Jobless claims reach 38.6 million in nine weeks.
Even as restrictions on businesses began lifting across the United States, another 2.4 million workers filed for jobless benefits last week, the government reported Thursday, bringing the total of new claims to more than 38 million in nine weeks.
“The hemorrhaging has continued,” Torsten Slok, chief economist for Deutsche Bank Securities, said of the mounting job losses. He expects the official jobless rate for May to approach 20 percent, up from the 14.7 percent reported by the Labor Department for April.
A recent household survey from the Census Bureau suggests that the pain is widespread: 47 percent of adults said they or a member of their household had lost employment income since mid-March. Nearly 40 percent expected the loss to continue over the next four weeks.
And there is increasing concern that many jobs are not coming back, even for those who consider themselves laid off temporarily.
Nicholas Bloom, a Stanford University economist who is a co-author of an analysis of the pandemic’s effects on the labor market, estimates that 42 percent of recent layoffs will result in permanent job losses. “I hate to say it, but this is going to take longer and look grimmer than we thought,” he said of the path to recovery.
The Atlantic lays off 17 percent of its staff.
The Atlantic will lay off 68 workers across “events, sales, and editorial,” said David G. Bradley, the chairman of Atlantic Media, in a staff email on Thursday, as the publication struggles with the same forces — mostly a drop in digital advertising — that have affected tens of thousands of jobs in news media during the coronavirus crisis even as it has experienced a sharp rise in subscribers.
Those laid off represent 17 percent of the total staff, The Atlantic said in a statement. Executives will have their pay cut, and there will be general pay freezes.
A long-term strategic pivot to a business model that relies predominantly on reader revenue, Mr. Bradley said, “is accelerated — and made necessary — by the overnight and near-complete undoing of in-person events and, for now, a bracing decline in advertising.”
The Atlantic instituted an online paywall last year, and has since added 160,000 new subscribers, Mr. Bradley said. More than 90,000 of those have been added since March. The magazine, which is 163 years old and was once edited by Ralph Waldo Emerson, has drawn widespread praise for its coverage of the pandemic.
Three years ago, Mr. Bradley sold a majority stake in Atlantic Media to Emerson Collective, the organization founded by the billionaire Laurene Powell Jobs.
Macy’s, one of the biggest department store operators in the United States, reported preliminary first-quarter net sales of roughly $3 billion, a 45 percent drop from the same period last year, and an operating loss of as much as $1.1 billion. The company shared the figures on Thursday ahead of a full release of its first-quarter results on July 1.
The company, which also owns Bloomingdale’s and Bluemercury, said that March was “very tough” but that its digital business exceeded expectations in April.
Macy’s, which has announced an ambitious plan to reopen all of its 775 stores by the end of June, said on Thursday that its plan was on track, and that it had already opened 190 Macy’s and Bloomingdale’s locations. It anticipated opening 80 more Macy’s stores before this weekend.
While Macy’s initially expected as little as 15 percent of its typical business in reopened stores, “it’s coming in stronger than that,” said Jeff Gennette, the company’s chief executive, during a presentation on Thursday. The business is down about 50 percent in reopened stores, and improves with each week the store is open, he said.
Mr. Gennette added that outside of digital sales, it has found new success with curbside pickup, and has been working with New York City to implement the service at its flagship store in Herald Square in coming weeks. “We expect a gradual recovery, but we are encouraged by these early results,” he said.
Macy’s plans to offer another business update on June 9 before it formally reports first-quarter results.
Stocks on Wall Street were unchanged and European markets were lower on Thursday as investors remained cautious despite some new data that painted a slightly brighter picture for the economy.
The S&P 500 was flat in early trading, after a nearly 2 percent gain the day before. Major European markets fell slightly, following a lower day in Asian markets.
Investors were considering the latest figures on jobless claims from the U.S. Labor Department, which showed that the surge of layoffs had reached more than 38 million in nine weeks.
But economic data from Europe provided more optimism. A monthly flood of European purchasing managers’ index reports showed business activity slowly picking up: The euro-area manufacturing index came in at 39.5 points, higher than expected and up from 33.4 last month, while the services index rose to 28.7, from 12.0 last month.
The numbers for Britain also showed an upswing: The manufacturing index reached 40.6, up from 32.6 past month, and the services sector reached 27.8, up from 13.4.
The reports, based on surveys of executives and released by the analysis firm IHS Markit, still show business activity far below normal, said Chris Williamson, chief business economist at the company.
“The eurozone saw a further collapse of business activity in May, but the survey data at least brought reassuring signs that the downturn likely bottomed out in April,” he said.
In Asia, monthly trade figures in Japan showed a nearly 22 percent fall from a year ago, underscoring the weakness of demand for the goods that the country’s factories make. Heated rhetoric in Washington against China raised the prospect that relations between the world’s two biggest economies would deteriorate further. Investors also worried about worsening tensions between China and Australia, a country that depends on Chinese demand to fuel big parts of its economy.
In other markets, prices for U.S. Treasury bonds rose — a sign of negative market sentiment — as wary investors like to park their money in American debt.
And oil continued its rally, amid signs that major producing countries were sticking with plans to curb output. West Texas Intermediate, the U.S. crude benchmark, was up more than 2 percent to over $34 a barrel.
One of China’s biggest and most established banks made the investment seem like a sure bet: Buying barrels of crude oil would make investors money whether the price rises or falls, the bank said.
That was not exactly true. When global oil prices crashed last month in the middle of the coronavirus crisis, those who had bought the investment product, called Crude Oil Treasure, lost their money and then some. Because of a quirk in global oil markets, Bank of China said, investors owed the lender even more money, specifically $37.63 for every barrel they had bought.
The outrage that followed has exposed the plight of small investors in the world’s second-largest economy. They have few safe places to park their money. They enjoy limited legal protections compared with investors in other countries. And when they protest, they are often silenced by the authorities.
Chen Xueming, an investor in Crude Oil Treasure who has a son about to head to college, said, “This product completely exceeded what we can bear.”
Mr. Chen bought over $6,000 worth of futures tied to 216 barrels through a Bank of China smartphone app. After oil crashed, he owed nearly $12,700.
New economic data from Japan on Thursday showed the depth of the slump in global demand, a further bleak sign for a country that depends on exports for much of its growth.
Japan’s exports as measured by value slumped by more than a fifth in April compared with a year earlier, the nation’s Finance Ministry reported. The slump was broad, with shipments to both the United States and Europe down by roughly one-third.
The drop was widely in line with economists’ estimates, according to surveys by Bloomberg and Reuters. But it was still the largest since 2009, when the world was grappling with the financial crisis.
Japan never went as far as other countries that locked down their economies to stop the spread of the coronavirus. But its economy has nevertheless been hit hard by the pandemic, as well as by a typhoon late last year and a badly timed tax increase on consumers. On Monday, Japanese officials said the country’s gross domestic product shrank for the second straight quarter, making it the largest economy to fall into recession thus far amid the outbreak.
The rest of the world’s troubles are also weighing on Japan’s fortunes. The country is a major exporter of finished manufactured goods as well as key components, including the cameras in smartphones, sensors, high-end circuits and precision steel. As stores and factories remain closed around the world, exports will remain a weak spot for the world’s third-largest economy.
Trade data offered one partial bright spot: Japan’s exports to China, its largest trading partner, fell only about 4 percent. Still, it underscores how much Japan will depend on China’s own recovery from the outbreak.
A week before Britain came to a standstill in mid-March, the Wessex Mill found itself fielding nearly 600 calls a day requesting one of the country’s hottest commodities: flour.
The mill in Oxfordshire has produced nearly 13,000 small bags of flour each day during the coronavirus pandemic, a fourfold increase. Demand led Emily Munsey, a miller who runs the business with her father, to hire more staff and to add afternoon and night shifts to keep the mill running 24 hours a day, seven days a week, for the first time in its 125-year history.
“It’s been very challenging as a company. The amount of work we’ve all had to do has increased a huge amount,” said Ms. Munsey, who has since scaled back to five days a week, though still around the clock, to give employees a weekend break. “Demand remains consistently obscene.”
Commercial mills produce nearly four million tons of flour each year in Britain, according to the National Association of British and Irish Flour Millers. With much of the country stuck at home, baking has surged, and retail-size flour bags have become scarce on grocery shelves.
“We’re an artisan flour mill,” said Ms. Munsey, whose customers include wholesalers and bakeries across Britain that order up to 10 tons of flour a week. “We’re not someone who has previously produced vast quantities of flour, and now people just want lots and lots and lots of flour.”
It was late March, with the coronavirus starting to peak in New York and hospitals already running short on supplies, when Bethenny Frankel, the entrepreneur and reality television star, received an email from a publicist offering her access to 500 million medical masks.
Ms. Frankel was intrigued. While spending eight seasons on the “Real Housewives of New York City,” she began flying to places like Guatemala and the Bahamas to aid in disaster relief. Now, with the disaster down the road, she wanted to help. She called the New York governor’s office, and her home state drafted her to find masks.
So began Ms. Frankel’s journey into the market for masks, a sort of high-stakes house of mirrors, where lives and millions of dollars were on the line and things were rarely what they seemed.
Ms. Frankel’s path through the mess, the characters she encountered and the fact that states relied upon a Real Housewife to find lifesaving medical gear all reflected the feeble preparations of government and industry and the opportunism that often follows disaster.
Catch up: Here’s what else is happening.
L Brands, the owner of Victoria’s Secret and Bath & Body Works, posted a first-quarter net loss of nearly $300 million on Wednesday and said that net sales fell 37 percent in the quarter, to $1.65 billion. Sales at Victoria’s Secret fell by almost half, while Bath & Body Works was slightly better with an 18 percent decline, even though most of the company’s stores have been closed since March 17. The company, which recently scuttled a deal to sell Victoria’s Secret to a private equity firm, will hold its earnings call on Thursday morning.
Reporting was contributed by Geneva Abdul, Jack Nicas, Patricia Cohen, Marc Tracy, Mohammed Hadi, Sapna Maheshwari, Alexandra Stevenson, Cao Li, Carlos Tejada, Katie Robertson, Daniel Victor and Kevin Granville.