On The Money: GDP shrinks by record amount in second quarter amid virus lockdowns | Jobless claims rise for second straight week | McConnell tees up fight on unemployment benefits

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THE BIG DEAL — GDP shrinks by record amount in second quarter amid virus lockdowns:

The U.S. economy shrunk at a seasonally adjusted annualized rate of 32.9 percent during the second quarter of 2020 as the first wave of the coronavirus pandemic spurred an economic collapse of record-breaking speed and size, the Commerce Department reported Thursday.

• Between April and June, U.S. gross domestic product (GDP) shrunk at a pace that would have wiped out roughly a third of the value of the economy if extended over 12 months, according to the Commerce Department’s advance estimate of second-quarter growth. 
• It is the largest one-quarter plunge in economic growth since the federal government began reporting quarterly GDP data. 
• On a non-annualized basis, GDP shrunk roughly 9.5 percent between the first and second quarters of 2020.

I explain what happened here.

Stunning, but not surprising: The staggering decline in GDP growth was widely expected by economists after the onset of the coronavirus pandemic forced millions of Americans into quarantine and out of work. 

• More than 20 million Americans lost their jobs in March and April as thousands of businesses were forced to close and lay off their workers.
• The mass layoffs and business closures derailed consumer spending, sapping a crucial source of strength for the U.S. economy that drives roughly two-thirds of annual growth.

The road ahead: While the economy has since regained roughly 8 million of the jobs lost during the pandemic, a second surge of cases has slowed the burgeoning recovery. Permanent job losses increased in each of the past two monthly jobs reports despite strong net totals. The number of unemployed Americans applying for weekly jobless benefits has remained above 1 million for four months.

The Labor Department reported on Thursday that initial unemployment claims rose for the second week in a row to a seasonally adjusted 1.43 million for the week ending July 25. Another 829,000 jobless workers applied for benefits through the Pandemic Unemployment Assistance program for contractors and gig workers not typically covered by traditional unemployment insurance.

The Hill’s Niv Elis has more here.

The double-dose of awful economic news also brings fresh pressure for lawmakers and the Trump administration to strike a deal on another round of economic aid. We’ve got the latest updates on the status of negotiations below.

LEADING THE DAY

McConnell tees up fight on unemployment benefits: Senate Majority Leader Mitch McConnell (R-Ky.) is turning the Senate toward a fight on federal unemployment benefits, which are set to expire on Friday.

The potential fight comes after Democrats blocked a vote on a GOP proposal Thursday.

In a sign of the stalemate, Republicans and Senate Minority Leader Charles Schumer (D-N.Y.) blocked dueling coronavirus proposals in the upper chamber earlier Thursday.

The floor drama comes as the $600 federal boost to unemployment benefits passed as part of the March bill is set to expire on Friday with no consensus in Congress about how to replace it.

“We’ve had enough rope-a-dope. We’ve had enough empty talk. It’s time to go on the record,” McConnell said from the Senate floor.

The Hill’s Jordain Carney tells us more here.

How it will go down: 

• Senate Republicans successfully brought up a bill they will use as a vehicle for their competing unemployment proposals, none of which appear to have the votes needed to actually pass next week. 
• McConnell did not say on the floor what proposal he will try to force a vote on first, and didn’t respond to follow up questions as he went back to his office. 
• But several GOP senators say they expect him to bring up the proposal from Sens. Ron Johnson (R-Wis.) and Mike Braun (R-Ind.) that would replace the expiring $600 per week federal benefit with a scalable match.

The problem: Even if the Trump administration, House and Senate strike a miraculous deal before enhanced benefits expire on Friday, it will still take weeks for state unemployment systems — most of which run on antiquated technology — to program the new benefits.

Unemployment experts have said that the actual deadline for to make a deal before benefits lapsed was last Friday, and even that was cutting it close.

GOP senators propose stimulus checks of $1,000 for both adults and children: Four Republican senators on Thursday introduced a bill that would create a second round of coronavirus relief payments, providing more money to children and less to adults compared to the first round.

Under the bill from GOP Sens. Bill Cassidy (La.), Steve Daines (Mont.), Mitt Romney (Utah), and Marco Rubio (Fla.), both adults and children would receive stimulus payments of $1,000.

The breakdown: 

• The payments that Congress provided for in legislation enacted in March, known as the CARES Act, were $1,200 per adult and $500 per child.
• Adult dependents, who are not eligible for payments under the CARES Act, would also be eligible for payments of $1,000 under the Republican senators’ proposal.
• The senators said their bill is aimed at focusing coronavirus assistance on families. They noted that under their bill, a family of two parents and two children would receive $600 more than they did under the CARES Act.

The Hill’s Naomi Jagoda walks us through the proposal here.

GOOD TO KNOW

• The tech-heavy NASDAQ composite defied other major stock indexes, gaining ground as the others dropped in the face of hard economic news.
• In a rebuke to the Trump administration, the House on Thursday approved a series of amendments to funding bills that would rein in federal forces. 
• Apple on Thursday reported a historically strong third fiscal quarter, claiming $59.7 billion in revenue — an 11 percent increase from the same time last year. 
• Amazon also reported Tuesday a surge in revenue between April and June as the COVID-19 pandemic led people to boost their online purchases.
• And Facebook on Thursday reported an 11 percent increase in revenue during the second quarter of 2020, even as the company weathers a deteriorating economy brought on by the coronavirus pandemic.