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More Than 5.2 Million U.S. Workers Filed for Unemployment: Live Updates More Than 5.2 Million U.S. Workers Filed for Unemployment: Live Updates
(32 minutes later)
The Small Business Administration has run out of money for its Paycheck Protection Program, officials said on Thursday, leaving millions of businesses unable to apply for emergency loans while Congress struggles to reach a deal to replenish the funds.
Congress initially allocated $349 billion for the program, which was intended to provide loans to businesses with 500 or fewer employees. The money has gone quickly, with more than 1.4 million loans already approved as of Wednesday evening.
Treasury Secretary Steven Mnuchin and Jovita Carranza, the administrator of the Small Business Administration, warned on Wednesday night that “by law, the SBA will not be able to issue new loan approvals once the programs experience a lapse in appropriations.”
Mr. Mnuchin is expected to resume negotiations with lawmakers about adding another $250 billion to the fund on Thursday.
The loans have been sought after as small businesses struggle with virus-induced quarantines and closures, which have quickly depleted cash flows as businesses remain closed and customers stay home.
The program underwrites bank loans for small businesses that will never need to be repaid if owners use most of the money to keep paying employees for two and a half months. Economists and business lobbyists warned when the bill was being debated that the money was nowhere close to the $1 trillion or more that companies would need.
The coronavirus pandemic’s devastation became more evident Thursday with more than 5.2 million workers added to the tally of the unemployed.The coronavirus pandemic’s devastation became more evident Thursday with more than 5.2 million workers added to the tally of the unemployed.
The latest figure from the Labor Department, reflecting last week’s initial unemployment claims, brings the four-week total to about 22 million, roughly the net number of jobs created in a nine-and-a-half-year stretch that began after the last recession and ended with the pandemic’s arrival.The latest figure from the Labor Department, reflecting last week’s initial unemployment claims, brings the four-week total to about 22 million, roughly the net number of jobs created in a nine-and-a-half-year stretch that began after the last recession and ended with the pandemic’s arrival.
It underscores how the downdraft has spread to every corner of the economy: hotels and restaurants, mass retailers, manufacturers and white-collar strongholds like law firms.It underscores how the downdraft has spread to every corner of the economy: hotels and restaurants, mass retailers, manufacturers and white-collar strongholds like law firms.
“There’s nowhere to hide,” said Diane Swonk, chief economist at Grant Thornton in Chicago. “This is the deepest, fastest, most broad-based recession we’ve ever seen.”“There’s nowhere to hide,” said Diane Swonk, chief economist at Grant Thornton in Chicago. “This is the deepest, fastest, most broad-based recession we’ve ever seen.”
Some of the new jobless claims represent freshly laid-off workers; others are from people who had been trying for a week or more to file. “We’re still playing catch-up on multiple fronts,” Ms. Swonk said.Some of the new jobless claims represent freshly laid-off workers; others are from people who had been trying for a week or more to file. “We’re still playing catch-up on multiple fronts,” Ms. Swonk said.
Each day seems to bring unwelcome milestones. On Wednesday, the Commerce Department reported the steepest monthly drop in retail sales since record keeping began nearly 30 years ago, and the Federal Reserve said industrial production had recorded its biggest decline since 1946.Each day seems to bring unwelcome milestones. On Wednesday, the Commerce Department reported the steepest monthly drop in retail sales since record keeping began nearly 30 years ago, and the Federal Reserve said industrial production had recorded its biggest decline since 1946.
The mounting unemployment numbers seem certain to fuel the debate over how long to impose stay-at-home orders and restrictions on business activity. President Trump has said some measures should be relaxed soon because of the impact on workers. “There has to be a balance,” he said at a press briefing Wednesday evening. “We have to get back to work.”The mounting unemployment numbers seem certain to fuel the debate over how long to impose stay-at-home orders and restrictions on business activity. President Trump has said some measures should be relaxed soon because of the impact on workers. “There has to be a balance,” he said at a press briefing Wednesday evening. “We have to get back to work.”
Facebook said Thursday that it would start showing messages to people who have liked, reacted or commented on misinformation about Covid-19 that the social network had removed. The messages would also recommend credible information from the World Health Organization, the company said.Facebook said Thursday that it would start showing messages to people who have liked, reacted or commented on misinformation about Covid-19 that the social network had removed. The messages would also recommend credible information from the World Health Organization, the company said.
“As this pandemic evolves, we’ll continue focusing on the most effective ways to keep misinformation and dangerous hoaxes about Covid-19 off our apps and ensure people have credible information from health experts to stay safe and informed,” Guy Rosen, Facebook’s vice president of integrity, said in a blog post.“As this pandemic evolves, we’ll continue focusing on the most effective ways to keep misinformation and dangerous hoaxes about Covid-19 off our apps and ensure people have credible information from health experts to stay safe and informed,” Guy Rosen, Facebook’s vice president of integrity, said in a blog post.
As coronavirus has spread around the world, killing hundreds of thousands of people, so too has online misinformation about it, despite aggressive efforts by social media companies to curb its dissemination. As part of its announcement on Thursday, Facebook said it had removed hundreds of thousands of posts from the social network that “could lead to imminent physical harm,” such as harmful claims that drinking bleach cures the virus and that physical distancing measures are ineffective against its widespread transmission.As coronavirus has spread around the world, killing hundreds of thousands of people, so too has online misinformation about it, despite aggressive efforts by social media companies to curb its dissemination. As part of its announcement on Thursday, Facebook said it had removed hundreds of thousands of posts from the social network that “could lead to imminent physical harm,” such as harmful claims that drinking bleach cures the virus and that physical distancing measures are ineffective against its widespread transmission.
Still, conspiracy theories about the coronavirus have abounded on the social network. In March, the company said, it also reduced the reach of about 40 million false posts and applied warning labels showing more context based on thousands of articles by its independent fact-checking partners.Still, conspiracy theories about the coronavirus have abounded on the social network. In March, the company said, it also reduced the reach of about 40 million false posts and applied warning labels showing more context based on thousands of articles by its independent fact-checking partners.
Who would have thought that a crisis that began with mortgage defaults in American suburbs in 2007 would lead to a fiscal crisis in Greece in 2010? Or that a stock market crash in New York in 1929 would contribute to the rise of fascists in Europe in the 1930s?Who would have thought that a crisis that began with mortgage defaults in American suburbs in 2007 would lead to a fiscal crisis in Greece in 2010? Or that a stock market crash in New York in 1929 would contribute to the rise of fascists in Europe in the 1930s?
In the years ahead, we will learn what happens when the infinitely complicated web of interconnections that makes up the world economy is torn apart. And it opens the possibility of a global economy completely different from the one that has prevailed in recent decades.In the years ahead, we will learn what happens when the infinitely complicated web of interconnections that makes up the world economy is torn apart. And it opens the possibility of a global economy completely different from the one that has prevailed in recent decades.
“This is a period of radical uncertainty, an order of magnitude greater than anything we’re used to,” said Adam Tooze, a historian at Columbia University and author of “Crashed,” a study of the extensive global ripple effects of the 2008 financial crisis.“This is a period of radical uncertainty, an order of magnitude greater than anything we’re used to,” said Adam Tooze, a historian at Columbia University and author of “Crashed,” a study of the extensive global ripple effects of the 2008 financial crisis.
Crises have a way of bringing to the fore issues that are easy to ignore in good times.Crises have a way of bringing to the fore issues that are easy to ignore in good times.
One obvious candidate is globalization, in which companies can move production wherever it’s most efficient, people can hop on a plane and go nearly anywhere, and money can flow to wherever it will be put to its highest use. The idea of a world economy with the United States at its center was already falling apart, between the rise of China and the United States’ own turn toward nationalism.One obvious candidate is globalization, in which companies can move production wherever it’s most efficient, people can hop on a plane and go nearly anywhere, and money can flow to wherever it will be put to its highest use. The idea of a world economy with the United States at its center was already falling apart, between the rise of China and the United States’ own turn toward nationalism.
There are signs that the coronavirus crisis is exaggerating, and possibly cementing, those changes.There are signs that the coronavirus crisis is exaggerating, and possibly cementing, those changes.
Early gains in the stock market gave way to losses as investors wrestled with the latest figures showing the economic damage from the coronavirus outbreak. Early gains in the stock market faded as investors wrestled with the latest figures showing the economic damage from the coronavirus outbreak.
Shares of banks continued to slide, as Morgan Stanley added to a string of earnings reports from the sector that show profits tumbling and lenders preparing for damage to come.Shares of banks continued to slide, as Morgan Stanley added to a string of earnings reports from the sector that show profits tumbling and lenders preparing for damage to come.
Energy stocks were also sharply lower, as were shares of major airlines after leaders of United Airlines issued a dire note to the carrier’s 100,000 employees on Wednesday, warning that staffing cuts may be coming and demand for air travel is likely to remain subdued into next year.Energy stocks were also sharply lower, as were shares of major airlines after leaders of United Airlines issued a dire note to the carrier’s 100,000 employees on Wednesday, warning that staffing cuts may be coming and demand for air travel is likely to remain subdued into next year.
Investors also faced another spate of bad economic news on Thursday, with weekly unemployment claims data showing another mass shedding of jobs.Investors also faced another spate of bad economic news on Thursday, with weekly unemployment claims data showing another mass shedding of jobs.
The S&P 500 fell about a half a percent, after having dropped more than 2 percent on Wednesday. Stocks in Europe were slightly higher, after also having given up their early gains, while shares in Asia fell on Thursday. The S&P 500 drifted between gains and losses, after having dropped more than 2 percent on Wednesday. Stocks in Europe were slightly higher, after also having given up their early gains, while shares in Asia fell on Thursday.
Though still far from the record reached on Feb. 19, stocks in the United States had been steadily climbing in recent weeks as investors have begun to focus on the prospect of an eventual rebound from the economic collapse set off by the pandemic.Though still far from the record reached on Feb. 19, stocks in the United States had been steadily climbing in recent weeks as investors have begun to focus on the prospect of an eventual rebound from the economic collapse set off by the pandemic.
Treasury Secretary Steven Mnuchin voiced his opposition on Thursday to proposals that the International Monetary Fund create new reserve assets to bolster its arsenal of tools for helping economies stricken by the coronavirus pandemic.Treasury Secretary Steven Mnuchin voiced his opposition on Thursday to proposals that the International Monetary Fund create new reserve assets to bolster its arsenal of tools for helping economies stricken by the coronavirus pandemic.
The United States has been blocking proposals by leaders in Europe and Africa that call for issuance of new “Special Drawing Rights,” which would allow the fund to inject liquidity into the global economy, which it expects to shrink by 3 percent this year. Special Drawing Rights, or SDRs, are essentially the fund’s way of printing money by boosting the foreign exchange reserves of its 189 member countries.The United States has been blocking proposals by leaders in Europe and Africa that call for issuance of new “Special Drawing Rights,” which would allow the fund to inject liquidity into the global economy, which it expects to shrink by 3 percent this year. Special Drawing Rights, or SDRs, are essentially the fund’s way of printing money by boosting the foreign exchange reserves of its 189 member countries.
“In our view, an SDR allocation is not an effective tool to respond to urgent needs,” Mr. Mnuchin said in a statement.“In our view, an SDR allocation is not an effective tool to respond to urgent needs,” Mr. Mnuchin said in a statement.
He said he opposed the idea because much of the allocation would go to the richest countries, which likely would not utilize them, while poor countries would receive far less. SDRs are distributed proportionally according to the shares countries have in the I.M.F.He said he opposed the idea because much of the allocation would go to the richest countries, which likely would not utilize them, while poor countries would receive far less. SDRs are distributed proportionally according to the shares countries have in the I.M.F.
The Treasury secretary said he preferred a more “targeted approach” and that the United States was considering contributions to the fund’s trusts that provide grants and loans to the poorest countries.The Treasury secretary said he preferred a more “targeted approach” and that the United States was considering contributions to the fund’s trusts that provide grants and loans to the poorest countries.
The debate over SDRs has been one of the points of contention at the “virtual” spring meetings hosted by the I.M.F. and World Bank this year. France had been spearheading the proposal.The debate over SDRs has been one of the points of contention at the “virtual” spring meetings hosted by the I.M.F. and World Bank this year. France had been spearheading the proposal.
European carmakers are beginning to gradually reopen factories in what will be an important test of whether it is possible to get the economy going again without endangering the health of employees.European carmakers are beginning to gradually reopen factories in what will be an important test of whether it is possible to get the economy going again without endangering the health of employees.
Volkswagen, which has already restarted limited production at some parts factories, said Wednesday that it would reopen car assembly plants in Zwickau, Germany, and Bratislava, Slovakia, on Monday. Other VW factories around the world will follow later in April and in May.Volkswagen, which has already restarted limited production at some parts factories, said Wednesday that it would reopen car assembly plants in Zwickau, Germany, and Bratislava, Slovakia, on Monday. Other VW factories around the world will follow later in April and in May.
Daimler, the maker of Mercedes-Benz cars and trucks, said that next week it would reopen three German factories that manufacture vital parts, such as a system made in Berlin that controls the valves of internal combustion engines. The plants will initially operate for one shift a day as Daimler gradually restarts operations in Germany, the company said.Daimler, the maker of Mercedes-Benz cars and trucks, said that next week it would reopen three German factories that manufacture vital parts, such as a system made in Berlin that controls the valves of internal combustion engines. The plants will initially operate for one shift a day as Daimler gradually restarts operations in Germany, the company said.
Volvo Cars said it will reopen its factories and offices in Sweden on Monday. Sweden has taken a more relaxed approach to the virus, allowing grade schools and restaurants to remain open.Volvo Cars said it will reopen its factories and offices in Sweden on Monday. Sweden has taken a more relaxed approach to the virus, allowing grade schools and restaurants to remain open.
More than 1 million Europeans are either working reduced hours or unemployed because of car and parts factory shutdowns, so restarting the plants is crucial. But the factories will also be laboratories of whether the risk of infection can be controlled by use of face masks, plastic barriers, and other measures.More than 1 million Europeans are either working reduced hours or unemployed because of car and parts factory shutdowns, so restarting the plants is crucial. But the factories will also be laboratories of whether the risk of infection can be controlled by use of face masks, plastic barriers, and other measures.
For more than four decades, China has never acknowledged that its economy actually shrank, even during major economic crises. But that may change on Friday, when the country announces gross domestic product for the January-to-March quarter.For more than four decades, China has never acknowledged that its economy actually shrank, even during major economic crises. But that may change on Friday, when the country announces gross domestic product for the January-to-March quarter.
China’s National Bureau of Statistics already confirmed last month that domestic industrial production, retail sales and investment all suffered record, double-digit drops in the first two months of this year compared with the same period of 2019. That has prompted most, though not all, economists to guess that overall economic performance for the first quarter of this year will show a drop from a year earlier.China’s National Bureau of Statistics already confirmed last month that domestic industrial production, retail sales and investment all suffered record, double-digit drops in the first two months of this year compared with the same period of 2019. That has prompted most, though not all, economists to guess that overall economic performance for the first quarter of this year will show a drop from a year earlier.
The question is how big a drop it will be.The question is how big a drop it will be.
One survey of 18 Chinese and foreign institutions by Caixin, a Chinese news organization, found that they were forecasting that the economy was anywhere from flat to down 11.5 percent in the first quarter. The average forecast was for a drop of 6.6 percent.One survey of 18 Chinese and foreign institutions by Caixin, a Chinese news organization, found that they were forecasting that the economy was anywhere from flat to down 11.5 percent in the first quarter. The average forecast was for a drop of 6.6 percent.
A broader survey by Reuters of 57 analysts found an even wider range of predictions — anywhere from a nose-dive of 28.9 percent to a gain of 4 percent. But the average in the Reuters survey, a loss of 6.5 percent, was practically identical to Caixin’s.A broader survey by Reuters of 57 analysts found an even wider range of predictions — anywhere from a nose-dive of 28.9 percent to a gain of 4 percent. But the average in the Reuters survey, a loss of 6.5 percent, was practically identical to Caixin’s.
Foreign banks, which come under only slightly less political pressure than Chinese institutions to issue sunny forecasts, have tended to be at the bearish end of the range.Foreign banks, which come under only slightly less political pressure than Chinese institutions to issue sunny forecasts, have tended to be at the bearish end of the range.
The leaders of United Airlines issued a dire note to the carrier’s 100,000 employees on Wednesday, warning that staffing cuts may be coming and demand for air travel is likely to remain subdued into next year.The leaders of United Airlines issued a dire note to the carrier’s 100,000 employees on Wednesday, warning that staffing cuts may be coming and demand for air travel is likely to remain subdued into next year.
“The challenge that lies ahead for United is bigger than any we have faced in our proud 94-year history,” the airline’s chief executive, Oscar Munoz, and president, J. Scott Kirby, wrote in the letter, which was posted on the company’s website.“The challenge that lies ahead for United is bigger than any we have faced in our proud 94-year history,” the airline’s chief executive, Oscar Munoz, and president, J. Scott Kirby, wrote in the letter, which was posted on the company’s website.
Traffic in the first two weeks of April was down 97 percent from last year and the airline now expects to fly fewer passengers in all of May than it flew in a single day during the same month last year, the executives wrote. And that decline is expected to last even as health concerns linger and travel restrictions are lifted at different times around the world.Traffic in the first two weeks of April was down 97 percent from last year and the airline now expects to fly fewer passengers in all of May than it flew in a single day during the same month last year, the executives wrote. And that decline is expected to last even as health concerns linger and travel restrictions are lifted at different times around the world.
The airline said earlier on Wednesday that it expected to receive $5 billion of federal funding intended to pay airline workers through September, but that stimulus is unlikely to prevent cuts beyond that, the executives warned on Thursday.The airline said earlier on Wednesday that it expected to receive $5 billion of federal funding intended to pay airline workers through September, but that stimulus is unlikely to prevent cuts beyond that, the executives warned on Thursday.
“The challenging economic outlook means we have some tough decisions ahead as we plan for our airline, and our overall work force, to be smaller than it is today, starting as early as October 1,” they said.“The challenging economic outlook means we have some tough decisions ahead as we plan for our airline, and our overall work force, to be smaller than it is today, starting as early as October 1,” they said.
The leaders struck a markedly different tone from the chief executive of American Airlines, Doug Parker, who said in a CNBC interview earlier in the day that he saw some “indications that the world is ready to start traveling again.”The leaders struck a markedly different tone from the chief executive of American Airlines, Doug Parker, who said in a CNBC interview earlier in the day that he saw some “indications that the world is ready to start traveling again.”
A computer, communications tools, entertainment and a good internet connection are all the technology that most of us need to work and stay sane while stuck inside our homes, says our Tech Fix columnist, Brian X. Chen.
That means we don’t have to spend a lot of money on the latest devices, although investing in a new router can significantly boost the speed of your internet connection.
This short list can guide our priorities in tech consumption even after we come out of this uncertain period. It also means that we don’t have to spend much money to maximize our happiness with tech.
Tech you don’t need: That smart speaker from Amazon or Google or that phone with the foldable screen. If it doesn’t help you do work, stay connected and feel entertained, you can find other ways to spend your money.
Amazon’s founder, Jeff Bezos, said the company is developing its own coronavirus testing capabilities, including building a lab, and is preparing to start testing a small number of workers soon. In an annual letter to shareholders, Mr. Bezos also advocated for “regular testing on a global scale, across all industries,” as a way to reopen the economy.Amazon’s founder, Jeff Bezos, said the company is developing its own coronavirus testing capabilities, including building a lab, and is preparing to start testing a small number of workers soon. In an annual letter to shareholders, Mr. Bezos also advocated for “regular testing on a global scale, across all industries,” as a way to reopen the economy.
Morgan Stanley, the smallest of the major Wall Street banks, reported a 30 percent downswing in earnings for the first quarter. Driven by declines in its money management and investment businesses as well as higher costs related to both increased loss cushions and the quarter’s strong trading volumes, Morgan Stanley’s profits fell to $1.7 billion for the quarter, with overall revenues falling 8 percent, to $9.5 billion. Morgan Stanley, the smallest of the major Wall Street banks, reported a 30 percent downswing in earnings for the first quarter. Driven by declines in its money management and investment businesses as well as higher costs related to both increased loss cushions and the quarter’s strong trading volumes, Morgan Stanley’s profits fell to $1.7 billion for the quarter, with overall revenues falling 8 percent, to $9.5 billion.
Some fast-food chains in Britain have begun to slowly reopen after shutting doors in a nationwide lockdown in March. Pret a Manger said it had opened 10 locations near London hospitals in response to requests from hospital staff. KFC reopened 11 restaurants across the country for delivery only and with a limited menu. Burger King plans to reopen four restaurants for delivery only.Some fast-food chains in Britain have begun to slowly reopen after shutting doors in a nationwide lockdown in March. Pret a Manger said it had opened 10 locations near London hospitals in response to requests from hospital staff. KFC reopened 11 restaurants across the country for delivery only and with a limited menu. Burger King plans to reopen four restaurants for delivery only.
Gov. Gavin Newsom of California signed an executive order Wednesday directing the state’s unemployment agency to pay benefits to workers like drivers for Uber and Lyft through a federal assistance program for the self-employed. He said the state would also extend aid to undocumented workers, many of whom have been unable to get federal relief during the pandemic despite paying local and state taxes.Gov. Gavin Newsom of California signed an executive order Wednesday directing the state’s unemployment agency to pay benefits to workers like drivers for Uber and Lyft through a federal assistance program for the self-employed. He said the state would also extend aid to undocumented workers, many of whom have been unable to get federal relief during the pandemic despite paying local and state taxes.
The Paycheck Protection Program, a federal program to help small businesses weather the pandemic, is in danger of running dry amid a disagreement between congressional leaders and the White House over how to replenish it.
A Smithfield Foods pork plant in South Dakota has at least 640 coronavirus cases and is now the biggest new, single-source Covid-19 hot spot in America.
Reporting was contributed by Alexandra Stevenson, Davey Alba, Neil Irwin, Nelson D. Schwartz, Liz Alderman, Alan Rappeport, Kate Kelly, Keith Bradsher, Niraj Chokshi, Caitlin Dickerson, Miriam Jordan, Jim Tankersley, Emily Cochrane and Emily Flitter Reed Abelson, Sapna Maheshwari, Ben Casselman, Noam Scheiber, Geneva Abdul, Mohammed Hadi, Carlos Tejada and Mike Ives.Reporting was contributed by Alexandra Stevenson, Davey Alba, Neil Irwin, Nelson D. Schwartz, Liz Alderman, Alan Rappeport, Kate Kelly, Keith Bradsher, Niraj Chokshi, Caitlin Dickerson, Miriam Jordan, Jim Tankersley, Emily Cochrane and Emily Flitter Reed Abelson, Sapna Maheshwari, Ben Casselman, Noam Scheiber, Geneva Abdul, Mohammed Hadi, Carlos Tejada and Mike Ives.