Raphael Stevens

The Biden administration threatened to rescind millions of dollars in federal coronavirus aid for Arizona, accusing the state of using the funds to undermine efforts to stop the spread of the virus.
Republican Gov. Doug Ducey’s office has 60 days to either make changes to two federally subsidized state school programs totaling $173 million, or redirect the money toward “eligible uses,” the Treasury Department said in a letter.
If Arizona fails or refuses to comply with its demands, the Biden administration may take back that stimulus money and withhold a second tranche of pandemic relief funding, Treasury said.

U.S. first lady Jill Biden speaks with people during a tour of a COVID-19 vaccination site at Isaac Middle School in Phoenix, Arizona, June 30, 2021.
Carolyn Kaster | Pool | Reuters

The Biden administration on Friday threatened to rescind millions of dollars in federal coronavirus aid for Arizona, accusing the state of using the funds to undermine efforts to stop the spread of the virus.
Republican Gov. Doug Ducey’s office has 60 days to either change two federally subsidized state school programs totaling $173 million, or redirect the money toward “eligible uses,” the Treasury Department said in a letter.

The programs impose conditions that discourage compliance with wearing masks in schools, contradicting guidance from the Centers for Disease Control and Prevention on how to reduce coronavirus transmission, the letter said.
If Arizona fails or refuses to comply with Treasury’s demands, the Biden administration may claw back that stimulus money and withhold a second tranche of pandemic relief funding, Treasury said.
Ducey’s office did not immediately respond to CNBC’s request for comment on the letter.
The federal funds in dispute come from the Coronavirus State and Local Fiscal Recovery Funds program, or SLFRF, a $350 billion chunk of the multitrillion-dollar Covid relief package, dubbed the American Rescue Plan, that President Joe Biden signed into law last year.
The funds are intended “to mitigate the fiscal effects stemming from the COVID-19 public health emergency, including by supporting efforts to stop the spread of the virus,” Treasury noted in the letter to Ducey’s Office of Strategic Planning and Budgeting.

But Arizona’s two school programs use the federal money to “impose conditions on participating in or accepting a service that undermine efforts to stop the spread of COVID-19 and discourage compliance with evidence-based solutions for stopping the spread of COVID-19,” the letter said.
The $163 million Education Plus-Up Grant Program, for instance, allows funds be given only to schools that do not enforce mask requirements, Treasury wrote.
The other program in question, totaling $10 million, provides grant money to help parents move their kids out of schools that are deemed to be imposing “unnecessary closures and school mandates.”
That program “is available only to families if the student’s current or prior school requires the use of face coverings” during the school day, Treasury’s letter said.
The latest letter, sent by acting Deputy Chief Compliance Officer Kathleen Victorino of the Treasury Office of Recovery Programs, follows months of back-and-forth between the Biden administration and Arizona.
The Treasury Department in October had asked Arizona to explain how it would fix the issues identified in the two school programs.
The state responded a month later, detailing its rationale for the anti-mask conditions but failing to “describe any plans for remediation of the issues identified,” Victorino wrote.
The latest fight over Covid safety rules comes as the highly transmissible omicron variant fuels an unprecedented surge in cases. The U.S. Supreme Court on Thursday blocked enforcement of the Biden administration’s rule for employees in large companies to either get vaccinated or receive weekly testing, but the high court left intact a vaccine mandate for health-care workers.
But the disputes precede omicron. Last year, Arizona’s Republican-controlled legislature tried to pass provisions banning mask mandates and other Covid safety measures. In November, the state Supreme Court ruled that those measures were passed illegally.
— CNBC’s Tom Franck contributed to this report.

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General Electric has suspended implementation of Covid vaccine and testing rules for its employees, which numbered 174,000 at the end of 2020.
The move followed the Supreme Court ruling that blocked President Joe Biden’s mandate.
Biden called on businesses to voluntarily implement the rules.

An employee helps install a traction motor onto the truck of a General Electric Evolution Series Tier 4 diesel locomotive at the GE Manufacturing Solutions facility in Fort Worth, Texas.
Luke Sharrett | Bloomberg | Getty Images

General Electric suspended its Covid vaccine and testing requirement on Friday after the Supreme Court blocked the Biden administration’s mandate, a company spokesperson told CNBC.
GE, which had174,000 employees at the end of 2020, has encouraged its employees to get vaccinated, the spokesperson said.

The Supreme Court’s conservative majority, in a 6-3 ruling, called the Biden administration’s requirements a “blunt instrument” that “draws no distinctions based on industry or risk of exposure to Covid-19.”
President Joe Biden, in a statement after the court’s decision, called on companies to voluntarily implement the vaccine and testing rules.
“The court has ruled that my administration cannot use the authority granted to it by Congress to require this measure,” Biden said. “But that does not stop me from using my voice as president to advocate for employers to do the right thing to protect Americans’ health and economy.”
Labor Secretary Marty Walsh has vowed to use the Occupational Safety and Health Administration’s existing authority to hold businesses accountable for protecting workers against Covid.

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“We urge all employers to require workers to get vaccinated or tested weekly to most effectively fight this deadly virus in the workplace,” Walsh said in a statement Thursday. “Employers are responsible for the safety of their workers on the job.”

The American Medical Association, one of the largest doctors’ groups in the U.S., said in dissent that the Supreme Court had blocked “one of the most effective tools in the fight against further transmission and death from this aggressive virus.”
“Workplace transmission has been a major factor in the spread of Covid-19,” AMA President Dr. Gerald Harmon said. “Now more than ever, workers in all settings across the country need commonsense, evidence-based protections against Covid-19 infection, hospitalization, and death.”
Harmon urged businesses to safeguard their workers against the disease. A number of large companies – including Citigroup, Nike and Columbia Sportswear – have said they would begin firing unvaccinated workers.
The Covid omicron variant is driving new infections to unprecedented levels. The U.S. is reporting an average of more than 786,000 new infections every day, up 29% over the prior last week, according to a CNBC analysis of data from Johns Hopkins University.
In addition, hospitalizations are at a pandemic high based on federal data that goes back to the summer of 2020. About 151,000 Americans were in hospitals with Covid as of Friday, a seven-day average of Health and Human Services data shows, up 23% from a week-earlier period. That figure includes both patients that were admitted to a hospital due to Covid and those who tested positive after admission.
— CNBC’s Nate Rattner contributed to this report

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The National Retail Federation will press ahead with the industry’s biggest annual trade show this weekend in New York City, even as attendance dwindles and some speakers drop out.
Another major industry gathering, the J.P. Morgan Healthcare Conference, switched to a virtual event and signaled caution as Covid cases rise across the country.
The Berlin International Film Festival said it will throw an in-person event in February.
The decisions are symbolic as the retail and entertainment industries try to nudge consumers toward more normalcy, despite a omicron-fueled record surge in Covid cases

Visitors enter the venue at The NRF 2020 Vision: Retail’s Big Show, held in New York, the United States, Jan. 12, 2020.
Wang Ying | Xinhua News Agency | Getty Images

“The Big Show will go on,” said National Retail Federation President Matt Shay on Monday.
And on Friday, even as more speakers and attendees pull out of the conference, that remains the trade group’s plan.

The National Retail Federation will kick off its annual gathering in New York City this weekend. It’s one of a slew of annual conferences and trade shows that kick off a new year each January. But with omicron pushing Covid cases to new heights, conference planning has become complex and prompted industries to make tough calls.
The J.P. Morgan Healthcare Conference — which draws medical professionals, major pharmaceutical companies and health-care start-ups — decided to hold its annual event virtually this week. CES 2022, a trade show organized by the Consumer Technology Association, went ahead with its event the prior week, albeit with smaller crowds. And the movie industry announced it will press ahead with plans to throw the Berlin International Film Festival in person in February, while the Sundance Film Festival, planned for later this month, has gone virtual.
The decisions, in some cases, are symbolic and reflect the businesses’ challenges as companies try to nudge consumers toward more normalcy. Grocers and drugstores have kept their doors open and stores staffed during previous waves of the pandemic. Movie theaters are trying to woo back audiences, as some people have become skittish about sitting next to strangers.
“As we move beyond the pandemic to endemic, this year’s convention is a step forward in this new environment,” NRF said in a statement on Friday. “Undoubtedly it will be a bit messy, but it is a step forward.”
There will be fewer opportunities for people to take off their masks, drink and socialize like conferences in the past. The NRF recently decided to postpone two of its major events — an awards gala and more intimate dinner hosted by the NRF’s Foundation — until mid-April. The foundation sent personal notes to CEOs and awards recipients on Jan. 6, announcing the change. It also indefinitely postponed a student program that coincides with the Big Show and typically attracts about 800 college-aged attendees for education and networking.

NRF has announced stepped-up safety measures. Along with requiring masks and proof of vaccination, it plans to hand out N95 masks and at-home Covid test kits.
Similarly, the Berlin film festival said its event would have tighter restrictions and no parties.

Dwindling attendance

The U.S. has reported nearly 800,000 cases per day on average over the past week, according to data compiled by Johns Hopkins University, more than three times the level seen during last winter’s previous record. While cases of omicron may be milder than previous strains of the virus, hospitalizations are also rising, particularly over the past two weeks.
With this backdrop, the expected attendance at NRF’s Big Show has dwindled. NRF’s Shay said in a post on LinkedIn on Monday that the show will go on. He said that the conference was expected to draw as many as 20,000 attendees and 750 exhibitors. About 40,000 people attended the Big Show in 2019.

Two days later, though, an NRF spokesperson said there were 15,000 confirmed attendees.
Nearly every passing day has brought changes to the conference’s schedule. Jessica Alba’s Honest Company confirmed last Friday that the company’s founder and CEO had dropped out of the lineup. Saks Chief Executive Marc Metrick backed out earlier this week. Both were featured speakers for the main stage at the event.
Target said on Friday that CEO Brian Cornell still plans to attend the event. He is scheduled to deliver a keynote and receive the trade group’s “Visionary” award. However, the company said it cut travel for other employees who planned to go and was looking into ways to participate virtually.
A session with Tapestry, the parent company of Coach and Kate Spade, is no longer listed on the three-day agenda. Meantime, CEOs from Old Navy, Stitch Fix, Lowe’s and Nordstrom have opted to not travel to the conference and instead will hold their sessions virtually.
Executives from Macy’s, WW International (formerly Weight Watchers International), Victoria’s Secret, Authentic Brands Group and Coresight Research are expected to attend in person.
So far, the NRF has not offered a virtual option for attendees or for any speakers who are not set to be on the main stage at the Javits Center.

We feel this is now an appropriate time to get back together in some fashion. This is a time to start normalizing.

Stephanie Martz
General counsel, National Retail Federation

In a tweet on Jan. 6, co-founder of Future Commerce Phillip Jackson said “NRF’s The Big Show is gonna be more like The No Show.”
Since omicron is highly contagious, there is a fear is that an event that draws thousands of attendees could become a super spreader event. Nearly 70 attendees, including some Samsung executives, have tested positive for coronavirus after CES was held last week in Las Vegas, according to a Reuters report. It is not clear if those attendees contracted Covid while at the tech show or from offsite events, such as dinner at a restaurant.
The site of the NRF’s Big Show, the Javits Center, is already believed to be the source of the first known instance of omicron spreading within the U.S., after clusters of cases were detected among the roughly 53,000 people gathered there for an anime conference in November.

‘Open for business’

The NRF is pressing ahead with the conference as many retail workers who get minimum wage — or close to it — show up to work each day at stores and warehouses. Many of the industry’s top executives and corporate employees, on the other hand, have been able to work from the comfort and safety of home.
“The fact is that it’s really, really important for us to all keep in mind that our frontline retail workers have been working this whole time and we’ve been asking them to come to work and deal with customers,” said Stephanie Martz, the chief administrative officer and general counsel of NRF, in an interview on Jan. 5.
She said vaccines, masks and other safety precautions have changed the game, both for the conference and for business operations in general.
“Individual companies make the decisions they’re going to make on their own and we certainly don’t fault them for it if we have people pull out, but we think as the trade association representing retailers that we should take advantage of the fact that we are in a place to say that we think the economy can and should be open for business,” she said.
“We feel this is now an appropriate time to get back together in some fashion,” Martz added. “This is a time to start normalizing.”
NRF’s Shay echoed the importance of keeping businesses in operation, despite the pandemic.
“We are encouraged by Mayor Eric Adams’ stated desire to keep New York City open,” Shay said in his LinkedIn post. “The overwhelming sentiment from our members, exhibitors, retailers, partners and attendees is that we should go forward with the show. … This year’s show is a step forward, and we believe it’s a necessary and meaningful one.”

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Economic sanctions remain one of the most powerful tools the United States has in its foreign policy arsenal. And as Russian forces continue to amass along the border with Ukraine, officials in the U.S. hope the threat of those sanctions can deter a full-scale invasion.”The thing about sanctions is they’re most effective if you don’t have to use them,” said Olga Oliker, program director, Europe and Central Asia at the International Crisis Group. “They’re most effective if you can credibly threaten something that the other guy doesn’t want enough that they don’t then do whatever it is you’re trying to keep them from doing.”Besides sanctions that target individuals or specific companies, some proposals involve cutting Russia off from the SWIFT system, which would remove Russian institutions from an important global financial network.Another target is the near-completed Nord Stream 2 gas pipeline, which when operational would double the amount of natural gas moved from Russia to Germany through the Baltic Sea and likely reduce the need for other pipelines, such as the Urengoy–Pomary–Uzhhorod pipeline that runs through Ukraine.Republican Sen. Ted Cruz of Texas has proposed a bill that would require automatic sanctions against Nord Stream 2 operators within two weeks of Russia invading Ukraine. The bill failed to pass Thursday, but picked up a handful of Democratic votes in the final tally.Democratic Sens. Robert Menendez, of New Jersey, and Jeanne Shaheen, of New Hampshire, proposed an alternative bill that would “impose crippling sanctions on the Russian banking sector and senior military and government officials if President [Vladimir] Putin escalates hostile action in or against Ukraine.””Ukraine’s army is not the same military that it had when Russia invaded Crimea,” Shaheen said in an interview with CNBC.com. “They have had their weapons systems upgraded — the United States has supported them in that. We’ve had trainers from both NATO and the United States working in the country. So the circumstances are very different than they were when Russia went into Crimea. And we need to do everything possible to make clear to Putin that this is going to be a united response should he take this action.”Watch the video above to find out how U.S. sanctions work, whether the U.S. can persuade allies to cut off Russia from the important SWIFT financial network, and what’s next in the foreign policy standoff between the West and Russia.

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Retail sales declined 1.9% in December, much worse than the forecast for a 0.1% drop.
Weak online sales were responsible for much of the slide along with a fall in spending at bars and restaurants.
Import prices declined on the month, the first decrease since August.

Retail sales fell much more than expected in December as surging prices took a big bite out of spending, the Commerce Department reported Friday.
The advance monthly sales report to close out the year showed a decline of 1.9%, considerably worse than the Dow Jones estimate for just a 0.1% drop.

Excluding autos, sales fell 2.3%, a number that also fell well short of expectations for a 0.3% rise.
In addition to the weak December numbers, the November gain was revised down to 0.2% from the initially reported 0.3% increase.
Considering that the sales numbers are not adjusted for inflation, the data point to a slow ending to what had otherwise been a strong 2021 in which sales rose 16.9% from the pandemic-scarred 2020.

A family of shoppers walk out of Walmart with a full shopping cart on November 26, 2021 in Westminster, Colorado.
Michael Ciaglo | Getty Images

The consumer price index rose 0.5% for the month, bringing the year-over-year gain to 7%, the highest since June 1982. Wholesale price also rose, climbing 9.7% in the 12-month period for the biggest calendar-year rise since data was kept going back to 2010.
Online spending took the biggest hit as a share of overall spending, with nonstore retailers reporting a plunge of 8.7% for the month. Furniture and home furnishing sales declined 5.5% and sporting goods, music and book stores saw a 4.3% drop.

Surging omicron cases exacted damage across the board as consumer activity waned.
Restaurants and bars, which posted a 41.3% annual gain in 2021 to lead all categories, saw a decline of 0.8% for the month. Gas stations were a close second for the year, with a 41% surge in sales, but saw a 0.7% decrease in December as fuel costs moved lower. Gasoline prices fell 0.5% to close out a year when prices at the sump soared 49.6%.
Only two categories saw increases for the month: miscellaneous store retailers, which rose 1.8% and building materials and gardening centers, which posted a 0.9% gain.
A separate Labor Department report Friday showed import prices fell 0.2% for December, against expectations for an increase of 0.2%, the first negative number since August and due in good part to a 6.5% fall in import fuel prices.
That number provided some hope that the inflation surge could be ebbing, though much of the move came from falling petroleum prices..
Federal Reserve officials in recent days have been stressing the importance of heading off inflation, with multiple policymakers saying they expect to start raising interest rates as soon as March. The Biden administration has joined central bank leaders in placing much of the blame for rising prices on pandemic-specific factors such as a huge demand for goods over services and supply-chain issues.
The price surge, though, has come following unprecedented levels of cash injections to the economy from both fiscal and monetary policy.
Correction: Import fuel prices fell 6.5% in December. An earlier version misstated the category.

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RWE said Triton Knoll will produce “sufficient electricity to meet the needs of around 800,000 homes each year.”
Triton Knoll produced its first power in March 2021and its final turbine was installed last September.

One of the turbines at the Triton Knoll offshore wind farm, which is located in waters off England’s east coast.
Ian Greenwood

Turbine commissioning at one of the world’s biggest offshore wind farms is complete and full operations are slated to begin in the first quarter of 2022, according to German power firm RWE.
The 857 megawatt Triton Knoll Offshore Wind Farm is situated in waters off England’s east coast and uses 90 wind turbines from Danish firm Vestas.

In a statement Thursday RWE said Triton Knoll would produce “sufficient electricity to meet the needs of around 800,000 homes each year.” Investment in the project amounts to approximately £2 billion (around $2.74 billion).
RWE has a 59% stake in Triton Knoll. Its other owners are Kansai Electric Power and J-Power, who have stakes of 16% and 25%, respectively. RWE is responsible for the project’s construction, operation and maintenance.
Triton Knoll produced its first power in March 2021and its final turbine was installed last September.

Read more about clean energy from CNBC Pro

The North Sea, where Triton Knoll is located, is home to a number of large-scale offshore wind facilities. These include the 1.2 gigawatt Hornsea One development, which is located in waters off Yorkshire and uses 174 turbines.
Looking ahead, major projects planned for the North Sea include the Dogger Bank Wind Farm, which will have a total capacity of 3.6 GW once completed. The development of the project is taking place in three phases.

U.K. authorities want 40 GW of offshore wind capacity by 2030. The European Union, which the U.K. left in January 2020, is targeting 300 GW of offshore wind by the middle of this century.
Across the Atlantic, the U.S. has some way to go to catch up with Europe. America’s first offshore wind facility, the 30 megawatt Block Island Wind Farm in waters off Rhode Island, only started commercial operations in late 2016.
Change looks to be coming, however. In November ground was broken on a project dubbed the United States’ “first commercial scale offshore wind farm.” More

United had stopped offering employees vaccines at airports late last summer.
More than 96% of the company’s roughly 67,000 U.S. employees are vaccinated, following a companywide mandate.

United Airlines ramp services worker John Dalessandro receives a COVID-19 vaccine at United’s onsite clinic at O’Hare International Airport on March 09, 2021 in Chicago, Illinois.
Scott Olson | Getty Images

United Airlines started offering staff vaccines again at some of its busiest airports this week as the omicron variant continues to spread throughout the U.S. and within its own employee ranks.
The Chicago-based airline is administering Covid-19 booster shots at several of its busiest hubs: Newark Liberty International Airport, George Bush Intercontinental/Houston Airport, Chicago O’Hare International Airport and Won Pat International Airport in Guam, spokeswoman Leslie Scott said.

The airline last August established the strictest vaccine requirements of any U.S. carrier, telling staff to get immunized unless they get a religious or medical exemption, or face termination. More than 96% of United’s roughly 67,000 U.S. employees have been vaccinated.
The company stopped its airport vaccine program late last summer.
“This is another step we are taking to educate our employees on the importance of boosters and make them easily accessible,” said Scott. The company isn’t currently changing its definition of fully vaccinated to include boosters, she said.
United’s revival of the airport vaccination program comes as the rapid spread of omicron sidelined airline workers, contributing to 20,000 flight cancellations between Christmas Eve and the first week of January.
United’s CEO, Scott Kirby, on Monday said that 3,000 of the airline’s roughly 67,000 U.S. employees were out from Covid infections and that a third of its staff on one recent day at its hub at Newark Liberty International Airport in New Jersey had called out sick from the virus. He said the company averaged one Covid-related death per week before the vaccine mandate and that no vaccinated United employees have died from causes tied to the virus in the last eight weeks.

Delta Air Lines CEO Ed Bastian on Thursday said that about 1 in 10 of its employees had tested positive for Covid in the last four weeks but that no serious health issues have been reported.
Delta offers staff as well as employees’ friends and families vaccines at its flight museum near its Atlanta headquarters, spokesman Morgan Durrant said.
Correction: Morgan Durrant is a spokesman for Delta Air Lines; Leslie Scott is a spokeswoman for United Airlines. An earlier version of this article misstated that information.

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