Senate adjourns without extending expiring unemployment benefits

The Senate has adjourned until 3pm on Monday, as Congress failed to reach an agreement on extending extra unemployment benefits that are set to expire on Friday.

Why it matters: Tens of millions of Americans are out of work and have been receiving $600 per week on top of their regular unemployment payments. That money has been used both to pay expenses and to prop up the broader economy via consumer spending.

The state of play: Congress and the Trump administration are still painfully deadlocked over the next stimulus bill, with at least 20 Senate Republicans pledging to vote "no" on another massive relief package no matter what.

• Sen. Ron Johnson (R-Wis.) attempted Thursday afternoon to unanimously pass a short-term extension of the benefits at a reduced level of $200 per week, which was summarily rejected by Minority Leader Chuck Schumer (D-N.Y.).
• Schumer then attempted to pass the $3 trillion relief bill that House Democrats approved in May. That, too, was blocked and condemned by Majority Leader Mitch McConnell (R-Ky.) as a "totally unserious proposal."

Between the lines: "The procedural shenanigans were not meant to actually enact policy, but rather to help further the political blame game as Congress prepared to leave town without an agreement," the Washington Post notes.

The big picture: The staggering 32.9% contraction in annualized GDP last quarter quantifies just how big a hole the U.S. economy is in — dwarfing the previous record set in 1958, when GDP shrank at an annualized 10% rate.

• If it wasn’t clear before today, the economy is going to need support to dig its way out. And that assumes we don’t fall back in, which may already be happening as the coronavirus surge forces some states to clamp down again.

• "The path of the economy will depend significantly on the course of the virus," Fed chair Jerome Powell said yesterday. "It's so fundamental."

Zoom out: When the U.S. shut down its economy and passed the $2.2 trillion CARES Act in March, a GDP contraction of this size was not out of the realm of possibilities, notes former Treasury official Tony Fratto.

• What nobody was projecting was that weekly unemployment claims would still be running at 1.4 million in July — the product of a failed coronavirus response.

The bottom line: More than 30 million Americans could see their incomes drop 50%–75% when the unemployment benefits expire on Friday.