Unemployment Claims Top 30 Million in U.S.: Live Updates

Macy’s plans to reopen all of its stores within six weeks.

Macy’s plans to reopen 68 of its stores on Monday in states with looser restrictions for non-essential businesses, and another 50 on May 11, the company said in an email on Thursday.

The beleaguered company, which also owns Bloomingdales and Bluemercury, expects that all 775 of its locations will be reopened in six weeks based on state and local guidelines and if infection rates decline as projected, Macy’s chief executive, Jeff Gennette, said in an interview with The Wall Street Journal.

In an online presentation, Macy’s said that its stores must meet certain requirements to reopen. The stores must be “financially attractive” and have “minimum viable staffing.” They must also meet certain health and safety standards, including staff training on new health and safety routines, as well as enough sanitation supplies and sneeze guards installed.

To counter a deep economic decline, the European Central Bank said Thursday it will effectively pay banks to lend money as it vowed to do whatever is necessary to counteract the economic impact of the coronavirus.

Under certain conditions the central bank will allow commercial banks in the eurozone to borrow at a rate of minus 1 percent provided the money is passed on to businesses and consumers. The negative interest rate means that banks do not need to pay back all of the money that they borrow.

Christine Lagarde, the president of the E.C.B., said at a news conference Thursday that the eurozone economy could decline by as much as 12 percent this year. The downturn is “unprecedented in peacetime,” she said.

In a statement Thursday, the central bank also said that it was prepared to further increase its purchases of government and corporate bonds, a form of money printing intended to keep market interest rates low and make it easier for businesses and consumers to get credit.

The central bank had previously earmarked more than 1 trillion euros, or $1.1 trillion, for asset purchases. But the bank said Thursday it is prepared to raise that sum “as much as necessary and for as long as needed.”

Consumer spending plunged in March.

The Commerce Department reported on Thursday that consumer spending in March fell 7.5 percent from February’s level, a stunning decline that helps explain why the overall economy is so weak. Consumer activity is responsible for two-thirds of the country’s economic performance.

The data came a day after the government said U.S. gross domestic product, the broadest measure of goods and services produced in the economy, fell at a 4.8 percent annual rate in the first quarter of the year. That is the first decline since 2014, and the worst quarterly contraction since the country was in a deep recession more than a decade ago.

Even so, most of the quarter came before the coronavirus pandemic forced widespread shutdowns and layoffs. Economists expect figures from the current quarter to show G.D.P. contracting at an annual rate of 30 percent or more.

The American economy continues to stagger under the weight of the coronavirus pandemic, with another 3.8 million workers filing for unemployment benefits last week.

The figures announced Thursday by the Labor Department bring the number of workers joining the official jobless ranks in the last six weeks to more than 30 million, and underscore just how dire economic conditions remain.

Many state agencies still find themselves overwhelmed by the flood of claims, leaving perhaps millions with dwindling resources to pay the rent or put food on the table.

If anything, according to many economists, the job losses may be far worse than government figures indicate. A study by the Economic Policy Institute found that roughly 50 percent more people than counted as filing claims in a recent four-week period may have qualified for benefits but were stymied in applying or didn’t even try because they found the process too formidable.

“The problem is even bigger than the data suggest,” said Elise Gould, a senior economist with the institute, a left-leaning research group. “We’re undercounting the economic pain.”

The Fed will expand its program to bolster midsize businesses.

The Federal Reserve on Thursday said it plans to expand its effort to lend directly to midsize businesses, called the Main Street lending program.

The program, which the Fed first announced on March 23, is part of the central bank’s broader push to keep credit flowing into the economy. The Fed has yet to give a start date for the program.

Fed officials had previously provided an outline of how the Main Street program might work, but went back to the drawing board after receiving more than 2,200 comments from banks, businesses and individuals recommending tweaks. Now the Fed will make loans as small as $500,000 — down from a minimum of $1 million previously — and expand eligibility requirements so that bigger companies can qualify.

The revision also creates a new program category that will allow riskier companiesto access the Fed-supported loans.

“If somebody wants to stay in their house, that’s great. They should be allowed to stay in their house, and they should not be compelled to leave,” he said. “But to say that they cannot leave their house, and they will be arrested if they do, this is fascist. This is not democratic. This is not freedom.”

Here are the companies that have returned small-business loans.

A California citrus grower returned its federal stimulus loan on Thursday, adding to the growing ranks of companies to give back their funds amid public outcry.

Limoneira Company, an agribusiness that grows lemons, citrus, avocado and other produce, said in a securities filing that it would give back the $3.61 million loan it received from City National Bank. The company, which has 319 employees, said last week that it had received the loan. In total, more than 25 public and private companies have disclosed their decision to return the loans.

The flood of returns from firms that have received forgivable Paycheck Protection Loans comes after the federal government said they did not believe that large public companies with access to other capital should take them.

There has also been significant public frustration with a program that has delivered funds to big corporate players while Main Street businesses struggle to apply for the loans. The program reopened this week with $320 billion in new funding.

American Airlines reported a loss of $2.2 billion in the first quarter of the year, a damaging but expected blow in an industry rocked by the pandemic. The company ended the quarter with $6.8 billion in cash on hand and plans to increase that to $11 billion by the end of June, a recognition that the downturn will be prolonged.

“Never before has our airline, or our industry, faced such a significant challenge,” the company’s chief executive, Doug Parker, said in a statement.

The airline said it expected to cut costs by $12 billion this year, in part by taking advantage of cheaper fuel. It has also slashed its schedule by 80 percent in April and May, and by 70 percent in June. Like its peers, American is accelerating aircraft retirements, freezing nonessential hiring and some pay raises, cutting executive pay, and offering unpaid leave and early retirement.

American has more than $10 billion in assets that it plans to use as collateral to raise additional capital, including an estimated $4.75 billion federal loan under the stimulus passed last year. The carrier also received $5.8 billion in a mix of mostly grants and some loans from the federal government to pay employees through September, more than any other airline.

The eurozone economy shrank 3.8 percent during the first three months of the year while unemployment rose, as official data confirmed that the bloc is in the midst of its worst downturn since the common currency was introduced in 1999.

Economic output in France and Spain slumped more than 5 percent during the quarter — declines not seen since the end of World War II, according to official statistics from those countries. Lockdowns did not begin until March, near the end of the period covered by the report, suggesting that data for the quarter that began in April could be even worse.

Unemployment in the eurozone rose to 7.4 percent in March from 7.3 percent in February, interrupting a recovery that had been underway since the low point of the eurozone debt crisis in 2013.

In France, Germany and many other countries, employees are on government subsidized furloughs and do not count as unemployed. The jobless rate is almost certain to rise further as airlines, carmakers and other large corporations lay off workers in reaction to plunging sales.

Inflation in the eurozone fell to 0.4 percent in April from 0.7 percent in March as oil prices plunged. The rate is the lowest since 2016. But prices for food, alcohol and tobacco surged.

Twitter said on Thursday that it had an unprofitable quarter for the first time in more than two years, even as more users rushed to the platform. The company lost $8.3 million in the first quarter, breaking a profitability streak that started at the end of 2017.

Advertising revenue dropped substantially from March 11 to March 31, dipping 27 percent, as shelter-in-place orders were issued in the United States and advertisers cut their spending, the company said. Twitter’s revenue was $808 million in the quarter, a 3 percent increase from the prior year and above analyst estimates of $776 million.

Daily active users grew 24 percent from the previous year to 166 million, the highest growth rate Twitter has ever reported.

U.S. stocks followed European markets lower on Thursday as investors considered data revealing a sharp contraction in the eurozone economy and another surge of jobless claims in the United States.

The S&P 500 was down about 1 percent in early trading. European markets fell about 2 percent after a rally in Asia.

This news was also a boon to Chinese drugmakers that make some of the ingredients in Gilead’s drug.

Broader positive sentiment was on display in commodities markets, too, as the price of oil continued a rally after Norway, a major oil producer, said that it would limit production, something that will lift sagging prices. The price of the U.S. benchmark, West Texas Intermediate, jumped 16 percent to $17.53, while Brent crude, the international benchmark, rose more than 12 percent to $25.31 a barrel.

Catch up: Here’s what else is happening.

  • Comcast, the nation’s largest cable operator, saw it’s biggest jump in broadband subscribers and now has nearly 27 million internet customers, according to its first-quarter earnings report. But it also saw one of its biggest declines in video, with more than 388,000 people cutting their TV subscriptions. Advertising, which includes its NBCUniversal division, dropped more than 2 percent, and its theme parks business plummeted 27 percent.

  • Kraft Heinz, which has struggled in recent years as consumers steered clear of its packaged foods, reported on Thursday that first-quarter sales surged 3.3 percent to $6.2 billion as shoppers stocked up on Kraft Macaroni & Cheese, Heinz ketchup, and Planters nuts. Net income for the food giant fell 6.7 percent to $378 million.

  • The maker of Lysol, Reckitt Benckiser, reported a surge in sales for the first quarter of 2020 as the coronavirus pandemic led consumers to snap up its disinfectant products. Revenue was up 13 percent over the period a year earlier, the Britain-based business said. The company also said it saw strong demand for its Mucinex and Norofen cold and pain relief medicines.

  • Tapestry, the company that owns the brands Coach and Kate Spade, said it would open about 40 of its stores in North America on Friday for “contactless curbside or storefront pickup.”

  • Dunkin’ Brands, one of the world’s largest fast food restaurant companies, reported that sales plunged 19 percent at Dunkin’ Donuts and 23 percent at Baskin-Robbins in the last three weeks of March. The company has 21,000 franchised locations in 60 countries.

  • Royal Dutch Shell, Europe’s largest oil company, said on Thursday that it would cut its dividend for the first time since World War II as the company reported a loss of $24 million for the quarter compared to $6 billion in profits in the period a year earlier. The company said it was reducing its dividend.

Reporting was contributed by Jack Ewing, Stanley Reed, Kate Conger, Ben Dooley, Nelson D. Schwartz, Alexandra Stevenson, Sapna Maheshwari, David McCabe, Edmund Lee, Mohammed Hadi, Matt Phillips, Jason Karaian, Niraj Chokshi, Neal E. Boudette, Steve Lohr and Mike Isaac.

Source Article