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| UK economy in 'unprecedented downturn' as activity keeps falling - business live | UK economy in 'unprecedented downturn' as activity keeps falling - business live |
| (30 minutes later) | |
| Rolling coverage of the latest economic and financial news | Rolling coverage of the latest economic and financial news |
| The initial claims figures, although bad, don’t capture the full extent of the jobs lost in the crisis. | |
| Another 2.2 million new claims were filed through the federal government’s temporary Pandemic Unemployment Assistance program. It’s designed to help gig economy workers, independent contractors and other self-employed workers, who might not be able file traditional jobless claims. | |
| Wall Street is unperturbed by today’s US jobless numbers. | |
| The Dow has gained 57 points or 0.2% in early trading to 24,633 points, despite traders learning that another 2.4m Americans are now on the dole. | |
| The S&P 500 is also slightly higher, having recovered a large chunk of its hefty fall in March. | |
| In London, the FTSE 100 has shaken off its earlier losses and is up 17 points at 6084. Top risers include Rolls-Royce (+6%) after announcing 9,000 job losses yesterday, and AstraZeneca, which says it can manufacture 1bn doses of the University of Oxford’s potential Covid-19 vaccine. | |
| Back in the UK, workers at Royal Bank of Scotland are preparing to work from home for a while yet. | Back in the UK, workers at Royal Bank of Scotland are preparing to work from home for a while yet. |
| RBS told staff today that more than 50,00 of them (out of 65,000) won’t return to the office until at least the end of September. | RBS told staff today that more than 50,00 of them (out of 65,000) won’t return to the office until at least the end of September. |
| However, about 400 workers whose jobs include handling sensitive data have been asked to return to offices and call centres next month. | However, about 400 workers whose jobs include handling sensitive data have been asked to return to offices and call centres next month. |
| More here: | More here: |
| Several economists are concerned that America’s jobless claims haven’t levelled out faster: | Several economists are concerned that America’s jobless claims haven’t levelled out faster: |
| America has just passed a grim milestone in its unemployment crisis. | America has just passed a grim milestone in its unemployment crisis. |
| Glassdoor senior economist Daniel Zhao has spotted that more jobs have been lost in the last nine weeks than during the last recession a decade ago: | Glassdoor senior economist Daniel Zhao has spotted that more jobs have been lost in the last nine weeks than during the last recession a decade ago: |
| Before Covid-19, the idea of more than two million Americans losing their jobs in a single week would be unimaginable, let alone 38 million joining the unemployment ranks in two months. | Before Covid-19, the idea of more than two million Americans losing their jobs in a single week would be unimaginable, let alone 38 million joining the unemployment ranks in two months. |
| As this tweet shows, the job losses since March absolutely dwarf the impact of the financial crisis - wiping out all the gains since then. | As this tweet shows, the job losses since March absolutely dwarf the impact of the financial crisis - wiping out all the gains since then. |
| Newsflash: Another 2.4 million Americans filed new claims for unemployment benefit last week, as the US jobs crisis deepens. | Newsflash: Another 2.4 million Americans filed new claims for unemployment benefit last week, as the US jobs crisis deepens. |
| That’s down from 2.6 million in the previous seven days (which has been revised down from 2.9m). | That’s down from 2.6 million in the previous seven days (which has been revised down from 2.9m). |
| But it’s the ninth week in a row in which millions of US citizens signed on for welfare benefits, having lost their job in the lockdown. | But it’s the ninth week in a row in which millions of US citizens signed on for welfare benefits, having lost their job in the lockdown. |
| The total number of initial claims filed since mid-March is now over 38 million, or over a fifth of the US labor force. | The total number of initial claims filed since mid-March is now over 38 million, or over a fifth of the US labor force. |
| The number of continued claims (for workers who were already on the jobless total) also jumped again to over 25m, from 22.5m. | The number of continued claims (for workers who were already on the jobless total) also jumped again to over 25m, from 22.5m. |
| Oof! US department store Macy’s has warned that its sales have fallen by around 45% in the last quarter, as the coronavirus shutdown drove it into the red. | Oof! US department store Macy’s has warned that its sales have fallen by around 45% in the last quarter, as the coronavirus shutdown drove it into the red. |
| Preliminary results show that sales at Macy’s in February-April fell to between $3,000m and $3,030m, down from $5,504. It made an operating loss of around $1.1bn, down from an operating profit of $203m a year earlier. | Preliminary results show that sales at Macy’s in February-April fell to between $3,000m and $3,030m, down from $5,504. It made an operating loss of around $1.1bn, down from an operating profit of $203m a year earlier. |
| The company shut all its stores - including department chain Bloomingdale’s and beauty chain Bluemercury - on 18 March, leading to a slump in takings. | The company shut all its stores - including department chain Bloomingdale’s and beauty chain Bluemercury - on 18 March, leading to a slump in takings. |
| “This is a challenging time for the country, for retail and for Macy’s, Inc. COVID-19 has impacted the lives of many of our colleagues and customers, and health and safety remain our top priority. We closed all of our stores - Macy’s, Bloomingdale’s and Bluemercury - on March 18, which had a significant impact on our first quarter results,” said | “This is a challenging time for the country, for retail and for Macy’s, Inc. COVID-19 has impacted the lives of many of our colleagues and customers, and health and safety remain our top priority. We closed all of our stores - Macy’s, Bloomingdale’s and Bluemercury - on March 18, which had a significant impact on our first quarter results,” said |
| Jeff Gennette, chairman and chief executive officer, said it is a challenging time for the country, for retail and for Macy’s itself. | Jeff Gennette, chairman and chief executive officer, said it is a challenging time for the country, for retail and for Macy’s itself. |
| This morning’s PMI reports from the UK and the eurozone haven’t lifted spirits in the markets. | This morning’s PMI reports from the UK and the eurozone haven’t lifted spirits in the markets. |
| The FTSE 100 is still down 0.8% at 6018 points, a loss of 48 points so far, after the City heard that UK manufacturers and services companies were having such a rough time. | The FTSE 100 is still down 0.8% at 6018 points, a loss of 48 points so far, after the City heard that UK manufacturers and services companies were having such a rough time. |
| Wall Street is expected to open lower, with the Dow down 145 points (roughly 0.6%) in pre-market trading and traders nudging the safe-haven dollar a little higher. | Wall Street is expected to open lower, with the Dow down 145 points (roughly 0.6%) in pre-market trading and traders nudging the safe-haven dollar a little higher. |
| Here’s our news story on today’s UK PMI report: | Here’s our news story on today’s UK PMI report: |
| Newsflash: UK manufacturing output has fallen over the last quarter at the fastest rate since at least 1975. | Newsflash: UK manufacturing output has fallen over the last quarter at the fastest rate since at least 1975. |
| Output volumes fell in 15 of 17 manufacturing sub-sectors in March-May, according to the latest healthcheck from the CBI. | Output volumes fell in 15 of 17 manufacturing sub-sectors in March-May, according to the latest healthcheck from the CBI. |
| Motor vehicles and transport equipment, and food, drink and tobacco, suffered the sharpest tumbles. while pharmaceuticals and electronic engineering output rose. | Motor vehicles and transport equipment, and food, drink and tobacco, suffered the sharpest tumbles. while pharmaceuticals and electronic engineering output rose. |
| This pulled down the CBI’s measure of output volumes in the last quarter to -54%, from -21% in April (the balance between firms reporting higher output vs lower). | This pulled down the CBI’s measure of output volumes in the last quarter to -54%, from -21% in April (the balance between firms reporting higher output vs lower). |
| This isn’t a massive surprise, given the widespread shutdowns across UK factories to fight the Covid-19 pandemic. | This isn’t a massive surprise, given the widespread shutdowns across UK factories to fight the Covid-19 pandemic. |
| But worryingly, manufacturers predict that output volumes will keep falling over the next three months, with many reporting that their order books have shrunk alarmingly. | But worryingly, manufacturers predict that output volumes will keep falling over the next three months, with many reporting that their order books have shrunk alarmingly. |
| The survey also found that: | The survey also found that: |
| 84% of respondents had seen a negative impact on their domestic output. | 84% of respondents had seen a negative impact on their domestic output. |
| 68% of manufacturers reported a negative impact on their international output. | 68% of manufacturers reported a negative impact on their international output. |
| 51% of manufacturers reported a partial shutdown/closure. | 51% of manufacturers reported a partial shutdown/closure. |
| 59% of manufacturers mentioned that they had temporarily laid off staff, while 9% reported permanent layoffs. | 59% of manufacturers mentioned that they had temporarily laid off staff, while 9% reported permanent layoffs. |
| 74% of firms had faced cash flow difficulties. | 74% of firms had faced cash flow difficulties. |
| Anna Leach, CBI deputy chief economist, says UK manufacturing faces a “challenging” future: | Anna Leach, CBI deputy chief economist, says UK manufacturing faces a “challenging” future: |
| Duncan Brock, Group Director at CIPS, fears that a second wave of Covid-19 infections could undermine hopes of a recovery (sending the PMI skittering back down to April’s record lows). | Duncan Brock, Group Director at CIPS, fears that a second wave of Covid-19 infections could undermine hopes of a recovery (sending the PMI skittering back down to April’s record lows). |
| Here’s Andrew Wishart of Capital Economics on today’s UK purchasing managers survey: | Here’s Andrew Wishart of Capital Economics on today’s UK purchasing managers survey: |
| A few weeks ago, there was lots of talk about V-shaped recoveries. | A few weeks ago, there was lots of talk about V-shaped recoveries. |
| Economists hoped that growth would bounce back sharply from the initial shock of Covid-19, as companies rapidly caught up on lost business. | Economists hoped that growth would bounce back sharply from the initial shock of Covid-19, as companies rapidly caught up on lost business. |
| It always seemed a little optimistic -- no-one is going to get two haircuts, order three restaurant specials or watch four football matches in a day once the crisis is over (but lets not rule out two specials....) | It always seemed a little optimistic -- no-one is going to get two haircuts, order three restaurant specials or watch four football matches in a day once the crisis is over (but lets not rule out two specials....) |
| The message from today’s PMI surveys is clear -- businesses across the eurozone and UK have suffered major damage under the lockdown, and the downturn is not over. | The message from today’s PMI surveys is clear -- businesses across the eurozone and UK have suffered major damage under the lockdown, and the downturn is not over. |
| Neil Birrell, Chief Investment Officer at Premier Miton, says the recovery is some way away: | Neil Birrell, Chief Investment Officer at Premier Miton, says the recovery is some way away: |
| James Smith and Bert Colijn of ING agree that the recovery certainly won’t resemble a perky V. | James Smith and Bert Colijn of ING agree that the recovery certainly won’t resemble a perky V. |
| CBI chief economist Alpesh Paleja agrees that May is a ‘pretty awful’ month for businesses: | CBI chief economist Alpesh Paleja agrees that May is a ‘pretty awful’ month for businesses: |