This article is from the source 'nytimes' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.

You can find the current article at its original source at https://www.nytimes.com/2020/06/05/business/jobs-report-stock-market-coronavirus.html

The article has changed 29 times. There is an RSS feed of changes available.

Version 2 Version 3
Unemployment in U.S. May Approach 20 Percent: Live Updates Unemployment in U.S. Unexpectedly Fell in May: Live Updates
(about 1 hour later)
The U.S. government’s employment survey for May will be released at 8:30 a.m. Eastern time. The job losses are expected to be far less than those in April — but that is small consolation. The unemployment rate fell to 13.3 percent in May, the Labor Department said Friday, an unexpected improvement in the nation’s job market as hiring rebounded faster than economists expected.
Economists surveyed by FactSet expect the report to show that employers cut 8.5 million jobs in May, down from more than 20 million in April, and that the unemployment rate hit 19.8 percent, the highest level since the Great Depression. Economists had forecast the unemployment rate to increase to as much as 20 percent, after it hit 14.7 percent in April, which was the highest since the government began keeping official statistics after World War II.
Many economists expect that May will be the nadir for the job market, and that unemployment will begin to ease as states reopen and businesses call employees back to work. But it will take far longer for the economy to climb out of the hole than it did to fall into it. But the unemployment rate dipped instead, with employers adding 2.5 million jobs, after more than 20 million jobs were lost in April.
Perhaps the most troubling sign for the recovery is evidence that job losses have spread beyond travel, hospitality and other sectors that were directly affected by the pandemic. “These improvements in the labor market reflected a limited resumption of economic activity that had been curtailed in March and April,” the Labor Department said in its release.
“In some ways, those jobs that were working from home were protected from the initial bomb that went off,” said Andrew Challenger, senior vice president at Challenger Gray & Christmas, an outsourcing firm that tracks layoffs. “We’ve really seen over the last five to six weeks that those jobs are now on the chopping block.” The report noted that “employment rose sharply in leisure and hospitality, construction, education and health services, and retail trade,” even as jobs in the government continued their decline.
Wall Street was set to rally on Friday, as stocks around the world rose on hopes that government support would support an economic recovery, despite expectations of grim employment data from the United States. Specifically, the leisure and hospitality sector hired about 1.2 million workers, after declining by 7.5 million in April and 743,000 in March. Restaurant jobs alone rose by 1.4 million, counting for about half of the total gain in employment, the Labor Department said.
U.S. stock futures indicated an increase at the open and European stocks were 1 to 2 percent higher. Prices for U.S. Treasury bonds were lower, in another sign of improved market sentiment. “What this is telling us is that at least part of the pain in April was due to people being laid off or furloughed who still had very strong connections to their employers,” Ernie Tedeschi, an economist at Evercore ISI in Washington said. “As good and surprising as this report was, this may just be the low-hanging fruit. These may have been the easiest workers to bring back.”
Stocks in the United States fell Thursday, after the U.S. government said the overall number of workers on state jobless rolls had increased last week. More bad news is expected to come later on Friday, when U.S. government releases its employment survey for May. The unemployment rate is expected to spike to 20 percent. President Trump exulted in the surprisingly positive monthly jobs report released on Friday morning, taking to Twitter to claim credit for the improvement and attack his presumptive Democratic opponent on the economy.
But investors on Friday reacted to signs around the world that businesses were slowly but steadily returning to normal, as well as renewed efforts by the European Central Bank to bolster the region’s economy. The report showed the economy added 2.5 million jobs in May and the unemployment rate fell to 13.3 percent, signs that the labor market has begun to rebound from its lows of the coronavirus recession.
In the United States, the nation’s largest airlines are preparing for a pickup in business. American Airlines, Delta Air Lines and United Airlines said this week they would operate more flights in July to U.S. cities considered popular summer vacation spots. The stock prices of the carriers are all sharply higher this week. Mr. Trump claimed credit: “Really Big Jobs Report. Great going President Trump (kidding but true)!” he wrote on Twitter.
Investors also looked positively on reports that the trade war truce between the United States and China was holding, despite worsening tensions between Washington and Beijing. He announced a 10 a.m. news conference to discuss the numbers, then tweeted the comments of several television commentators who expressed surprise and delight at the jobs report. He later took a shot at his Democratic opponent, former Vice President Joseph R. Biden Jr.
“Oh no, the Dems are worried again,” Mr. Trump wrote. “The only one that can kill this comeback is Sleepy Joe Biden!”
Stocks on Wall Street were poised to rise on Friday, picking up a rally that has lifted the S&P 500 to within 10 percent of its record high as the U.S. government reported a surprising uptick in hiring in May.
Futures indicated that stocks would jump at the start of trading, and shares in Europe were 1 percent to 2 percent higher.
Financial markets have been on an upward trajectory for weeks, as investors have responded to signs around the world that businesses were slowly but steadily returning to normal. In Europe, shares have been boosted by renewed efforts by policymakers to bolster the region’s economy.
Shares were already higher before the government reported an unexpected round of hiring in May, but the news boosted stocks further.
Oil prices rose on Friday on expectations that the Organization of the Petroleum Exporting Countries, Russia and other producers will agree on Saturday to extend their production cuts by an additional month through July. These countries originally agreed on April 12 to trim production by a combined 9.7 million barrels a day or about 10 percent of global supplies in normal times. Production was supposed to begin rising gradually after June.Oil prices rose on Friday on expectations that the Organization of the Petroleum Exporting Countries, Russia and other producers will agree on Saturday to extend their production cuts by an additional month through July. These countries originally agreed on April 12 to trim production by a combined 9.7 million barrels a day or about 10 percent of global supplies in normal times. Production was supposed to begin rising gradually after June.
The producers are expected to meet by videoconference Saturday to agree on the extension and other matters, analysts said. OPEC has not yet confirmed that the meeting will occur.The producers are expected to meet by videoconference Saturday to agree on the extension and other matters, analysts said. OPEC has not yet confirmed that the meeting will occur.
Analysts say that extending the cuts could put further upward lift on oil prices, which have already risen sharply from their April plunge. On Friday, Brent crude, the international benchmark, was up about 3 percent to $41.22 a barrel while West Texas Intermediate, the key American crude, was up about 2 percent.Analysts say that extending the cuts could put further upward lift on oil prices, which have already risen sharply from their April plunge. On Friday, Brent crude, the international benchmark, was up about 3 percent to $41.22 a barrel while West Texas Intermediate, the key American crude, was up about 2 percent.
In late March, Brooks Brothers was showered with praise after announcing it would use its three clothing factories in the United States to make personal protective equipment to help fight the coronavirus.In late March, Brooks Brothers was showered with praise after announcing it would use its three clothing factories in the United States to make personal protective equipment to help fight the coronavirus.
Now those factories may become casualties of the coronavirus, and the future of Brooks Brothers — not to mention its identity as the ultimate “Made in America” brand, one that has dressed presidents and former presidents dating to James Madison — is uncertain.Now those factories may become casualties of the coronavirus, and the future of Brooks Brothers — not to mention its identity as the ultimate “Made in America” brand, one that has dressed presidents and former presidents dating to James Madison — is uncertain.
Brooks Brothers plans to lay off nearly 700 employees this summer at the factories, in Massachusetts, New York and North Carolina. The company is also trying to find buyers for the factories by mid-July, and expects to close them if it can’t.Brooks Brothers plans to lay off nearly 700 employees this summer at the factories, in Massachusetts, New York and North Carolina. The company is also trying to find buyers for the factories by mid-July, and expects to close them if it can’t.
In an interview, Claudio Del Vecchio, the 63-year-old Italian industrialist who bought Brooks Brothers in 2001 and was responsible for acquiring the factory in Massachusetts, spoke for the first time about the decision to divest from the vertical made-in-America supply chain.In an interview, Claudio Del Vecchio, the 63-year-old Italian industrialist who bought Brooks Brothers in 2001 and was responsible for acquiring the factory in Massachusetts, spoke for the first time about the decision to divest from the vertical made-in-America supply chain.
“I feel very bad about this,” Mr. Del Vecchio said. But he added, “The factories never made money for us, and at this moment all resources need to be maintained and saved to make sure we can come out on the other side of the crisis.”“I feel very bad about this,” Mr. Del Vecchio said. But he added, “The factories never made money for us, and at this moment all resources need to be maintained and saved to make sure we can come out on the other side of the crisis.”
Faced with plunging sales that have already led to tens of millions of layoffs, companies are trying to renegotiate their office and retail leases — and in some cases refusing to pay — in hopes of lowering their overhead and surviving the worst economic downturn since the Great Depression. This has given rise to fierce negotiations with building owners, who are trying to hold the line on rents for fear that rising vacancies and falling revenue could threaten their own survival.Faced with plunging sales that have already led to tens of millions of layoffs, companies are trying to renegotiate their office and retail leases — and in some cases refusing to pay — in hopes of lowering their overhead and surviving the worst economic downturn since the Great Depression. This has given rise to fierce negotiations with building owners, who are trying to hold the line on rents for fear that rising vacancies and falling revenue could threaten their own survival.
Simon Property Group, the biggest mall operator in the United States, this week sued Gap, the owner of retail chains that include Old Navy and Banana Republic, for nearly $66 million in unpaid rent for April, May and June, according to a lawsuit filed in Delaware this week.Simon Property Group, the biggest mall operator in the United States, this week sued Gap, the owner of retail chains that include Old Navy and Banana Republic, for nearly $66 million in unpaid rent for April, May and June, according to a lawsuit filed in Delaware this week.
In many cases, the strongest tenants — those most able to pay — are driving the hardest for a discount. They include brand-name companies like LVMH, the luxury goods conglomerate that owns Sephora and other outlets; and Starbucks, which had $2.6 billion of cash on hand at the end of March and would have little problem selling stock or bonds to raise more money.In many cases, the strongest tenants — those most able to pay — are driving the hardest for a discount. They include brand-name companies like LVMH, the luxury goods conglomerate that owns Sephora and other outlets; and Starbucks, which had $2.6 billion of cash on hand at the end of March and would have little problem selling stock or bonds to raise more money.
Beyond the immediate impact of business closings on tenants’ revenue are larger questions, including the already-dire trends for malls and shopping centers, how office and consumer behavior might change after the pandemic, and the effects of recent looting and vandalism on retail corridors. Will companies need more space so that employees can spread out, or will they need less because they need fewer offices at all?Beyond the immediate impact of business closings on tenants’ revenue are larger questions, including the already-dire trends for malls and shopping centers, how office and consumer behavior might change after the pandemic, and the effects of recent looting and vandalism on retail corridors. Will companies need more space so that employees can spread out, or will they need less because they need fewer offices at all?
Gap, one of the biggest U.S. retailers with its namesake, Old Navy and Banana Republic chains, said on Thursday that net sales in the first quarter plummeted 43 percent to $2.1 billion and that it posted a net loss of $932 million, as it struggled with store closures because of the pandemic.
The company, which has nearly 2,800 stores in North America, said that it had reopened more than 1,500 locations and expected the “vast majority” of stores to be open by the end of June. The retailer saw major drops across most of its brands, but net sales declined only 8 percent at Athleta as customers flocked to athleisure. Casualwear was popular across brands as shoppers worked from home, the company said. That trend, however, hurt Banana Republic.
Gap said on an earnings call on Thursday that its reopened stores are operating at nearly 70 percent of their performance last year, with particular strength at Old Navy, which is “advantaged” with off-mall locations. It was also upbeat about a new collection called Gap Teen, which was introduced during the quarter and emphasizes sustainability.
Simon Property Group, the biggest mall operator in the United States, is suing Gap, the owner of retail chains including Old Navy and Banana Republic, for about $66 million in unpaid rent for April, May and June, according to a lawsuit filed in Delaware this week.
Simon Property said that it notified Gap in writing that the retail conglomerate had failed to pay $48.2 million in rent and other charges as of May 5, but that the company still had not made the payments as of Tuesday. Gap, one of the biggest specialty store operators in the world, also owns Intermix, Athleta and outlet stores.
The retailer said on the call that it was in active negotiations with landlords.
Sonia Syngal, Gap’s chief executive since March, started the call by acknowledging the protests across the country and noted that the company has the chance ”to create a world that is more inclusive.” She noted that 20 of its stores sustained “extensive damage” as part of the protests.
Raytheon Technologies, one of the country’s biggest defense contractors, recently cut salaries for thousands of employees as the pandemic crimped business. Around the same time, it also quietly made a change to the pay package of its chief executive, Gregory J. Hayes, that could increase his future income by millions of dollars.Raytheon Technologies, one of the country’s biggest defense contractors, recently cut salaries for thousands of employees as the pandemic crimped business. Around the same time, it also quietly made a change to the pay package of its chief executive, Gregory J. Hayes, that could increase his future income by millions of dollars.
Last Friday, after the market closed, Raytheon disclosed in a filing that it had tweaked how it calculates certain stock-related payouts owed to senior executives and employees. The filing did not state by how much Mr. Hayes or others stood to benefit.Last Friday, after the market closed, Raytheon disclosed in a filing that it had tweaked how it calculates certain stock-related payouts owed to senior executives and employees. The filing did not state by how much Mr. Hayes or others stood to benefit.
The change led to an estimated $12.5 million gain for Mr. Hayes on his recent equity awards, Raytheon later told The New York Times. The company said the change was necessary to ensure that Mr. Hayes and 3,900 employees — about 2 percent of its work force — did not lose compensation they had already been awarded.The change led to an estimated $12.5 million gain for Mr. Hayes on his recent equity awards, Raytheon later told The New York Times. The company said the change was necessary to ensure that Mr. Hayes and 3,900 employees — about 2 percent of its work force — did not lose compensation they had already been awarded.
But some analysts said the change undermined Raytheon’s commitment to use pay to keep executives’ interests in line with those of shareholders. Publicly traded companies have come under pressure to structure stock-related compensation in a way that creates incentives for executives to improve long-term performance and not just seek to enrich themselves in the short term.But some analysts said the change undermined Raytheon’s commitment to use pay to keep executives’ interests in line with those of shareholders. Publicly traded companies have come under pressure to structure stock-related compensation in a way that creates incentives for executives to improve long-term performance and not just seek to enrich themselves in the short term.
Gap, one of the biggest U.S. retailers with its namesake, Old Navy and Banana Republic chains, said on Thursday that net sales in the first quarter plummeted 43 percent to $2.1 billion and that it posted a net loss of $932 million. The company, which has nearly 2,800 stores in North America, said that it had reopened more than 1,500 locations and expected the “vast majority” of stores to be open by the end of June.
Slack, the business communication platform, said in a regulatory filing that its first-quarter revenue rose 50 percent to $201.7 million from the same period last year. The chat service reported a loss of 2 cents per share in the quarter, which ended April 30, an improvement over a loss of 23 cents a share in first quarter of 2019. But the results disappointed investors, who expected greater growth during the pandemic, and its shares plunged 15 percent in after-hours trading.Slack, the business communication platform, said in a regulatory filing that its first-quarter revenue rose 50 percent to $201.7 million from the same period last year. The chat service reported a loss of 2 cents per share in the quarter, which ended April 30, an improvement over a loss of 23 cents a share in first quarter of 2019. But the results disappointed investors, who expected greater growth during the pandemic, and its shares plunged 15 percent in after-hours trading.
Reporting was contributed by Conor Dougherty, Peter Eavis, Ben Casselman, Anupreeta Das, Peter Eavis, Vanessa Friedman, Mohammed Hadi, Sapna Maheshwari, Gregory Schmidt, Carlos Tejada and Kevin Granville.Reporting was contributed by Conor Dougherty, Peter Eavis, Ben Casselman, Anupreeta Das, Peter Eavis, Vanessa Friedman, Mohammed Hadi, Sapna Maheshwari, Gregory Schmidt, Carlos Tejada and Kevin Granville.