-commerceasashare

ofretailsales

Source: Commerce Department via St. Louis Fed

Note: Seasonally adjusted