Getting a precise nationwide count of the number of people collecting unemployment benefits has been hampered since the start of the coronavirus pandemic. Data from overwhelmed and understaffed state offices has been inconsistent and strewn with errors. And there may be some double-counting as the agencies struggle to clear out the flood of new and backlogged claims.
Ernie Tedeschi, a policy economist at Evercore ISI, estimates that the actual figure is closer to 30 million, roughly one out of every five workers — a staggering number by any count.
The Labor Department categorizes the claims in separate batches. In one are those filed through states’ regular unemployment insurance systems, a number that rose last week for the first time in months. A second includes people who filed through the federal government’s temporary Pandemic Unemployment Assistance program, for workers not ordinarily eligible for state benefits. A third and growing group includes recipients who exhausted their regular benefits but are eligible for an additional 13 weeks of emergency assistance that Congress passed after the coronavirus outbreak.
Over the past couple of months, the labor market showed surprising gains as businesses reopened and rehired workers. The overall jobless rate dipped in June to 11.1 percent from a peak of 14.7 percent in April. But troubling weaknesses may be reflected in the weekly tallies of laid-off workers filing new applications, Mr. Tedeschi said.
“I’m surprised that the claims numbers haven’t gotten better yet,” he said.
Initial weekly unemployment claims,
both regular and those under the Pandemic Unemployment Assistance program
Initial weekly unemployment claims, both regular and those under the Pandemic Unemployment Assistance program
The government reported on Thursday that more than 1.4 million workers filed new claims for state unemployment benefits last week, the first time that the weekly tally has risen in more than three months.
The upturn, from about 1.3 million in the two preceding weeks, comes just days before an extra $600-a-week jobless benefit is set to expire.
An additional 975,000 claims were filed last week by freelancers, part-time workers and others who do not qualify for regular state jobless aid but are eligible for benefits under an emergency federal program, the Labor Department said. Unlike the state figures, that number is not seasonally adjusted.
“At this stage, you’re seeing all the wrong elements for recovery,” said Gregory Daco, the chief United States economist at Oxford Economics. “A deteriorating health situation, a weakening labor market and a softening path for demand.”
The report on Thursday has particular resonance: It reflects the week that will be used by the department to calculate the June jobs data and unemployment rate.
The stubbornly high rate of new weekly claims more than four months into the coronavirus pandemic “suggests that the nature of the downturn has changed from early on,” said Ernie Tedeschi, a policy economist at Evercore ISI. It may mean that businesses are shutting down again as cases surge in some places, or that funds from emergency federal loans through the Paycheck Protection Program are running out, he said — or worse, something more fundamental.
“It might be that businesses are running through their first line of credit,” he said, “and now they’re facing the music of an economy that has recovered a little bit but not nearly enough.”
Disney on Thursday gave a worrisome update on its movie business — the largest in Hollywood, by far, and still mostly shut down because of the pandemic — by delaying the theatrical release of its live-action “Mulan” indefinitely and pushing back three upcoming “Star Wars” movies and four scheduled “Avatar” sequels by one year each.
The next “Star Wars” movie will not arrive until 2023, making for a far less promising 2022 for Disney’s movie and consumer products divisions. “Mulan” was supposed to arrive in theaters on Aug. 21 after being pushed back several times already.
“It’s become clear that nothing can be set in stone when it comes to how we release films during this global health crisis,” Disney said in a statement.
In a similar move, Warner Bros. on Monday indefinitely delayed Christopher Nolan’s big-budget “Tenet,” which had been scheduled to arrive in theaters on Aug. 12.
Some upcoming Disney movies are being delayed because the coronavirus has halted movie production across Hollywood. But the “Mulan” postponement reflects the economics of blockbuster-style films and the inability of theaters in some crucial markets — New York, Los Angeles, the San Francisco Bay Area — to reopen without government approval, the timing of which is impossible to predict. To release “Mulan” on Aug. 21, Disney would need to start its advertising barrage now. But no company wants to spend a minimum of $150 million to market a movie worldwide if it can’t be sure that the advertised product will be available.
Similarly, because these movies cost roughly $200 million just to produce, the only way to make them financially viable is to make them available everywhere all at once, thwarting piracy as much as possible. New York, Los Angeles and the Bay Area are the country’s three biggest markets for ticket sales; it would be a financial calamity to release a “tent pole” movie with even one of those areas offline.
Disney’s next megamovie will now not arrive until at least November, when “Black Widow” is set to roll into theaters.
Without its movie division to generate revenue, Disney’s theme parks have become even more important to the conglomerate. Disney reopened Walt Disney World in Florida earlier this month. It has been accused of irresponsibility from people concerned about visitor and worker health, but Disney has developed what it believes are safe operating procedures. And it gets to tell investors on its Aug. 4 earnings call that at least something came back online in the quarter.
Pennies and dimes are hard to find in many parts of America after pandemic lockdowns disrupted their flow and kept households from exchanging their coin jars for dollar bills.
The United States Mint wants you to know that you can be part of the solution.
“We ask that the American public start spending their coins,” the Mint, which is part of the Treasury, implored in a release on Thursday. “The coin supply problem can be solved with each of us doing our part.”
Other options include depositing coins or exchanging them for cash.
The coin shortage has forced regional Federal Reserve banks, which distributes coins, to institute a rationing system. On June 30, the Fed established a coin task force to deal with the unfolding crisis, complete with “industry leaders in the coin supply chain.”
The shortage has become a problem for many small businesses across America and has been the topic of local news coverage and of discussion on a corner of Reddit devoted to prepping strategies.
Even big retailers are feeling the penny pinch — Walmart, CVS, Kroger and other chains have begun asking customers to pay with plastic when possible or to use exact change.
While digital payments have become prevalent, coins have remained crucial to some parts of the economy: parking meters, vending machines, amusement parks and even campground showers. For the millions of households without bank accounts, cash is an essential part of daily life.
“For millions of Americans, cash is the only form of payment and cash transactions rely on coins to make change,” the Mint said.
“As important as it is to get more coins circulating, safety is paramount,” it added. “Please be sure to follow all safety and health guidelines.”
AMC Theatres, the nation’s largest cinema chain, delayed the opening of its more than 1,000 theaters in the United States until mid-to-late August. The move was not a surprise, given that it arrived on the heels of the Warner Bros. announcement earlier this week that “Tenet,” its big-budgeted thriller from Christopher Nolan, would not be released on its rescheduled date of Aug. 12. No new date has yet been set.
With the coronavirus showing no signs of abatement, the studios and their movie theater partners have been playing a game of chicken, postponing the return to moviegoing until the virus numbers show a decline. Disney, which had rescheduled its live-action adaptation of “Mulan” for Aug. 21, has yet to announce a date shift but is likely to do so.
Theater chains large and small are struggling with the ramifications of the pandemic. Though they received initial assistance from the federal government in the form of the Paycheck Protection Program, they are still grappling with soaring fixed costs and zero revenue.
Overseas, AMC says that approximately one-third of its cinemas in Europe and the Middle East are already open and operating normally.
The Trump administration is dropping its insistence on a payroll tax cut as the centerpiece of the upcoming economic relief bill in favor of more direct payments to Americans, Treasury Secretary Steven Mnuchin said on Thursday.
The payroll tax cut, which was a priority for President Trump, emerged as an obstacle as Senate Republicans have tried to coalesce around a stimulus plan this week. Mr. Mnuchin said that the idea, which he thinks would help stimulate the economy over the longer term, will not be in the “base bill” but that it could still emerge in future legislation.
“We think the payroll tax cut is a very good pro-growth policy,” Mr. Mnuchin said on CNBC. “The president’s focus is, he wants to get money into people’s pockets now.”
Mr. Mnuchin said that Republicans had agreed to a plan to continue expanded unemployment insurance, which will expire at the end of the month. He said that the proposal would replace approximately 70 percent of a worker’s lost wages so that the policy did not create incentives for people not to return to their jobs.
“We want to make sure that the people who are out there that can’t find jobs do get a reasonable wage replacement,” Mr. Mnuchin said.
He added that there would be tax credits to encourage businesses to rehire workers. The plan would also replenish the Paycheck Protection Program so that small businesses with revenue down by 50 percent or more can apply for second loans.
His comments come as Senate Republicans on Thursday are expected to unveil a roughly $1 trillion coronavirus relief measure that will allocate more than $100 billion to schools, new aid for states to conduct testing across the country and liability protections for schools, hospitals and businesses.
The Treasury secretary also said that the Republican plan would include liability protections for businesses that are seeking to reopen to shield them from “frivolous lawsuits.”
AT&T reported second-quarter results Thursday, and the numbers revealed customer defections across it businesses, including wireless, broadband and satellite TV. The only bright spot appeared to be HBO Max, but even there the numbers looked fuzzy. Here are the highlights:
The wireless division saw a loss of 154,000 customers in its traditional service where people pay a monthly bill. The company added 165,000 new customers to its prepaid plans. Factoring in resellers and other connected devices like tablets, AT&T claims 171.4 million total wireless accounts, an 8 percent uptick from last year. The phone giant still has plenty of cash coming in the door, allowing it to pay down its enormous debt and shell out dividends.
The company’s TV service, including satellite (formerly known as DirecTV) and its online cable platform, saw a net loss of 954,000 customers, a downturn the company blamed on lower household spending because of the pandemic.
So what about HBO Max? The company’s new streaming service was introduced in late May, and in its first month it attracted 4.1 million customers. For some context, rival Disney+ signed up 10 million after the first 24 hours. AT&T said it hoped to have 50 million HBO Max customers by 2025.
To get there, AT&T will need to convert more of its regular HBO customers to HBO Max customers. More than 23.5 million people who pay for regular HBO could switch to HBO Max.
What’s making those numbers a bit hard to understand is that AT&T sells two versions of HBO. Both cost the same, but HBO Max has much more content. AT&T wants people to buy HBO Max or convert their existing HBO account to HBO Max. Because most people get HBO through their cable or satellite provider, AT&T has already cut deals with most of them to allow their customers to make the switch.
But that doesn’t mean everyone has. Or can. Amazon, for example, sells HBO through its Amazon Channels service, but it hasn’t been able to strike a deal with AT&T to convert those people to HBO Max customers. AT&T’s chief executive, John Stankey, had some harsh words for Amazon on the earnings call following the report. “We’ve tried repeatedly to make HBO Max available on Amazon,” he said, “Unfortunately, Amazon has taken an approach of treating HBO Max and its customers differently” than other services.
Customers may also be confused about HBO versus HBO Max, or may not be aware they can even make the switch — a marketing challenge for AT&T.
Revenue at the HBO division was down 5.2 percent to $1.6 billion, a result of more people cutting their cable and satellite accounts. But AT&T is spending more — costs were up about a third to $1.5 billion — to invest in HBO Max. Content is expensive.
The company’s cable network division that includes CNN, TNT and TBS (where it airs sports programming) took a big hit to its advertising business with a 37 percent drop to $796 million, the biggest shortfall across the media group.
The pandemic has taken a heavy toll on retailers, especially apparel sellers and other mall-based chains that might have otherwise stayed afloat, perhaps even for a short period, without turning to bankruptcy court.
The latest company to file for bankruptcy was Ascena Retail Group, which on Thursday became at least the ninth prominent retailer to file for bankruptcy since early May, following Brooks Brothers, Neiman Marcus Group and J.C. Penney, among others.
Ascena, just a few years ago was one of the country’s largest clothing retailers for women and girls, will close “a select number” of its Ann Taylor, Lane Bryant, LOFT and Lou & Grey stores, as well as all of its Catherines locations.
Ascena was known for decades as Dress Barn, the clothing chain founded in 1962 by Roslyn S. Jaffe, who noticed that there were few options for stylish and affordable women’s work attire even as more women were entering the work force. Dress Barn went public in 1983, around the time that the “power suit” came into vogue, exemplifying women’s desire to take on the predominantly male corporate world.
Having multiple jobs is business as usual for millions of Americans. But many cobbled-together employment arrangements that enabled people to get by when the jobless rate was skimming along at record lows collapsed once the pandemic curbed or closed large swaths of the economy.
And when hard times hit, they are excluded from regular state unemployment benefits.
“There’s a misfit between the enormous volatility and part-time jobs that make up the ways that people cobble together making money and the system that’s going to cut you a check,” said Susan J. Lambert, a professor at the University of Chicago who studies low-skilled hourly jobs.
The economic shock quickly exposed the mismatch between the reality of making a living in 2020 and the systems built to protect workers. People who rely on paychecks from different employers are already more likely to have shifting schedules and unpredictable weekly paychecks, low hourly wages and the absence of benefits like sick days and health insurance.
They are also more likely to be Black, young and without a college degree.
“The rules of the game have changed,” Ms. Lambert said, but protections for workers, like jobless benefits, have not caught up.
States have been whittling away at the backlog of unemployment claims, but persistent delays in some places have continued.
Behnaz Mansouri, an attorney at the Unemployment Law Project in Washington State, said her office was still averaging 200 phone calls a week from people who had received no benefits after waiting months, or who had inexplicably had them cut off.
Recently there has been some slow progress, she said. A number of people who had appealed a decision in March, April and May were beginning to be called in for a hearing. Those who have waited the longest, Ms. Mansouri said, are often those who have disabilities or don’t speak English well.
In Oklahoma, hundreds of frustrated workers camped out overnight hoping to sort out delays with their unemployment claims at one of the large-scale processing sessions that officials were holding around the state.
The pain of job losses can be found in every corner of the country, but Black men have had particular difficulties, said Peter Q. Blair, a co-director of the Project on Workforce at the Harvard Graduate School of Education.
The government’s June jobs report showed that although unemployment for every other group declined from May, the rate for African-American males over 20 rose to 15.8 percent from 15.3 percent.
“It’s important that we look at the way in which this crisis is having a disparate effect on the African-American community, particularly Black men,” he said.
The four-month pause that has protected millions of Americans from eviction cases is set to expire at the end of this week. But that hasn’t stopped landlords across the country from trying to get a head start forcing renters out, reports Matthew Goldstein.
Landlords in Tucson, Ariz., filed dozens of eviction cases last month despite the federal moratorium, which was put in place because of the coronavirus crisis. Legal aid lawyers had to go to court to stop the eviction of a San Antonio renter who had lost her job during a citywide stay-at-home order. And in Omaha, a court found that a struggling renter’s attempted eviction had violated the emergency law.
As the number of Covid-19 cases has surged across the country, a disturbing trend has emerged: landlords commencing eviction proceedings even though the CARES Act relief law currently protects about 12 million tenants living in qualifying properties.
State and local governments have also issued eviction moratoriums, but the CARES Act is the furthest reaching, covering as many as 12.3 million renters living in an apartment complex or single-family home financed with a federally backed mortgage. But like other moratoriums, it’s about to expire: After Friday, landlords can begin filing eviction notices for failure to pay rent. It will be at least 30 days after that before any tenants are kicked out.
Stocks on Wall Street tumbled on Thursday, with shares of large technology companies leading the decline, as investors considered the latest earnings reports and a rise in unemployment claims by workers in the United States.
The S&P 500 fell more than 1 percent in the afternoon, while the tech-heavy Nasdaq composite was down by more than 2 percent, as shares of Apple, Microsoft, and Alphabet all slid. Large technology companies have a outsize influence on the stock market indexes because of their sheer size.
Microsoft tumbled more than 4 percent even after reporting earnings late on Wednesday that were better than Wall Street had expected. Apple was one of the worst performing stocks on the S&P 500 with a decline of more than 4.5 percent.
Wall Street’s negative tone was also affected by news that more than 1.4 million workers filed new claims for state unemployment benefits last week, the first time in more than three months that the weekly tally has risen. The rise in claims comes as a surge in coronavirus cases around the United States has prompted some states to reinstate restrictions on public gatherings and close bars and restaurants again.
Investors have shaken off concerns about the impact the lockdowns might have on the economy, in part because lawmakers in Washington are in the middle of negotiations over a spending plan that will help offset some of the damage. On Wednesday, Senate Republican leaders and White House officials said that they had reached an agreement in principle on a proposal to give more than $100 billion to schools, send additional checks directly to Americans and provide $16 billion for states to conduct testing and contact tracing.
But on Thursday, the negative tone spread to other markets as well. Crude oil prices, for example, which can reflect expectations for the economy, were also lower.
🤳🏻 BuzzFeed said it had laid off 50 employees, including 10 people in its news division.The employees were among a group of 74 who were furloughed in the spring, the company said. Buzzfeed cut the salaries of its U.S. workers earning more than $40,000, and top executives had their pay reduced by 25 percent. Jonah Peretti, the company’s chief executive, said he would forgo his salary until the crisis passed. Employees will get between four and eight weeks of severance, and BuzzFeed will pay for insurance through September 30, a spokesman said.
🧹 The British technology and manufacturing company Dyson announced plans on Thursday to cut 900 jobs, about 6 percent of its global staff. Two-thirds of the job losses will be in Britain and apply to people in retail and customer service roles. The company said it hadn’t put any staff on furlough during the pandemic or used government money in any of the countries it operates in.
🏦 Senator Mitt Romney, Republican of Utah, confirmed that he would oppose Judy Shelton’s nomination to the Federal Reserve Board. It remains unclear whether Ms. Shelton, an unorthodox economist with close ties to the Trump administration, has enough votes to clear the full Senate. The Senate Banking Committee voted to advance Ms. Shelton’s nomination this week, as several Republicans who had once expressed doubts about her suitability decided to vote in her favor. Now, she and fellow Fed nominee Christopher Waller must win a simple majority vote in the full Senate to gain confirmation.
✈️ Southwest Airlines and American Airlines on Thursday reported deep losses in the second quarter of the year, as a meek rebound in travel slowed in recent weeks with the spread of coronavirus infections and travel restrictions nationwide. For Southwest, revenue declined 83 percent from the same quarter last year, resulting in an overall loss of $915 million. American saw revenue fall 86 percent, giving way to a $2 billion loss. The losses represent a reversal of fortune for both airlines, which earned hundreds of millions of dollars in profit during the same three months in 2019.
🧪 Dow, the American chemicals company, announced plans to cut 6 percent of its global work force, nearly 2,200 jobs, as it published its second quarter earnings on Thursday. The Michigan-based company said it aimed to save $500 million this year, increasing the previous target from $350 million. Its sales declined 24 percent in the second quarter, compared with last year.
— to www.nytimes.com