Markets Live Updates: Unemployment and Economics News – The New York Times

Empty Delta ticket counters at Salt Lake City International Airport in April. The airline reported a loss of nearly $12.4 billion for 2020.
Credit…Rick Bowmer/Associated Press

Delta Air Lines lost $755 million in the fourth quarter, bringing its losses to nearly $12.4 billion in 2020, a year in which the airline industry was battered by a pandemic that crippled air travel.

“Our December quarter results capped the toughest year in Delta’s history,” Ed Bastian, Delta’s chief executive, said in a statement Tuesday morning. “While our challenges continue in 2021, I am optimistic this will be a year of recovery and a turning point that results in an even stronger Delta.”

The airline brought in nearly $4 billion in operating revenue in the last three months of the year, a 65 percent decline from the same quarter a year earlier. But Delta also nearly halved its “daily cash burn,” an approximate measure of spending on core operations and investments, which analysts use to gauge how close a business is to taking in more cash than it is spending.

The distribution of coronavirus vaccines has given Delta and other airlines hope, but a meaningful recovery is not expected until the vaccines are widely administered, which is not expected until at least the second half of the year. During the first three months of 2021, Delta expects scheduled flight capacity to be down about a third and revenue to be 60 to 65 percent lower compared with the same quarter in 2019.

In the earnings announcement, Glen Hauenstein, Delta’s president, said the airline expected the year to unfold in three phases: choppy at first, followed by “an inflection point” and then a sustained recovery “as customer confidence gains momentum, vaccinations become widespread and offices reopen.”

Holiday travel provided some relief to the industry, but air travel is still down more than 60 percent compared with last year, according to the latest Transportation Security Administration airport security screening data.

A closed restaurant in Santa Barbara, Calif. The winter coronavirus wave has pummeled the leisure and hospitality industries.
Credit…Bryan Denton for The New York Times

New claims for state unemployment benefits sharply increased last week as the resurgent pandemic continued to batter the economy.

A total of 1.15 million workers filed initial claims for state unemployment benefits during the first full week of the new year, the Labor Department said. Another 284,000 claims were filed for Pandemic Unemployment Assistance, an emergency federal program for freelancers, part-time workers and others normally ineligible for state jobless benefits. Neither figure is seasonally adjusted. On a seasonally adjusted basis, new state claims totaled 965,000.

It was the first week since July in which the unadjusted number of new state claims exceeded one million. Before the pandemic, weekly filings typically totaled around 200,000.

Economists had been bracing for a fresh wave of claims as the virus battered the service industry. The government reported last week that the economy shed 140,000 jobs in December, the first drop in employment since last spring, with restaurants, bars and hotels recording steep losses.

“Today’s report shows that we’re in a deep economic hole, and we’re digging in the wrong direction,” said Daniel Zhao, senior economist with the career site Glassdoor. “The report obviously shows that the rise in claims is worse than expected, and there is reason to think that things are going to get worse before they are going to get better.”

The holidays may have temporarily depressed unemployment claims in previous weeks, with people delaying filing for benefits until the new year. But several economists expressed skepticism that filing delays were a major driver of the uptick in claims last week.

“I don’t think there’s any question that on the margin, there could be some unusual things going on,” said Mark Hamrick, senior economic analyst at Bankrate. “But we have to think also about the fact that these are not our grandfather’s unemployment lines — meaning much of this is done digitally. I think if one just tries to understand human nature, it doesn’t make a lot of sense that someone would be delaying a request for financial assistance when they’re out of work.”

More likely, economists say, is that the availability of a $300 federal supplement to other unemployment payments — part of the $900 billion stimulus package that President Trump signed into law last month — prompted an increase in demand for benefits.

The labor market has rebounded somewhat since the initial coronavirus wave in the spring. But of the 22 million jobs that disappeared, nearly 10 million remain lost.

“Compared to then, we are doing better,” said AnnElizabeth Konkel, an economist at the career site Indeed, referring to the spring. “But compared to the pre-Covid era, we still have so far to go.”

Still, economists and analysts see better times ahead. As more people are vaccinated, cases will begin to fall, which will ease restrictions on businesses and could lead to a resurgence in consumer activity, helping to revive the service industry.

Perhaps more immediately, President-elect Joseph R. Biden Jr. has pledged to put forward a stimulus package that would provide relief to individuals, small businesses, students, schools and local governments.

A Napa Valley resident was vaccinated against Covid-19 on Wednesday. President-elect Joseph R. Biden Jr. is set to announce an expansion of the national vaccine effort.
Credit…Max Whittaker for The New York Times

President-elect Joseph R. Biden Jr. on Thursday is expected to outline a $1.9 trillion spending package to combat the coronavirus pandemic and its effects on the economy, with an initial focus on large-scale expansions of the nation’s vaccination program and virus testing capacity, according to two people familiar with the plans.

Mr. Biden will detail his proposal, which he and his economic team have been honing for weeks, in an evening speech in Delaware. The efforts will cover the pandemic, the economy, health care, education, climate change and other domestic priorities, Brian Deese, the incoming director of the National Economic Council, said at the Reuters Next conference on Wednesday.

Top Democrats in Congress have said in recent days that they are preparing for the efforts to span two bills.

The first package, which will be the focus of Thursday’s speech, will include money to complete $2,000 direct payments to individuals, and aid to small businesses and local and state governments, components that Mr. Biden has emphasized in recent weeks, will be part of the initial package. That will come in the form of additional $1,400 stimulus checks, topping up the $600 checks that Congress approved in December.

Others briefed on Mr. Biden’s thinking said he would also call for the first piece of legislation to include an extension of supplemental federal unemployment benefits, which are set to expire in March for many workers, and more help for renters.

Plans for the first package also include a significant increase in spending on vaccine deployment, testing and contact tracing, Mr. Deese said, and Mr. Biden will seek enough money to allow most schools to open, in an effort to increase labor force participation.

“We need to get the schools open,” Mr. Deese said, “so that parents, and particularly women, who are being disproportionately hurt in this economy, can get back to work.”







Fed Will Not Raise Interest Rates Anytime Soon, Powell Says

Jerome H. Powell, the chair of the Federal Reserve, said the U.S. economy is a long way from recovery and the central bank would not raise interest rates anytime soon.

The economy is far from our goals, and as I mentioned a couple of times, we’re strongly committed to a framework of using our monetary policy tools until the job is well and truly done. When the time comes to raise interest rates, we’ll certainly do that in that time. By the way, is no time soon. Remember, we’re a long way from maximum employment. There’s plenty of slack in the labor market. Unlikely that wage pressures are going to be reaching a level that would create — support higher inflation. Also second, the other factor, I’d point to is look around the world, shortage of demand in lots of large advanced economy countries around the world with — who began this crisis at deeply negative interest rates and have had little policy space with interest rates. Now, there are other things they can do, and they are doing, but that all is going to hang around for a while. And the U.S. economy is strongly integrated with the rest of the world. And that’s going to matter. Surveys now show that market participants expect us not to raise rates until inflation has reached 2 percent, and until the labor market is very strong indeed. And that is also consistent with our rate guidance. I’m optimistic about the economy over the next couple of years. I really, and we’ve got to get through this very difficult period this winter with the spread of Covid. But as the vaccines go out, and we get Covid under control, there’s a lot of reason to be optimistic about the U.S. economy.

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Jerome H. Powell, the chair of the Federal Reserve, said the U.S. economy is a long way from recovery and the central bank would not raise interest rates anytime soon.CreditCredit…Pool photo by Greg Nash

Jerome H. Powell, the chair of the Federal Reserve, made it clear on Thursday that the central bank would be cautious in easing off its support for the economy — and that action was anything but imminent. Speaking during a webcast question-and-answer session, Mr. Powell said it would take time for the economy to recover from the pain of the pandemic era.

“We’re a long way from maximum employment, there’s plenty of slack in the labor market,” he said, noting also that weakness in global economies would weigh on progress in the United States. And if inflation picks up substantially, he added, the Fed has policy tools to counteract that. “Too low inflation is the much more difficult problem to solve.”

Some investors have worried that the Fed might speed up its plans to reduce its enormous bond purchases, or even to lift interest rates from their near-zero setting. The central bank has been buying about $120 billion in Treasury and mortgage-backed debt each month to keep markets operating smoothly and to help support the economy.

Top officials have been clear that economic conditions remain well short of their twin targets — maximum employment and slow but steady price increases. Mr. Powell reiterated that there was a long way to go to get the economy back to full health.

“When the time comes to raise interest rates, we will certainly do that,” he said. “And that time, by the way, is no time soon.”

Fitbit has 29 million customers, a small share of the global market for fitness tracking devices.
Credit…Michele Tantussi/Reuters

Google on Thursday announced it had finalized its $2.1 billion acquisition of Fitbit, after a deadline passed for the Justice Department to object to the deal.

Fitbit gives the search company a giant leap into the wearable health tech market, putting it more in direct competition with Apple.

In a blog post announcing the completion of the deal, Google said it was committed to protecting the privacy of users, the main sticking point for global regulators who reviewed the merger. The search company promised regulators it would not collect data to be used for targeted advertising.

“This deal has always been about devices, not data,” Rick Osterloh, Google’s senior vice president of devices and services, said. “We worked with global regulators on an approach which safeguards consumers’ privacy expectations.”

James Park, the chief executive of 13-year-old Fitbit, said under Google, with its vast resources, FitBit’s prospects were “truly limitless.” Fitbit has 29 million customers, a small share of the global market for fitness tracking devices. The giant in the field is Apple, which nearly 40 percent of the wearable tech market, according to IDC research.

Google’s privacy commitments were enough to persuade European regulators to approve the deal in December after a 13-month investigation. The regulators approved the deal on privacy commitments and with Google’s promise to continue providing its free Android software to competing makers of fitness and health devices.

The business deal was completed after the Justice Department did not object to the deal by Jan. 13, its deadline for making such a move. The Justice Department, which is suing Google for antitrust violations in its search business, said it was still investigating the deal. Regulators can scrutinize finalized mergers and acquisitions.

“The Antitrust Division’s investigation of Google’s acquisition of Fitbit remains ongoing,” said Alex Okuliar, a senior antitrust official for the agency. The Justice Department, Mr. Okuliar said, “continues to investigate whether Google’s acquisition of Fitbit may harm competition and consumers in the United States.”

Google said in a statement that it continues to be in touch with the agency. “We are confident this deal will increase competition in the highly crowded wearables market, and we’ve made commitments that we plan to implement globally,” the company said.

A coal-fired plan in Stratton, Ohio. Banks have stopped lending to some of the fossil fuel industry’s most harmful practices.
Credit…Brian Snyder/Reuters

Over the past several years, big banks around the world have cut off lending to some of the fossil fuel industry’s most harmful practices, like coal mining and the use of coal-fired power plants.

Decisions like those would be prohibited by a new Trump administration rule finalized on Thursday — although the change may be swiftly undone by the incoming Biden administration, to the relief of the banks who opposed it.

On his last day as acting comptroller of the currency, Brian Brooks finalized a rule that the Office of the Comptroller of the Currency, which regulates the country’s biggest banks, is calling the Fair Access rule. It says that banks must offer the same products and services to everyone, unless they can prove to the regulator that a specific borrower is too much of a risk.

Banks that cut off companies conducting legal businesses “need to show their work and the legitimate business reasons for doing so,” Mr. Brooks said in a statement.

The rule is set to take effect on April 1, but might not make it that far. The rule is one of a long list of changes that Democrats expect to undo after President-elect Joseph R. Biden Jr. takes office.

The rule was among a series of last-minute, industry-friendly changes that the Trump administration is making in its final days. Lobbying groups were given just 25 business days to comment on the proposal — over a period that stretched from Thanksgiving to Christmas to just after New Year’s Day — yet they made their dismay perfectly clear.

Greg Baer, the chief executive of the Bank Policy Institute, a trade group representing the biggest banks, wrote to the regulator in December to ask that the rule be withdrawn. In a statement posted on group’s website on Thursday, Mr. Baer said banks were disappointed in the decision to fast-track a rule that was “hastily conceived and poorly constructed.”

“The rule lacks both logic and legal basis, it ignores basic facts about how banking works, and it will undermine the safety and soundness of the banks to which it applies,” he said.

The Trump administration on Thursday added the Chinese National Overseas Oil Corporation, one of China’s largest oil and gas producers, to an “entity list” that will restrict its ability to purchase American exports, citing the company’s “reckless and belligerent actions” in the South China Sea.

The Department of Commerce, which made the announcement, also said it would add a Chinese company named Skyrizon to a separate list of companies that have ties to the Chinese military, which will result in new restrictions on investing in and selling products to the company.

The Trump administration has steadily ramped up restrictions on the sale of American technology to Chinese entities, saying that such sales pose a national security risk. The Chinese government fuels its military development in part through policies that allow it to access and replicate sensitive technologies for its militarization efforts, the Commerce Department said.

In a separate announcement Thursday morning, the department said that it was expanding its restrictions on exports of technology to prohibit companies from selling goods to foreign intelligence services in Cuba, China, Iran, North Korea, Russia, Syria and Venezuela. The department said it would also expand the categories of goods that fall under those restrictions.

  • Stocks on Wall Street fell on Thursday, retreating for the second time this week after notching record highs last week, even as investors anticipated President-elect Joseph R. Biden Jr.’s announcement of a multitrillion-dollar spending plan to counter the pandemic’s impact on the U.S. economy.

  • The S&P 500 fell 0.4 percent, ending lower than it stood a week ago. In Europe, the Stoxx Europe 600 index rose 0.7 percent and London’s FTSE 100 was up 0.8 percent.

  • Mr. Biden’s full plan will reportedly cost $1.9 trillion, and is expected to initially focus on expanding the country’s vaccination program and virus testing capacity.

  • Mr. Biden is expected to provide details in a speech Thursday evening in Delaware, hours after the latest tally of weekly unemployment claims showed a sharp rise in newly jobless Americans. Hiring remains dreadful, with employers recording a net loss of 140,000 jobs in December. Last spring, as the pandemic arrived in the United States, 22 million jobs disappeared. Nearly 10 million remain lost.

  • The latest data from China shows a humming economy. Exports rose 18 percent in December from a year earlier, reflecting global demand for work-from-home devices. Imports also increased, up 6.5 percent from a year ago, a sign of a strengthening domestic consumer economy.

Erna Solberg, the prime minister of Norway, on a tour of New York Harbor in 2019 to discuss Equinor’s wind farm project for New York State. This week Equinor and BP were chosen for two more wind projects.
Credit…Gabriela Bhaskar for The New York Times

Gov. Andrew M. Cuomo of New York has picked two European giants, Norway’s Equinor and BP, to supply the state with clean electricity from wind turbines planted on two large tracts in the Atlantic.

Offshore wind developers are attracted to the East Coast of the United States because of the availability of shallow water sites suitable for wind farms and the proximity of major electric power consuming centers like New York and Boston.

Until recently, offshore wind was largely a European industry but it has gained interest elsewhere as larger turbines and other innovations have brought down costs.

The deal will bring investment of nearly $9 billion, according to a news release from the state government. One of the sites is 20 miles off the south shore of Long Island, and the other is about the same distance south of Nantucket. The projects are expected to produce power late in this decade.

Equinor had already reached a $3 billion offshore power deal with New York in 2019. That wind farm plus the two just announced will have generating capacity sufficient to power 1.8 million homes.

For European oil companies like Equinor, the former Statoil, offshore wind projects provide opportunities to invest billions of dollars to advance their agenda of shifting away from oil and gas toward cleaner energy. Equinor moved early to acquire rights to ocean acreage off the United States and last year agreed to sell a 50 percent stake in its U.S. business to BP for $1.1 billion.

Equinor, other companies and the state will invest $644 million in a port in South Brooklyn and other facilities for constructing and servicing the wind farms, according to the news release.

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