New claims for state unemployment benefits sharply increased last week as the resurgent coronavirus 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.
Economists had been bracing for a fresh wave of claims as the virus batters 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’s steep losses, with restaurants, bars and hotels recording steep losses.
“We know that the pandemic is worsening, and with the jobs report last Friday, we can see that we’re in a deep economic hole and digging in the wrong direction,” said Daniel Zhao, senior economist with the career site Glassdoor.
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 push a stimulus package through Congress that would provide relief to individuals, small businesses, students, schools and local governments.
Wall Street is poised to rise when trading begins later Thursday morning, as word is spreading that President-elect Joseph R. Biden Jr. will introduce a multitrillion-dollar spending plan to counter the coronavirus’s impact on the U.S. economy.
Mr. Biden’s plan is expected to have an initial focus on expanding the country’s vaccination program and virus testing capacity, Jim Tankersley reports. Mr. Biden is to provide details in a speech Thursday evening in Delaware.
Later in the morning, economists will analyze the newest tally of U.S. unemployment insurance claims. Quite apart from the boisterous financial markets, hiring remains dreadful in the U.S. economy, 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.
European markets were gaining, with the benchmark Stoxx Europe 600 up 0.5 percent in late-morning trading. The CAC 40 in France was 0.3 percent higher and the DAX in Germany gained 0.5 percent. The gains were despite reports that Italy’s government was on the verge of collapse.
Asian indexes ended the session mostly higher, with the Nikkei in Japan up 0.9 percent, but the Shanghai Composite in China fell 0.9 percent.
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, 6.5 percent from a year earlier, a sign of a strengthening consumer economy inside the country.
Over all, China will probably be the only major economy to grow in 2020. Germany’s economy, usually regarded as Europe’s strongest, reported a 5 percent contraction in 2020.
Bond yields rose following word of Mr. Biden’s spending plan. Elsewhere, oil prices meandered, with both Brent crude and West Texas Intermediate fluctuating between gains and losses.
Hong Kong Broadband Network said in a statement on Thursday that it had taken steps to block access to a website that featured the personal information of police officers, the first full website censorship under Hong Kong’s expansive national security law.
The site, which featured personal information about the police and pro-establishment figures in the Chinese city, first faced partial blocks in Hong Kong on Jan. 6. A technical analysis by The New York Times showed the territory’s internet service providers appeared to be interfering with access to the site.
Hong Kong Broadband, one of the city’s largest internet service providers, said it cut access to the site on Jan. 13 “in compliance with the requirement issued under the national security law.”
In the past, Hong Kong’s government had a separate process, which included issuing court orders, to go after content deemed illegal online. But the purge of the website happened without any warning or official legal notification, according to Naomi Chan, the 18-year-old high-school student who created the site.
The disruption raises the prospect that Hong Kong, long a bastion of internet freedom on the border with China’s closely censored internet, could fall under the shadow of the mainland’s Great Firewall, which blocks foreign internet sites like Google and Facebook.
Since the national security law was put in place over the summer, the police have turned to harsh digital investigative tactics reminiscent of those used by security forces in China, including hanging cameras outside the doors of politicians and forcing arrestees to give them access to smartphones.
The law was prompted by sometimes violent antigovernment protests in 2019, which alarmed Communist Party leaders in Beijing. The Chinese government has since used the law to tighten its grip on the former British colony, which operates under its own laws and has long enjoyed some degree of autonomy, including freedom of speech.
The French carmaker Renault, saying it does not expect auto sales to bounce back quickly from the pandemic, announced a plan on Thursday to survive and make money while selling fewer cars and shifting emphasis to electric vehicles.
The plan presented by Luca de Meo, who took over as Renault’s chief executive in July, is a sharp departure from the strategy pursued by Carlos Ghosn, the former chief executive of Renault’s alliance with Japanese automakers Nissan and Mitsubishi.
Mr. de Meo implicitly criticized Mr. Ghosn during an online briefing for journalists and analysts on Thursday, saying that Renault had “too many layers, too many silos, too many shared responsibilities. All that mattered were size and volumes.”
Under the new plan, Renault will cut production capacity, reduce the number of models it offers and simplify manufacturing by increasing the number of parts shared among vehicles. For example, all gasoline vehicles will use the same basic engine.
Mr. de Meo said his aim was to avoid job cuts beyond those already planned. The French government is a big shareholder in the company, and has resisted job cuts in the past.
“We are also here to protect the work of people,” Mr. de Meo told reporters during a conference call. “We have so many opportunities to get rid of other costs.”
During a brutal period for the auto industry, Renault was among the hardest hit. The company said Tuesday that sales fell more than 20 percent in 2020, to less than three million vehicles.
“We are not betting on a strong recovery,” Clotilde Delbos, the Renault chief financial officer, said during the presentation. “Cost reduction will be the strongest lever for our improvement.”
Electric cars are among Renault’s few bright spots. Sales of the Zoe, a two-door battery powered hatchback, doubled in 2020 despite the pandemic. The Zoe displaced the Tesla Model 3 as the best-selling electric car in Europe. However, at around 20,000 euros after subsidies, or $24,000, the Zoe costs half as much as the Model 3 and is likely to be less profitable.
Mr. de Meo mentioned Renault’s troubled but essential alliance with Japanese carmakers Nissan and Mitsubishi only in passing. But at the end of the video presentation, Makoto Uchida, the chief executive of Nissan, made an appearance to say that he endorsed the Renault plan.
“I’m happy to see Renault back on the path to profitability,” Mr. Uchida said.
Airlines, workplaces and sports stadiums may soon require people to show their coronavirus vaccination status on their smartphones before they can enter.
A coalition of leading technology companies, health organizations and nonprofit groups — including Microsoft, Oracle, Salesforce, Cerner, Epic Systems and the Mayo Clinic — announced on Thursday morning that they were developing technology standards to enable consumers to obtain and share their immunization records through health passport apps.
“For some period of time, most all of us are going to have to demonstrate either negative Covid-19 testing or an up-to-date vaccination status to go about the normal routines of our lives,” said Dr. Brad Perkins, the chief medical officer at the Commons Project Foundation, a nonprofit organization in Geneva that is a member of the vaccine credential initiative.
That will happen, Dr. Perkins added, “whether it’s getting on an airplane and going to a different country, whether it’s going to work, to school, to the grocery store, to live concerts or sporting events.”
Vaccine passport apps could fill a significant need for airlines, employers and other businesses.
In the United States, the federal government has developed paper cards that remind people who receive coronavirus vaccinations of their vaccine manufacturer, batch number and date of inoculation. But there is no federal system that consumers can use to get easy access to their immunization records online and establish their vaccination status for work or travel.
A few airlines, including United Airlines and JetBlue, are already trying out Common Pass, a health passport app from the Commons Project. The app enables passengers to retrieve their coronavirus test results from their health providers and then gives them a confirmation code allowing them to board certain international flights. The vaccination credentialing system would work similarly.
After giving small lenders a head start, the Paycheck Protection Program will open for all applicants on Tuesday, the Treasury Department said on Wednesday.
The stimulus package passed last month included $284 billion in funding to restart the small-business relief effort, which made $523 billion in loans last year to 5.2 million recipients. The new funding will be available both to first-time applicants and to some returning borrowers.
Borrowers seeking a second loan will need to demonstrate a 25 percent drop in gross receipts between comparable quarters in 2019 and 2020. Second loans will also be limited to companies with 300 or fewer workers, and the amounts will be capped at $2 million.
First- and second-time applicants can borrow up to 2.5 times their monthly payroll. (Those in the lodging and food service business who are seeking a second loan can borrow 3.5 times their payroll, a concession to the devastation those industries have faced.) The loans — which are made by banks but backed by the federal government — can be forgiven if borrowers spend least 60 percent of the money paying workers and use the rest on other allowable expenses.
Starting Tuesday, loans will be available from thousands of lenders, including national banks like Bank of America, JPMorgan Chase and Wells Fargo; most regional banks; and financial technology companies like PayPal.
Some smaller lenders have already gotten started. Community Development Financial Institutions, Minority Depository Institutions and Certified Development Companies — specially designated lenders that focus on underserved populations, including Black- and minority-owned businesses — were allowed to start taking loan applications this week. And on Friday, lenders with $1 billion or less in assets will be allowed to start submitting applications.
The Small Business Administration, which manages the program, has not said how many applications it has already received. Unlike the first round, when the agency approved loans instantaneously, approvals will now take at least a day because of new fraud safeguards the agency has adopted.
Charles Schwab said on Wednesday that it was shutting down its political action committee, perhaps the most significant announcement of its kind since corporations began rethinking their political donations after last week’s violence in the Capitol.
Schwab said it had made its decision “in light of a divided political climate and an increase in attacks on those participating in the political process.”
“We believe a clear and apolitical position is in the best interest of our clients, employees, stockholders and the communities in which we operate,” the company said.
The company’s PAC will no longer take contributions from employees or make financial contributions to lawmakers. It will donate the leftover funds to Boys & Girls Clubs of America and to historically Black colleges and universities, organizations that Charles Schwab has supported in the past.
The company said it stood by its previous political donations, noting that it had “long believed in advocating for an appropriate regulatory landscape for individual investors and those who serve them.” But it said it found the current “hyperpartisan” environment too complex to navigate without risk of distraction.
The Lincoln Project, a group of anti-Trump conservatives, had featured Charles Schwab in a campaign highlighting companies that donated to President Trump or to Republicans in Congress who voted against certifying President-elect Joseph R. Biden Jr.’s victory. Charles Schwab made apparent reference to the campaign in explaining the reasoning behind the shutdown.
“It is a sad byproduct of the current political climate that some now resort to using questionable tactics and misleading claims to attack companies like ours,” the statement said. “We also believe it is unfair to knowingly blur the lines between the actions of a publicly held corporation and those of individuals who work or have worked for the company.”
After the riot at the Capitol, a number of companies, including Goldman Sachs and JPMorgan Chase, paused corporate giving. Others, such as Walmart and Marriott, have said they will halt donations only to the 147 Republicans in Congress who objected to certifying the presidential election result.
Charles Schwab said in its statement that it was confident its “voice will still be heard in Washington” even without a PAC, noting that it is a “major employer in a dozen metropolitan centers.” Other companies that do not have a PAC, like IBM, have said they do not think a lack of one puts them at a political disadvantage.
Brian Brooks, who warned that requiring customers to wear masks during the pandemic could lead to more bank robberies, is stepping down as the country’s top bank regulator, according to an announcement on Wednesday.
Mr. Brooks has served as acting comptroller of the currency since late May. As of Thursday night, Blake Paulson, a career employee of the Office of the Comptroller of the Currency, will take over.
“It has been an honor to serve the United States as acting comptroller,” Mr. Brooks said in a statement. “I am extremely proud of what we have accomplished.”
In the months after he took over the agency following the departure of Joseph Otting, Mr. Brooks rushed to enact a number of changes, including one that would prohibit banks from cutting off credit to the fossil fuel industry and another establishing guidelines for how banks could measure their activities in low-income and minority neighborhoods as required under an anti-redlining law.
Until recently, Mr. Brooks was in line for his job to be made permanent. Despite having already lost the 2020 election, President Trump said on Nov. 17 that he intended to nominate Mr. Brooks to become the comptroller for a five-year term.
But the chances for Mr. Brooks to be confirmed during the lame-duck period of Mr. Trump’s presidency were low, and the Georgia runoff elections have given Democrats control of both chambers of Congress.
Advisers to President-elect Joseph R. Biden Jr. had already begun vetting candidates to replace him after Mr. Biden takes over next week.
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.