This article is from the source 'nytimes' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.

You can find the current article at its original source at https://www.nytimes.com/2020/05/08/business/stock-market-coronavirus-jobs-report.html

The article has changed 36 times. There is an RSS feed of changes available.

Version 11 Version 12
U.S. Jobs Report Shows Clearest Data Yet on Economic Toll: Live Updates U.S. Jobs Report Shows Clearest Data Yet on Economic Toll: Live Updates
(32 minutes later)
The Labor Department said Friday that the economy shed more than 20.5 million jobs in April, sending the unemployment rate to 14.7 percent — devastation unseen since the Great Depression.The Labor Department said Friday that the economy shed more than 20.5 million jobs in April, sending the unemployment rate to 14.7 percent — devastation unseen since the Great Depression.
The report underscores the speed and depth of the labor market’s collapse as the coronavirus pandemic took a devastating toll. In February, the unemployment rate was 3.5 percent, a half-century low.The report underscores the speed and depth of the labor market’s collapse as the coronavirus pandemic took a devastating toll. In February, the unemployment rate was 3.5 percent, a half-century low.
The April job losses alone far exceed the 8.7 million in the last recession, when unemployment peaked at 10 percent in October 2009. The only comparable period came when the rate reached about 25 percent in 1933, before the government began publishing official statistics.The April job losses alone far exceed the 8.7 million in the last recession, when unemployment peaked at 10 percent in October 2009. The only comparable period came when the rate reached about 25 percent in 1933, before the government began publishing official statistics.
If anything, the report understates the damage. The government’s definition of unemployment typically requires people to be actively looking for work. And the unemployment rate does not reflect the millions still working who have had their hours slashed or their pay cut.If anything, the report understates the damage. The government’s definition of unemployment typically requires people to be actively looking for work. And the unemployment rate does not reflect the millions still working who have had their hours slashed or their pay cut.
The unemployment rate for black workers jumped to 16.7 percent, nearly three times its level in February — before coronavirus shutdowns took hold — and the highest since early 2010.The unemployment rate for black workers jumped to 16.7 percent, nearly three times its level in February — before coronavirus shutdowns took hold — and the highest since early 2010.
For Hispanic or Latino workers, the unemployment rate jumped to 18.9 percent, up from 6 percent in March and the highest on records going back to the 1970s. That compares with an overall unemployment rate of 14.7 percent for the nation, and a 14.2 percent jobless rate for white workers.For Hispanic or Latino workers, the unemployment rate jumped to 18.9 percent, up from 6 percent in March and the highest on records going back to the 1970s. That compares with an overall unemployment rate of 14.7 percent for the nation, and a 14.2 percent jobless rate for white workers.
The number is striking because employment gains among minorities, and black workers in particular, had been a bright spot in the record-long expansion that preceded the coronavirus lockdown and a major talking point for President Trump.The number is striking because employment gains among minorities, and black workers in particular, had been a bright spot in the record-long expansion that preceded the coronavirus lockdown and a major talking point for President Trump.
Women lost 11.9 million jobs in April, more than the 10.4 million shed by their male counterparts, as coronavirus shuttered service industries where they tend to be heavily employed.Women lost 11.9 million jobs in April, more than the 10.4 million shed by their male counterparts, as coronavirus shuttered service industries where they tend to be heavily employed.
Unemployment for women surged to 16.2 percent from 3.4 percent as recently as February, and men saw their jobless rate jump to 13.5 percent from 3.6 percent that month.Unemployment for women surged to 16.2 percent from 3.4 percent as recently as February, and men saw their jobless rate jump to 13.5 percent from 3.6 percent that month.
The gap is a sharp reversal from what happened in the 2007 recession, when men shed jobs rapidly as industries like construction fell off a cliff. But the pandemic is heavily hitting service sector employment.The gap is a sharp reversal from what happened in the 2007 recession, when men shed jobs rapidly as industries like construction fell off a cliff. But the pandemic is heavily hitting service sector employment.
As tens of millions of Americans lost their jobs in April, 78.3 percent of them classified their separation as a temporary layoff, while 11.1 percent said their situation was permanent.As tens of millions of Americans lost their jobs in April, 78.3 percent of them classified their separation as a temporary layoff, while 11.1 percent said their situation was permanent.
That is an unusually high share of people on temporary layoffs, and it could be good news for the economy because short-term job losses suggest that hiring may come back quickly when businesses reopen.That is an unusually high share of people on temporary layoffs, and it could be good news for the economy because short-term job losses suggest that hiring may come back quickly when businesses reopen.
But there’s an important caveat: Temporary layoffs can always become permanent later, if the economic situation worsens.But there’s an important caveat: Temporary layoffs can always become permanent later, if the economic situation worsens.
Nearly nine million workers in April reported that they were employed but absent from work for “other” reasons — meaning not because they were sick, on vacation or other typical reasons for absence. That’s about 7.5 million more people than in a typical April.Nearly nine million workers in April reported that they were employed but absent from work for “other” reasons — meaning not because they were sick, on vacation or other typical reasons for absence. That’s about 7.5 million more people than in a typical April.
The Labor Department on Friday said that many of these people probably should have been recorded as “unemployed” instead. And if they had been, “the overall unemployment rate would have been almost 5 percentage points higher than reported” — or close to 20 percent.The Labor Department on Friday said that many of these people probably should have been recorded as “unemployed” instead. And if they had been, “the overall unemployment rate would have been almost 5 percentage points higher than reported” — or close to 20 percent.
The issue highlights how standard economic measures are struggling to reflect the unusual nature of this crisis.The issue highlights how standard economic measures are struggling to reflect the unusual nature of this crisis.
Across dozens of industries, only one added a meaningful number of jobs in April: general merchandise stores, including warehouse clubs and supercenters. They increased their payrolls by 93,400 positions.Across dozens of industries, only one added a meaningful number of jobs in April: general merchandise stores, including warehouse clubs and supercenters. They increased their payrolls by 93,400 positions.
That makes sense given that Americans need to buy groceries and other at-home staples, and Walmart has said publicly that it is hiring on a large scale to meet demand.That makes sense given that Americans need to buy groceries and other at-home staples, and Walmart has said publicly that it is hiring on a large scale to meet demand.
Anyone still thinking that the pandemic’s economic effects are limited to people in restaurants, travel and similar service businesses is very much mistaken. Workers in almost every industry, including those that on the surface shouldn’t be affected by the pandemic at all, are at risk.Anyone still thinking that the pandemic’s economic effects are limited to people in restaurants, travel and similar service businesses is very much mistaken. Workers in almost every industry, including those that on the surface shouldn’t be affected by the pandemic at all, are at risk.
Apple said on Friday that it would reopen stores in four states next week, instituting temperature checks for customers and employees and limiting the number of people inside each store at any given time.
The company will also provide face coverings for customers who want them.
In March, Apple had closed more than 450 of its stores, or nearly every location outside of China, in response to the coronavirus outbreak. In recent weeks, it has begun to slowly reopen some stores, including in Australia, Austria and South Korea.
Next week, the company will add stores in Alabama, Alaska, Idaho and South Carolina to that list, starting with its store in Boise on Monday. It has six stores in those states, but an Apple spokesman said not all would open next week.
The European Union said on Friday that governments in the bloc would have to restrict dividends, share buybacks and bonus payments at companies that receive economic relief in the form of a stake sale or certain kinds of debt.The European Union said on Friday that governments in the bloc would have to restrict dividends, share buybacks and bonus payments at companies that receive economic relief in the form of a stake sale or certain kinds of debt.
“As the crisis evolves, many businesses will also need capital to stay afloat,” the E.U.’s competition commissioner, Margarethe Vestager, said in a statement. “If member states decide to step in, we will apply today’s rules to ensure that taxpayers are sufficiently remunerated and their support comes with strings attached.”“As the crisis evolves, many businesses will also need capital to stay afloat,” the E.U.’s competition commissioner, Margarethe Vestager, said in a statement. “If member states decide to step in, we will apply today’s rules to ensure that taxpayers are sufficiently remunerated and their support comes with strings attached.”
A government should only buy a stake in a business if there is no other option, the E.U. said, and any “aid must be limited to enabling the viability of the company.”A government should only buy a stake in a business if there is no other option, the E.U. said, and any “aid must be limited to enabling the viability of the company.”
The plan to allow stake sales came hours after Christine Lagarde, the president of the European Central Bank, said the European Union should deploy more financial firepower to help the worst-hit members.The plan to allow stake sales came hours after Christine Lagarde, the president of the European Central Bank, said the European Union should deploy more financial firepower to help the worst-hit members.
“If not all countries are cured from this crisis, the others will suffer — and not just in terms of health, but economically too,” Ms. Lagarde said at an event organized by the European University Institute.“If not all countries are cured from this crisis, the others will suffer — and not just in terms of health, but economically too,” Ms. Lagarde said at an event organized by the European University Institute.
Countries may need to issue as much as 1.5 trillion euros, or $1.6 trillion, in new debt to pay for corporate loan guarantees, unemployment subsidy programs and other measures to keep their economies afloat, Ms. Lagarde said. That is three times as much as European Union leaders have jointly committed so far.Countries may need to issue as much as 1.5 trillion euros, or $1.6 trillion, in new debt to pay for corporate loan guarantees, unemployment subsidy programs and other measures to keep their economies afloat, Ms. Lagarde said. That is three times as much as European Union leaders have jointly committed so far.
The Treasury Department said on Friday that nearly half of the “economic impact” payments being sent to Americans had been distributed in the first five weeks of the program.The Treasury Department said on Friday that nearly half of the “economic impact” payments being sent to Americans had been distributed in the first five weeks of the program.
According to the latest figures, the Internal Revenue Service, which is part of Treasury, has disbursed nearly 130 million payments worth more than $218 billion. The agency expects to disburse another 150 million payments.According to the latest figures, the Internal Revenue Service, which is part of Treasury, has disbursed nearly 130 million payments worth more than $218 billion. The agency expects to disburse another 150 million payments.
The $292 billion pot of stimulus money was created as part of the CARES Act that was passed by Congress in March. The payments for most Americans are for $1,200 per adult and $500 per child, although the amounts are smaller for people with higher incomes.The $292 billion pot of stimulus money was created as part of the CARES Act that was passed by Congress in March. The payments for most Americans are for $1,200 per adult and $500 per child, although the amounts are smaller for people with higher incomes.
Most of the payments have gone to the largest states, with Californians receiving more than 13 million payments and Texans receiving nearly 11 million payments.Most of the payments have gone to the largest states, with Californians receiving more than 13 million payments and Texans receiving nearly 11 million payments.
The Education Department said in late March that it would stop garnishing the paychecks of borrowers who had defaulted on their federal student loans, but some people are still having their wages seized, according to court filings in a lawsuit over the practice.The Education Department said in late March that it would stop garnishing the paychecks of borrowers who had defaulted on their federal student loans, but some people are still having their wages seized, according to court filings in a lawsuit over the practice.
Craigory Lee A. Jenkins works in sales at a Lowe’s store in Pinellas Park, Fla., and earns $17.58 an hour. She is behind on her loan payments, and in March, the federal government began garnishing her checks. It took $204 from her paycheck this week, leaving her with $987 in take-home pay.Craigory Lee A. Jenkins works in sales at a Lowe’s store in Pinellas Park, Fla., and earns $17.58 an hour. She is behind on her loan payments, and in March, the federal government began garnishing her checks. It took $204 from her paycheck this week, leaving her with $987 in take-home pay.
“I am living paycheck to paycheck and struggling to make ends meet,” Ms. Jenkins said in a declaration submitted on Thursday.“I am living paycheck to paycheck and struggling to make ends meet,” Ms. Jenkins said in a declaration submitted on Thursday.
Ms. Jenkins and other borrowers are part of a lawsuit against the department, filed in federal court in Washington in late April, that seeks to halt the garnishments.Ms. Jenkins and other borrowers are part of a lawsuit against the department, filed in federal court in Washington in late April, that seeks to halt the garnishments.
Angela Morabito, an Education Department spokeswoman, declined to comment on the litigation. The department has directed employers to stop garnishing wages, she said, and “is making every effort to make borrowers whole” if their wages have been taken.Angela Morabito, an Education Department spokeswoman, declined to comment on the litigation. The department has directed employers to stop garnishing wages, she said, and “is making every effort to make borrowers whole” if their wages have been taken.
Bank earnings have taken a hit and key capital ratios — meant to help them weather economic downturns safely — are declining, the Federal Reserve said in its semiannual supervision and regulation report.Bank earnings have taken a hit and key capital ratios — meant to help them weather economic downturns safely — are declining, the Federal Reserve said in its semiannual supervision and regulation report.
The Fed explained its recent bank oversight tweaks in the report to Congress, which will be followed up next week by testimony from Randal K. Quarles, the Fed’s supervisory vice chair. Those alterations have included encouraging banks to dip into their capital and liquidity cushions and temporarily excluding government bonds and central bank deposits from a leverage ratio. Together, they are an effort to keep banks lending as coronavirus lockdowns threaten the broader economy.The Fed explained its recent bank oversight tweaks in the report to Congress, which will be followed up next week by testimony from Randal K. Quarles, the Fed’s supervisory vice chair. Those alterations have included encouraging banks to dip into their capital and liquidity cushions and temporarily excluding government bonds and central bank deposits from a leverage ratio. Together, they are an effort to keep banks lending as coronavirus lockdowns threaten the broader economy.
Large bank earnings declined more than 50 percent at the start of the year compared with the first quarter of 2019, the Fed report said, as banks penciled in major loan losses. Capital levels at the banks also declined, with one key measure falling to 11 percent at the end of the first quarter from 11.5 percent at the end of 2019 at the 22 large domestic bank holding companies.Large bank earnings declined more than 50 percent at the start of the year compared with the first quarter of 2019, the Fed report said, as banks penciled in major loan losses. Capital levels at the banks also declined, with one key measure falling to 11 percent at the end of the first quarter from 11.5 percent at the end of 2019 at the 22 large domestic bank holding companies.
Bank capital is a key sign of health. Capital includes assets, such as common stock and retained earnings, that are not under contract to be repaid and can help to absorb losses.Bank capital is a key sign of health. Capital includes assets, such as common stock and retained earnings, that are not under contract to be repaid and can help to absorb losses.
Nearly two weeks after the Paycheck Protection Program began making its second round of loans, nearly 40 percent of the funds remain unclaimed — surprising lenders who thought the money would vanish fast.Nearly two weeks after the Paycheck Protection Program began making its second round of loans, nearly 40 percent of the funds remain unclaimed — surprising lenders who thought the money would vanish fast.
Just over $185 billion of the program’s $310 billion had been allocated as of Thursday evening, the Small Business Administration said in its latest report. Intended to help small companies keep their workers employed, the program offers a forgivable loan to cover eight weeks of payroll and certain other operating expenses, like rent.Just over $185 billion of the program’s $310 billion had been allocated as of Thursday evening, the Small Business Administration said in its latest report. Intended to help small companies keep their workers employed, the program offers a forgivable loan to cover eight weeks of payroll and certain other operating expenses, like rent.
But growing concern among business owners over the program’s complex and still-changing rules has damped demand. Some who took the cash are sitting on it. Those who do not spend the money on payroll will not have the loan forgiven, saddling them with a large debt during an economic collapse. For many owners, though, hiring back workers in the face of so much uncertainty does not make sense.But growing concern among business owners over the program’s complex and still-changing rules has damped demand. Some who took the cash are sitting on it. Those who do not spend the money on payroll will not have the loan forgiven, saddling them with a large debt during an economic collapse. For many owners, though, hiring back workers in the face of so much uncertainty does not make sense.
Carrie Morey owns Callie’s Hot Little Biscuit, a small group of restaurants in Atlanta and Charleston. She got a loan in the paycheck program’s second round, but is hoping for rule changes before she starts using it. She would like to have a much longer period to bring back workers and still have her loan forgiven.Carrie Morey owns Callie’s Hot Little Biscuit, a small group of restaurants in Atlanta and Charleston. She got a loan in the paycheck program’s second round, but is hoping for rule changes before she starts using it. She would like to have a much longer period to bring back workers and still have her loan forgiven.
“Even if tomorrow everything were fine and we were to go back to business as usual, it’s going to take months for us to get customers to come in the door,” Ms. Morey said Thursday at a virtual gathering of business owners.“Even if tomorrow everything were fine and we were to go back to business as usual, it’s going to take months for us to get customers to come in the door,” Ms. Morey said Thursday at a virtual gathering of business owners.
Tesla intends to restart its factory in Fremont, Calif., on Friday, after Gov. Gavin Newsom said manufacturing companies could resume operations even as other businesses are to stay closed because of the coronavirus pandemic.Tesla intends to restart its factory in Fremont, Calif., on Friday, after Gov. Gavin Newsom said manufacturing companies could resume operations even as other businesses are to stay closed because of the coronavirus pandemic.
The company informed employees of the plan in companywide emails sent late Thursday and early Friday that were reviewed by The New York Times. Tesla is heavily dependent on the Fremont plant, which produces almost all of the vehicles it sells.The company informed employees of the plan in companywide emails sent late Thursday and early Friday that were reviewed by The New York Times. Tesla is heavily dependent on the Fremont plant, which produces almost all of the vehicles it sells.
“I will be on the line personally helping wherever I can,” Tesla’s chief executive, Elon Musk, wrote in one message. “However, if you feel uncomfortable coming back to work at this time, please do not feel obligated to do so.”“I will be on the line personally helping wherever I can,” Tesla’s chief executive, Elon Musk, wrote in one message. “However, if you feel uncomfortable coming back to work at this time, please do not feel obligated to do so.”
Mr. Musk has criticized stay-at-home orders that forced the electric-car maker to cease production at the plant in Fremont, Calif., last month. At first, Mr. Musk tried to keep the plant open but was forced to shut it down by local officials. In a conference call last week, Mr. Musk called the orders “fascist.”Mr. Musk has criticized stay-at-home orders that forced the electric-car maker to cease production at the plant in Fremont, Calif., last month. At first, Mr. Musk tried to keep the plant open but was forced to shut it down by local officials. In a conference call last week, Mr. Musk called the orders “fascist.”
It is not clear whether Tesla’s reopening plan would comply with an Alameda County stay-at-home order that remains in place. Mr. Newsom said on Thursday that local governments could keep in place tougher restrictions than those that apply statewide. County officials did not respond to requests for comment.It is not clear whether Tesla’s reopening plan would comply with an Alameda County stay-at-home order that remains in place. Mr. Newsom said on Thursday that local governments could keep in place tougher restrictions than those that apply statewide. County officials did not respond to requests for comment.
Stocks rose on Friday, following global markets higher after upbeat comments from U.S. and Chinese officials about recent trade talks between the two countries.Stocks rose on Friday, following global markets higher after upbeat comments from U.S. and Chinese officials about recent trade talks between the two countries.
The S&P 500 climbed more than 1 percent. European markets were higher after a broadly positive day in Asia.The S&P 500 climbed more than 1 percent. European markets were higher after a broadly positive day in Asia.
Investors were cheered by the prospects of countries further reopening their economies, despite worries that those efforts could lead to a rise in infections. They were also bolstered by announcements from the United States and China that appeared to back their Phase 1 trade deal, which would bring their two-year trade war to a temporary truce. The White House had openly questioned China’s commitment to the deal in recent days, hurting stocks.Investors were cheered by the prospects of countries further reopening their economies, despite worries that those efforts could lead to a rise in infections. They were also bolstered by announcements from the United States and China that appeared to back their Phase 1 trade deal, which would bring their two-year trade war to a temporary truce. The White House had openly questioned China’s commitment to the deal in recent days, hurting stocks.
The optimism was widespread. Prices for U.S. Treasury bonds, which generally rise in troubled times, were lower. Oil prices also rose.The optimism was widespread. Prices for U.S. Treasury bonds, which generally rise in troubled times, were lower. Oil prices also rose.
But more grim economic data was released on Friday. The report on April payrolls in the United States is showed a loss of more than 20.5 million jobs — a breathtaking drop — and a sharp jump in the unemployment rate. Corporate earnings reports, too, are reflecting the heavy toll of the pandemic. Siemens, the European industrial giant, said profit fell 64 percent in the first quarter.But more grim economic data was released on Friday. The report on April payrolls in the United States is showed a loss of more than 20.5 million jobs — a breathtaking drop — and a sharp jump in the unemployment rate. Corporate earnings reports, too, are reflecting the heavy toll of the pandemic. Siemens, the European industrial giant, said profit fell 64 percent in the first quarter.
The stock market has shown a remarkable indifference to the dire outlook for the economy since it began to rally on March 23. That was the day the Federal Reserve signaled that it stood ready to pump an unlimited amount of dollars into financial markets to keep key borrowing markets from malfunctioning.The stock market has shown a remarkable indifference to the dire outlook for the economy since it began to rally on March 23. That was the day the Federal Reserve signaled that it stood ready to pump an unlimited amount of dollars into financial markets to keep key borrowing markets from malfunctioning.
The German airline Lufthansa said Friday it would resume flights next month to popular European holiday destinations like the Mediterranean islands of Mallorca and Crete, and Sylt in the North Sea. Starting June 1, Lufthansa will double the number of aircraft in service, to 160.The German airline Lufthansa said Friday it would resume flights next month to popular European holiday destinations like the Mediterranean islands of Mallorca and Crete, and Sylt in the North Sea. Starting June 1, Lufthansa will double the number of aircraft in service, to 160.
The electronics and engineering giant Siemens, a bellwether for the German economy, reported that first-quarter profit fell by more than half as new orders slumped. Siemens said that sales had slipped a modest 1 percent compared with the first quarter of 2019. But new orders fell 9 percent largely because of lower demand for passenger trains. Profit fell 64 percent.The electronics and engineering giant Siemens, a bellwether for the German economy, reported that first-quarter profit fell by more than half as new orders slumped. Siemens said that sales had slipped a modest 1 percent compared with the first quarter of 2019. But new orders fell 9 percent largely because of lower demand for passenger trains. Profit fell 64 percent.
Reporting and research was contributed by Nelson D. Schwartz, Ben Casselman, Jeanna Smialek, Jack Ewing, Niraj Chokshi, Alan Rappeport, Sapna Maheshwari, Stacy Cowley, Neal E. Boudette, Michael Crowley, Ken Vogel, Keith Bradsher, Liu Yi, Mohammed Hadi, Brooks Barnes, Liz Alderman, Carlos Tejada, Daniel Victor and Kevin Granville.Reporting and research was contributed by Nelson D. Schwartz, Ben Casselman, Jeanna Smialek, Jack Ewing, Niraj Chokshi, Alan Rappeport, Sapna Maheshwari, Stacy Cowley, Neal E. Boudette, Michael Crowley, Ken Vogel, Keith Bradsher, Liu Yi, Mohammed Hadi, Brooks Barnes, Liz Alderman, Carlos Tejada, Daniel Victor and Kevin Granville.