1.5 million unemployment claims were made by the state in the latest weekly count.
Businesses reopen, but layoffs don’t stop.
Another 1.5 million people claimed state unemployment benefits last week, the Labor Department said on Thursday.
It was the 13th week in a row that state deposits exceeded one million. Until the coronavirus crisis, the highest number of new requests in a single week was 695,000 in 1982.
Applications for unemployment assistance, a federal program for the self-employed, independent contractors and others not eligible for standard benefits, added 760,000 to the total.
“This is a lasting hemorrhage of jobs, unlike anything we have seen,” said Heidi Shierholz, director of policies at the Economic Policy Institute, a progressive think tank.
Economists said the recent layoffs, although more modest than the wave of March and early April, suggested that the crisis had hit the economy more deeply.
Hilton Worldwide, the hotel operator, said this week that it would cut 2,100 jobs worldwide and extend the job cuts and reductions in hours and wages for 90 days. AT&T said it plans to cut 3,400 technician and office jobs across the country and permanently close more than 250 stores, one union said. The gym chain 24 hour fitness said it is filing for bankruptcy protection and will permanently shut down more than 100 sites.
Without income for months, small businesses must find ways to pay for the new sanitary diagrams, thermometers, plexiglass, masks and other items needed to open, without knowing whether customers will return.
“None of the contingency plans included specific funding for security upgrades, the purchase of security equipment, or even to help businesses master the P.P.E. for employees and customers, ”said Amanda Ballantyne, executive director of the Main Street Alliance, a small business advocacy group.
Some companies take a slow approach. At first, Chris Lynch and Michael Samer didn’t know what to do with their adventure travel business, Everyday California, when they got the green light in late April.
Mr. Lynch and Mr. Samer decided to reopen with sidewalk kayak and surf rentals only, keeping their retail store and tourist activities closed. Then, as they felt more comfortable, they reintroduced visits at 50% with everyone wearing a mask. They also invested in their neglected online store.
The bet paid off: they increased what had been a small number of online merchandise sales by 750% in May, which enabled them to bring in around twenty employees to help with shipping and marketing.
Wall Street faced another volatile trading day on Thursday, with stocks floating between negative and positive territory as investors examined new data on jobless claims and the latest reports on new coronavirus outbreaks.
The S&P 500 was flat mid-morning after starting the day with a drop. European stocks were slightly lower.
Concerns about an increase in the number of new coronavirus cases worldwide have collided with expectations of a rapid economic recovery in recent days and, as a result, stocks have become directional. It is a consolidation that many Wall Street analysts have described as long overdue, after the S&P 500 soared with a series of gains from late March to early June.
But it also reflects growing uncertainty about the future economic situation.
A report released Thursday showed that another 1.5 million American workers had applied for state unemployment benefits last week. All of the jobless claims reported on Thursday do not necessarily reflect further layoffs. Some states are still dealing with backlogs of claims filed earlier in the crisis; in other cases, people who apply for more than one program may be counted twice.
But three months after the start of the crisis, there is no doubt that layoffs remain high. Economists warn that job losses could worsen if government support that helped support the economy is allowed to expire too soon.
Investors were also waiting for the final word on coronavirus infections in the United States, which have moved to states like Arizona, Florida and Oklahoma. Oklahoma recorded 259 new cases on Wednesday, a single-day record for the second day in a row. The number of infections has also increased in Beijing, raising questions about China’s efforts to control the epidemic.
Many people need help they never imagined would be needed. Ron Lieber and Tara Siegel Bernard have created a guide to connect you with information on government benefits, free services and financial strategies to help you get through this crisis.
If you need temporary relief on your credit card or car loan payments, many lenders offer at least help. Start with your lenders website and read what they have posted. Some have made their policies more miserly since Ron reported the changes in March.
If you are calling for help over the phone, record the conversation if you can or at least get written documentation of any changes accepted by the lender. This Ron column explains how and why. And don’t forget to ask how any change could affect your credit score.
Financial loss is often accompanied by emotional strain, at a time when people are least likely to spend money on self-care. If you are in dire need, the suicide prevention hotline number is 1-800-273-8255. Or send a HELLO to 741741.
The National Alliance on Mental Illness maintains a helpline which can also provide referrals to local resources. His number is 1-800-950-6264.
The Bank of England said on Thursday that it would keep interest rates at 0.1%, but would increase its purchases of British government bonds by £ 100 billion, or about $ 125 billion, as it was trying to support the economy.
Dean Turner, economist at UBS Wealth Management in London, said the decisions were not a surprise. The British government, he said, is issuing large amounts of debt to finance its response to the pandemic, including paying many workers who have been laid off by their companies. The central bank supports these programs by purchasing volumes of similar bonds to keep yields and financing costs low. The bank’s purchases were set to reach the £ 200bn target set for March soon, so it would have to raise the limit.
In a statement, the bank reported signs of recovery after an economic contraction of around 26% in March and April. Payment data showed that consumer spending picked up in May and June. Real estate activity is also increasing, the bank said. The bank said, however, that there was “a higher and more persistent risk of unemployment” in Britain.
China plans to inject credit to revive its economy.
China aims to accelerate the injection of credit into its economy this year as it attempts to revive growth after the coronavirus outbreak.
Speaking at the annual Lujiazui forum in Shanghai on Thursday, Yi Gang, governor of the People’s Bank of China, said authorities saw total social financing – a large measure of credit in the Chinese economy – reach more from 30 trillion renminbi, about 4.24 trillion dollars this year. That would be more than $ 600 billion more than the level in 2019.
While the Chinese economy has rebounded from some measures since the closings in the first half, officials have acknowledged that unemployment remains a big problem.
However, China’s decision is cautious. In the United States, the Federal Reserve said in April that it would release over $ 2 trillion. Authorities in China have been wary of a big loan craze after their response to the 2008 global financial crisis that plunged the economy into debt. Yi said officials would “moderate the total amount and consider withdrawing the political tools quickly in advance.”
In another speech, Guo Shuqing, president of the China Banking and Insurance Regulatory Commission, warned that the Fed would play an unofficial role as the world’s central bank and would put the US dollar and the financial system at risk if it released too much credit .
He warned that a rapid rise in stock markets could be harmful and unsustainable without a real economic recovery. He didn’t specify the market, but global stocks have risen sharply from their previous lows, in part because many governments have put in place big plans to spend money to revive the economy. .
All countries and regions need to consider whether stimulus policies could go too far, said Guo, noting the problems that can be created with too much credit. When the recovery efforts begin, “everyone is happy,” he said. “Coming out can be very painful. “
The government is easing the loan forgiveness requirement that companies must rehire all workers.
Small business owners will not have to repay federal pandemic relief loans, even if they do not rehire all the workers they have laid off, the Trump administration has said, eliminating one rule only many borrowers were afraid of leaving them stuck. a big debt.
The Treasury Department and the Small Business Administration, the program manager, released new loan forgiveness forms on Wednesday with a “safe haven” option. Borrowers can simply argue that they were unable to operate at the “same level of activity” they had before the crisis due to government requirements or security guidelines, including distancing rules social.
These borrowers can have their loan fully canceled if they meet the other program rules, including requiring them to spend at least 60% of their assistance on the wage bill. Change follows a new law that has relaxed many conditions of the paycheck protection program loans.
For some suspicious borrowers, the recent changes have been a major turnaround. George Evageliou, the founder of Urban Homecraft, a custom carpentry business in Brooklyn, had not received his $ 192,000 loan because he feared he would not be able to spend it according to program rules.
But the changes – particularly an extension giving borrowers 24 weeks to spend their aid money – have given him time to safely restart operations and recall his laid off employees. Staff started returning to work last week.
“We feel pretty good in our decision to sit still and let the law change,” said Mr. Evageliou. “We are so grateful for the help this grant will bring us. “
Chanel said it expected a “significant” reduction in sales and profitability for 2020, the latest luxury goods company to warn of the industry blow caused by the coronavirus pandemic.
The legendary French fashion house, owned by secret billionaire brothers Alain and Gerard Wertheimer, is one of the largest and most successful luxury brands in the industry. Chanel’s chief financial officer Philippe Blondiaux said on Thursday that the company had reopened 85% of its global stores and experienced a “double-digit or even three-digit sales recovery” in markets such as China and India.
But he noted, “These are just local expenses, and to put it simply, it will be insufficient when it comes to offsetting travelers’ expenses.” The closure of duty-free shops also hit the business hard. “Even if the airlines resume operations, it will take much of 2020 and 2021 for things to return to normal,” he added.
The disclosures came as they released record annual results for 2019, the third time Chanel has disclosed its results in 110 years of existence. Last year, the company generated $ 12.3 billion in global sales, up 13% on a year-over-year basis, with operating profit reaching nearly $ 4 billion. , up almost 17% compared to 2019.
Despite a change at the head of creation – Virginie Viard succeeded Karl Lagerfeld, longtime fashion director of Chanel who died in February 2019 – Mr. Blondiaux said that there had been double-digit growth in all regions and product lines for the fashion division last year.
A dispute over a $ 3.6 billion trade deal is intensifying.
Taubman Centers, the owner of the shopping center who agreed to be acquired by Simon Property Group for $ 3.6 billion this year, delays Simon Property’s attempt to terminate the deal due to the pandemic.
Taubman, which owns 24 high-end malls, including the Mall at Short Hills in New Jersey, said in a court case Wednesday that Simon Property was “familiar with classic buyer remorse” and that the companies had ” contracted to spread the risk ”. from global pandemics to Simon’s parties, knowing full well that there was a pandemic raging around the world. Taubman said Simon Property has previously negotiated a lower purchase price for the company based on an uncertain retail environment, which is in part fragile due to the coronavirus.
Simon Property, the largest shopping center operator in the United States, said last week that the pandemic “had only a material and disproportionate effect on Taubman” compared to other retail real estate companies, noting its high proportion of indoor malls compared to outdoor centers. He also criticized Taubman for failing to mitigate the impact of the pandemic by “not making essential cuts in operating and capital spending”.
Taubman said Wednesday that Simon Property’s comparison was wrong, noting that its shopping centers were “hardly in the same industry” as the strip centers and that they did not have grocery stores or anchors like Home Depot or Target. The company also said that Simon Property was kept informed of its actions in response to the pandemic.
Catching up: here’s what’s going on.
Kroger, the grocer with approximately 2,800 stores in 35 states, said Thursday that sales increased to $ 42 billion in the quarter ended May 23 from $ 37 billion in the same period the last year. Digital sales jumped 92% during the period marked by pandemic closings. The company, which employs approximately 500,000 people, said it had hired 100,000 workers.
Carnival Corporation, the cruise giant, said on Thursday it lost $ 2.4 billion in the three months ending May 31. refund. Customer demand for 2021 was increasing, she said, with about two-thirds of bookings in a recent six-week period from new customers and one-third from customers using credits. Carnival said he couldn’t say when he would resume normal activities.
The reports and research were provided by Ben Casselman, Tiffany Hsu, Coral Yang, Sapna Maheshwari, Mohammed Hadi, Amy Haimerl, Ron Lieber, Tara Siegel Bernard, Elizabeth Paton, Stacy Cowley, Jeff Sommer, Stanley Reed, Carlos Tejada and Gregory Schmidt.