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Awaiting the results of the coronavirus tests in San Bernardino, California. The rise of the virus and the slow spread of the vaccine has dashed hopes for a cure. related to Alex Welch’s credit to the New York Times.
New evidence of labor market volatility emerged Thursday, highlighting the economic challenges to the Biden administration and growing pressure for a new wave of stimulus from Washington.
The Department of Labor reported that 961,000 workers filed their first application for unemployment benefits with the state last week. On a seasonal basis, the total number of new applications was 900,000.
The numbers are down from the previous week, but remain exceptionally high by historical standards and have recently returned to levels not seen since mid-summer. In a similar week a year ago, before the pandemic began, there were 282,000 initial claims.
Unfortunately, the labor market started 2021 with little momentum, according to Greg Dako, chief U.S. economist at Oxford Economics. There is no improvement, and if there is, it is a deterioration.
New restrictions and closures as part of a wave of cases in many parts of the country have resulted in job losses in the restaurant and leisure and entertainment sectors, with no relief in sight.
Layoff rates are very high and the virus is causing serious disruptions, said Rubeela Farooqi, chief economist for the high-frequency U.S. economy. The next few months are going to be pretty tough.
Earlier this month, the Labor Department reported that employers cut wages by 140,000 in December, the first cut since massive layoffs last spring.
The start of immunization in December raised hopes of a quick recovery, but the slow pace of deployment in many parts of the country has dashed those hopes. On the other hand, the approval of a $900 billion stimulus package last month and the prospect of more aid under the Biden administration has eased fears of a double-dip recession.
One of the federal emergency programs expanded by recent legislation is the unemployment compensation pandemic, which assists the self-employed, part-time workers, and others who would not normally qualify for government unemployment benefits. Last week, a total of 424,000 new applications were submitted under the program, up from 285,000 the week before.
Mr. Dako said uncertainty about the continuation of the program may have dampened applications over the past year, so last week’s jump may represent a slowdown in applications and overall weakness in the labor market.
However, pandemic unemployment benefits and the weekly $300 supplement to state and federal unemployment benefits will expire in mid-March unless new legislation is passed.
Ms Farooqi said it was unlikely that the economy would have improved significantly by then. Households and businesses need more help, she said. Many companies will close and with them many jobs will be lost. This poses a risk to the economy in the short term.
Overall, the best bet for the economy is a better transplant, said Carl Tannenbaum, Chief Economist of Northern Trust in Chicago.
There is no better economic incentive than a successful launch of a vaccine, he said. This reduces the risk of human interaction and provides a base on which different types of business can be opened for an extended period.
Lower interest rates have led to an increase in home purchases and refinancing…. John Rau/Presse Associée
Although the labour market is in difficulty, there are signs that other economic measures are becoming more positive. Interest rates are rising, suggesting that traders expect faster growth and higher prices once mass vaccinations are in place and the coronavirus has been pushed back.
The yield on the 10-year Treasury note has risen 20 basis points to 1.10% over the past two months, breaching the 1% threshold on January 6 by 1.5%. Interest rates remain extremely low by historical standards, but a further rise could threaten one of the economy’s most important bright spots: the housing market.
Lower interest rates led to an increase in home purchases and refinancing as borrowers took advantage of the Federal Reserve’s interest rate cuts following the coronavirus crisis in March.
Low interest rates also gave a boost to the stock market as profit-seeking investors turned to stocks in search of faster growth. Rising interest rates, reflecting falling bond prices as other investments become more attractive, will almost certainly undermine the momentum that has driven major stock market indices to record highs.
So far, economists have minimized the likelihood of a rate hike. Still, all eyes are on the performance, says Carl Tannenbaum, chief economist at Northern Trust in Chicago.
That’s the number one question my clients ask me, Mr. Tannenbaum said. I know there are those who believe 10 year returns can come from their moorings and reach 1.5 or 2%. But I think it’s highly unlikely.
Even if Tannenbaum is right about the strength of the housing market, rising yields could stifle the Biden administration’s efforts to stimulate the economy.
The so-called bond vigilantes raised interest rates in the 1990s under the Clinton administration and helped officials prioritize deficit reduction over new spending.
We just raised our interest rate forecast for 2021, said Scott Anderson, chief economist at Bank of the West in San Francisco. If Mr. Biden gets more stimulus, there will certainly be more concerns about the pace of Treasury issuance. All of this could make the bond market nervous.
For now, however, a significant rate hike is unlikely, said Gus Faucher, chief economist of PNC Financial Services in Pittsburgh. In addition, the Federal Reserve can increase returns by purchasing more assets and buying longer maturity bonds.
The Fed has several options, Volker said. And the Biden administration has made it clear that the economy needs more stimulus. I don’t expect them to abandon their stimulus plans even if interest rates rise.
The New York union decided to quit on Thursday after the latest round of negotiations with management broke down. in connection with Gina Moon’s credit for the New York Times.
Union workers in New York didn’t show up for work Thursday.
More than 100 workers represented by the New Yorker union, which includes fact checkers, Web producers and other editorial workers, decided to call a daylong strike after recent rounds of negotiations with management failed, said union president Natalie Meade.
It’s about the payment. Mead, who checked the facts in the magazine, said the union wants to raise the minimum wage to $65,000. In recent negotiations, New York executives failed to reach that figure, she said, and instead proposed a salary increase, which she described as insulting.
They already know they are underpaying us, Mead said.
The union, which does not represent New York City staff writers, has been working on a collective agreement since 2018. The walk began at 6 a.m. Thursday and lasted 24 hours.
Prior to the negotiations, the union conducted a wage study based on data from parent company Condé Nast Magazine. The survey found that the average salary of The New Yorker’s unionized staff was $64,000 and $42,000 for the company’s editorial staff.
In a statement Thursday, a New York spokesman said the proposals made in recent wage negotiations were initial suggestions.
We hope the union will negotiate in good faith and make a counteroffer, as is customary in negotiations, the statement said. This allows us to work together productively to complete a final contract as quickly as possible.
A New York spokesman also laughed at the union’s wage study, adding: We strive for a fair compensation. We question some of the conclusions of this study and are determined to reach a fair agreement.
In September, Senator Elizabeth Warren, Democrat of Massachusetts, and Representative Alexandria Ocasio-Cortez, Democrat of New York, showed solidarity with union workers who planned to hold a digital picket line to pressure management to include a just cause proposal in their agreement.
Justice is a provision often found in union contracts that sets a standard employers must meet to discipline or fire employees. The New Yorker’s management eventually agreed to hire him.
The New York union is part of the New York News Guild, which represents employees of the New York Times, Reuters, the Daily Beast and other news organizations.
To help the White House vaccinate 100 million people in the first 100 days, Amazon has offered to vaccinate a large portion of its employees.Credit…Johannes Eisele/Agence France-Presse – Getty Images
On President Biden’s first day at the helm of consumer goods company Amazon, Dave Clark sent a letter to the White House offering to help reach the goal of vaccinating 100 million people within the first 100 days of the administration. The retailer offered to vaccinate a large number of its employees as a backup.
The e-commerce giant has made similar overtures to the governments of Tennessee and Washington state, though Amazon is not among the companies that the Washington state government announced this week as partners in its vaccination plan.
The first letters to the governors were signed by Brian Huesman, who heads Amazon’s U.S. lobbying team, who immediately asked the Centers for Disease Control and Prevention for permission to vaccinate needed employees in warehouses, data centers and Whole Foods.
The company hired a health care provider to vaccinate employees, according to the letters.
This suggests that public-private partnerships for vaccine delivery could include bonuses for participating companies, notes the DealBook newsletter, which could give companies a way to put pressure on workers to comply with priorities set by the government. Several states are experiencing difficulties in obtaining vaccines as quickly as possible due to financial, personnel and logistical problems. In his letter to Biden, Clark told him that Amazon could help with operations, information technology and communications capabilities, but he did not specify what this would entail.
Volkswagen’s new electric car, ID.3. The car had software problems last year that delayed its arrival in the showroom. in connection with Ints Kalnins/Reuters credit.
Volkswagen, Europe’s biggest carmaker, must pay a fine of more than 100 million euros, the equivalent of $120 million, after failing to reduce carbon dioxide emissions from its cars last year to meet European standards.
The company attributed this to pandemic-related disruptions in car sales, which delayed the launch of ID.3, Volkswagen’s new electric car.
However, the failure to meet environmental standards is a setback for Volkswagen, which is trying to position itself as a company that makes electric cars available to the general public. The German company is still recovering from the 2015 emissions scandal, which severely damaged its reputation.
European Union regulations that came into force last year require car manufacturers to drastically reduce emissions of carbon dioxide that are harmful to the climate. Volkswagen said it had reduced the average CO2 emissions of its vehicles by 20% compared to 2019, but this was not enough to avoid penalties.
30,000, or $36,000, suffered from software problems that delayed implementation. However, the company said it had shipped 57,000 ID.3s by 2020 and that demand is strong.
The ID.3 won’t be sold in the U.S., but Volkswagen plans to start delivering the ID.4, an electric SUV, to U.S. dealers in March. The car has a starting price of $40,000.
Volkswagen has not said exactly how much the European fine for the emissions will be, only that it will exceed 100 million euros. Matthias Schmidt, an independent analyst based in Berlin who monitors electric car sales, estimated the fine at 140 million euros. Volkswagen said it already has enough money set aside not to affect fourth-quarter earnings.
The seat of the European Central Bank in Frankfurt. Bank policymakers have pledged to spend 1,900 billion euros on bond markets to keep interest rates low…Kai Pfaffenbach/Reuters
The European Central Bank pledged on Thursday to maintain a light flow of money after its president Christine Lagarde said the eurozone economy shrank in the last three months of 2020 and the outlook for 2021 was uncertain.
As expected, the Bank left its stimulus measures intact after it stepped up de facto money printing in December to limit the economic damage of the pandemic.
Following the Board meeting, the Bank confirmed its intention to pump up to EUR 1,900 billion (USD 2,300 billion) of new money into the bond markets as part of an emergency program to keep market interest rates low.
The bond purchase will last at least until March 2022 and even longer if necessary, the bank said. The central bank also said it would support a program that effectively pays banks to lend to businesses and consumers.
Lagarde stressed that the bank could adjust the number of stimulus measures up or down depending on how quickly the pandemic is brought under control. All tools can be customized and nothing is overlooked, she told reporters in an online conference.
The ultimate goal, which Ms Lagarde has reiterated on several occasions, is to keep borrowing costs down for businesses, Eurozone citizens and governments.
Their announcement that stimulus could be reduced also raised hopes that the central bank could expect a faster economic recovery. However, Lagarde, citing persistent blockages and slow vaccine use, said she remains cautious, although she does not foresee a recession in the first quarter of 2021.
I wish I could be cautiously optimistic, Ms Lagarde said. I’m old enough to be realistic and see how a situation unfolds, which is really hard to predict.
- Wall Street shares were flat early Thursday, a day after the S&P 500 index closed at a record high.
- The British FTSE 100 and the Stoxx Europe 600 rose slightly, with the latter reaching its highest level in 11 months. Most Asian markets were higher.
- United Airlines dropped more than 4 percent after the airline reported a $1.9 billion loss in the fourth quarter, bringing its total loss for 2020 to just over $7 billion – its worst year since it merged with Continental Airlines a decade ago.
- In Europe, some renewables increased their gains on Thursday. President Biden reaffirmed the U.S. commitment to the Paris climate agreement and pledged significant funding for the development of alternative energy sources.
- Shares in Gamesa, Siemens’ Spanish subsidiary that produces wind turbines, rose more than 3% on Thursday. Orsted and Vestas, two Danish wind energy companies, are also up, with gains of nearly 6% and 8% this week.
Ramp service workers unload cargo from a United Airlines flight at Chicago’s O’Hare International Airport in December.Credit…Sebastian Hidalgo for the New York Times
United Airlines lost $1.9 billion in the fourth quarter, bringing its total loss for 2020 to just over $7 billion – its worst year since it merged with Continental Airlines a decade ago. Despite this devastating loss, the airline expects 2021 to be a transition year in preparation for recovery from the coronavirus pandemic.
The truth is that Covid-19 has changed United Airlines forever, CEO Scott Kirby said in a statement. The passion, teamwork, and perseverance that the United Airlines team will bring to 2020 is exactly what will help us build a new United Airlines that is better, stronger, and more profitable than ever.
The airline generated about $3.4 billion in operating revenue in the final three months of last year, down more than two-thirds from the same period in 2019. It ended the year with access to nearly $20 billion in cash and cash equivalents, excluding federal stimulus loans.
Last week, Delta Air Lines announced a $12.4 billion loss for 2020, which its CEO called the most difficult year in Delta’s history.
In anticipation of a recovery, United has resumed overhauling aircraft and engines so that planes set aside by low demand will be ready to fly again when more people start flying again, she said.
But this recovery could take a long time. United said it expects to generate about a third more operating revenue in the first quarter of this year than in the same three months of 2019. Most analysts believe that the airline industry will not fully recover from the pandemic for several years.
Oil companies have already discovered about 10 billion barrels of probable recoverable oil and gas reserves off the coast of neighboring Guyana… Credit… Adriana Lureiro Fernandez for the New York Times.
Suriname, Guyana and Brazil are new areas of operation for oil companies and attract more new investment than the Gulf of Mexico and other more established oil fields. They help keep world oil prices relatively low and undermine efforts by Russia and its allies in the Organization of the Petroleum Exporting Countries, such as B. Saudi Arabia to control world supply and raise prices.
The recent resurgence of interest in Guyana and Suriname is somewhat surprising because their promises as oil producers often prove empty, reports Clifford Krauss of the New York Times. Between 1950 and 2014, companies drilled more than 100 defective wells, most of them in shallow water. But after the discovery of rich deposits in the deep waters off the Brazilian coast, Exxon Mobil and other companies came back and took a different tack. In 2015, Exxon struck a pusher in Guyana waters, paving the way for current exploration.
In French Guiana, oil companies have discovered more than 10 billion barrels of likely available offshore oil and gas reserves, according to energy consultancy IHS Markit. Production started in 2019 and is increasing rapidly. According to consultants, Guyana is already among the 50 largest oil reserves in the world.
Suriname has reserves of at least three to four billion barrels, or up to half of the new oil and gas reserves discovered in the world last year, according to energy experts.
Oil companies say they can make money in Suriname with oil prices at $30 to $40 a barrel because of lower costs. This is about the same as the threshold in French Guiana and is well below the current oil price. It is also below break-even in many places, including some shale gas fields in the United States where costs are usually close to $50 a barrel.
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