Applications for jobless benefits remained high last week, even as the collapse of stimulus talks in Washington raised fears of a new wave of layoffs.
More than 804,000 Americans filed new claims for state unemployment benefits last week, the Labor Department said Thursday. That is up from 799,000 in the previous week, before accounting for seasonal patterns. Another 464,000 people applied for benefits under the federal Pandemic Unemployment Assistance program, which covers freelancers, self-employed workers and others left out of the regular unemployment system.
For the second week in a row, the reported number will carry a Golden State-size asterisk: California last month announced that it would temporarily stop accepting new unemployment applications while it addresses a huge processing backlog and puts in place procedures to weed out fraud.
In the absence of up-to-date data, the Labor Department is assuming California’s claim number was unchanged from its pre-shutdown figure of more than 225,000 applications, or more than a quarter of the national total. The state began accepting new filings this week, and is expected to resume reporting data in time for next week’s report, though it isn’t yet clear how the backlog of claims filed this week will be reflected.
While the lack of data from California makes week-to-week comparisons difficult, the larger trend is clear: After falling swiftly from a peak of more than six million last spring, weekly jobless claims have stalled at a level far higher than the worst weeks of past recessions.
“The level of claims is still staggeringly high,” said Daniel Zhao, senior economist at the career site Glassdoor. “We’re seeing evidence that the recovery is slowing down, whether it’s in slowing payroll gains or in the sluggish improvement in jobless claims.”
That slowdown comes as trillions of dollars in government aid to households and businesses has dried up. Prospects for a new stimulus package, already dubious in a divided Washington, collapsed outright this week when President Trump said he was pulling out of negotiations.
Economists warn that without more aid, layoffs will rise again. Several major corporations like Disney and Allstate have announced thousands of new job cuts. And with winter weather looming, restaurants and other businesses that were able to shift operations outdoors during warmer weather could be forced to pull back anew.
Millions of people who lost jobs earlier in the crisis remain out of work, and many are starting to exhaust their financial resources. The threat is particularly acute for people receiving benefits under Pandemic Unemployment Assistance and another program created in response to the pandemic, both of which will expire at the end of the year.
“It seems increasingly unlikely that we’ll have a deal before the election, and bills are due now,” Mr. Zhao said. “Every week that passes puts extra pressure on workers, households and small businesses, so any delay in the stimulus is going to have a meaningful impact on Americans.”
A Paris appeals court on Thursday upheld an order by French antitrust regulators requiring Google to pay publishers to display headlines and snippets of their news articles, after years in which the online giant culled them for its own news service.
The ruling, which compels Google to negotiate with French news outlets over just how much the company owes them for using their content, comes after the European Union passed new copyright rules last year requiring Google to pay to display story summaries. Australia is preparing a similar rule that would affect Google and Facebook.
It is part of a bigger media battle over how money is derived from online content. Google has argued that it shouldn’t have to pay publishers for showing snippets of stories because its search engines send millions of readers to news outlets’ websites. In some cases, it stopped displaying snippets altogether to get around the rules.
Germany, Spain and other European countries have previously tried to require Google to compensate national publishers for scraping news items in its aggregator, with little success. Google pushed back in Spain, halting its Google News service there. In Germany, some publishers dropped a push for compensation after Google stopped displaying snippets, leading to a drop in online traffic from the search engine to their websites.
Google said last week it would pay publishers in Germany, Brazil, Argentina, Canada and Britain a total of $1 billion over the next three years to display their content in a bid to calm tensions with media outlets.
In France, Google had also threatened to stop displaying news summaries and thumbnail photos in search results after regulators last year pressed it to compensate French media groups. Publishers and the news agency Agence France-Presse had filed a complaint with the French market authority claiming the company was abusing its dominant position as a search engine — a ruling that the authority upheld.
The court decision on Thursday rejects Google’s appeal, requiring the company to come to the bargaining table.
“Our priority remains to reach an agreement with the French publishers and press agencies,” Google said. “We appealed to get legal clarity on some parts of the order, and we will now review the decision of the Paris Court of Appeal.”
Unemployment benefits have kept millions of families afloat during the pandemic-induced recession. But the benefits won’t last forever.
Last week was the 29th week since mass layoffs began in March. In most states, regular unemployment benefits last just 26 weeks, meaning that many people who lost their jobs in the first wave have already exhausted their benefits.
Congress in March created a program funded by the federal government for people whose state benefits have expired. The number of recipients under that program, Pandemic Emergency Unemployment Compensation, swelled to nearly two million in mid-September, up from 1.4 million a month earlier.
The program adds just 13 weeks of additional benefits, however, so people who lost their jobs in March will receive those benefits only until mid-December. And the entire program will expire at the end of the year if Congress doesn’t extend it.
A separate program, which predates the pandemic, offers another 13 to 20 weeks of benefits, depending on the state. But the benefits are based on state economic conditions, and the rapid decline in the unemployment rate means that workers in several states would no longer qualify for it.
The net result is that potentially millions of workers could see their benefits expire this winter. Epidemiologists warn that cases of the coronavirus are likely to rise as temperatures drop, and winter weather could reduce job opportunities.
“People are going to have their backs against the wall, and it’s pretty much the worst time of the year for the program to end,” said AnnElizabeth Konkel, an economist at the employment site Indeed.
Wall Street held on to a small gain Thursday as investors awaited clarity on the status of efforts in Washington to aid ailing industries in the United States.
Stocks have been whipsawed this week in a reflection of shifting sentiment about a potential economic stimulus package. Financial markets were roiled on Tuesday after Mr. Trump said he was abandoning efforts to reach an agreement with Democratic lawmakers, but then rallied on Wednesday over the prospect that a deal to at least support the airline industry was still on the table.
But on Thursday, the picture grew murkier. Before the start of trading, Mr. Trump said on television that negotiations on a broad stimulus package — not just an airline bill — had resumed.
Later, Speaker Nancy Pelosi said she would not agree to an airlines-only relief measure without the promise of more aid for Americans, telling reporters “there is not a stand-alone bill without a bigger bill.”
“Hopes for a U.S. pre-election fiscal stimulus are quietly fading to nothing,” Paul Donovan, an economist at UBS Global Wealth Management, wrote in a note to clients. “There might be something for the airlines, but no big package looks likely given the language (and amount of time available).”
American Airlines, Delta Air Lines and United Airlines all gave up their early gains after Ms. Pelosi’s statement. They had rallied amid expectations that Congress and the Treasury Department would focus on the narrower bill to aid the industry.
The S&P 500 rose about half a percent, after a gain of 1.7 percent on Wednesday.
Crude oil futures climbed about 2 percent, as Hurricane Delta caused oil producers to shut down most of their output in the Gulf of Mexico.
Speaker Nancy Pelosi of California on Thursday said she would not agree to stand-alone aid package for airlines unless the Trump administration committed to a broader pandemic relief plan to help struggling Americans, declaring that “there is no stand-alone bill without a bigger bill.”
Her comments cast doubt on the prospects for a compromise just hours after President Trump had given an upbeat assessment, saying in an interview that he had reconsidered his decision to pull the plug on bipartisan negotiations on a stimulus plan until after the election.
“I shut down talks two days ago because they weren’t working out,” Mr. Trump said during a wide-ranging interview on Fox Business. “Now they’re starting to work out.”
The prospect of a deal remained remote, given the steep political obstacles that have hampered agreement for months. Still, Ms. Pelosi and Steven Mnuchin, the Treasury secretary, have continued to talk privately about a potential aid measure for airlines to prevent tens of thousands of workers from being furloughed or laid off, and were scheduled to do so again later Thursday.
Mr. Trump said the discussions had also touched on the possibility of another round of $1,200 stimulus checks. “We’re talking about airlines and we’re talking about a bigger deal than airlines,” he said.
Ms. Pelosi told reporters on Capitol Hill that she had made it clear to Mr. Mnuchin on Wednesday evening that her willingness to consider an airline rescue measure was contingent on the administration’s agreement to a broader stimulus plan.
“We’re happy to review what that stand-alone bill would look like, as part of a bigger bill, if there’s a bigger bill,” she said. “We’re at the table — we want to continue the conversation.”
Republicans blocked a Democratic proposal for airline aid on Friday, calling it partisan and too expensive. A similar Republican bill in the Senate would repurpose unspent funds from the $2.2 trillion stimulus law enacted last spring, a move that many Democrats have opposed.
Still, Mr. Trump appeared to be hoping anew for some kind of deal before Election Day, after his move to publicly scuttle the stimulus discussions prompted alarm among Republicans that voters would blame them for the collapse of the effort.
Princeton University’s campus will soon reflect a dramatic change in its values brought about by pressure from students and the public as part of a strengthening movement toward racial equality.
A residential building complex that for over 50 years bore the name of Woodrow Wilson, the U.S. president who imposed segregation on the federal government in the lead-up to World War I, will soon be torn down and replaced with a new one named for a Black woman, Mellody Hobson, a Princeton alumna who has made a sizable donation for the new construction.
“My hope is that my name will remind future generations of students — especially those who are Black and brown and the ‘firsts’ in their families — that they too belong,” Ms. Hobson said in a statement released by the university on Thursday. She added that replacing Mr. Wilson’s name “is my very personal way of letting them know that our past does not have to be our future.”
Ms. Hobson is the co-chief executive of Ariel Investments, the largest minority-owned investment firm. A spokesman for the university declined to say how much she is giving, but pointed to a $65 million gift from a pair of wealthy donors as “comparable.”
The money, which is coming from Ms. Hobson personally and from the Hobson/Lucas Family Foundation (her husband is the film producer George Lucas), will create Hobson College, which will replace a dormitory complex known until this summer as Wilson College. It was renamed First College in June after Princeton’s president, Christopher L. Eisgruber, declared that Mr. Wilson’s “racist thinking and policies make him an inappropriate namesake for a school or college whose scholars, students and alumni must stand firmly against racism in all its forms.”
In a statement on Thursday, Mr. Eisgruber said the new dormitory “will enable us to improve the student experience at Princeton and to reimagine a central part of our campus, while also recognizing a remarkable woman who is a positive, powerful force for change in the world.”
Work will begin in 2023, and the new dormitory is expected to open in 2026.
IBM is splitting itself in two, spinning off its legacy technology services business to focus on cloud computing and artificial intelligence, a move that reflects how decisively computing has shifted to the cloud.
The split is IBM’s effort to grab more of that fast-growing business and thrive amid the market leaders, Amazon Web Services, Microsoft and Google.
The business retaining the IBM name will include its cloud operations, along with its hardware, software and consulting services units. They represent about three quarters of the current company’s revenue.
The business to be spun off, in a company that has not yet named, is IBM’s basic technology services business, which maintains, supports and upgrades the computing operations of thousands of corporate customers.
That business is sizable, with sales of about $19 billion a year, but it’s not where the growth opportunities lie in the technology business.
The split comes as IBM has been unable to generate overall growth for years, disappointing investors, as the erosion of its old-line businesses held it back. Last year, the company’s revenue declined by 3 percent, to $77 billion.
The split, IBM’s chief executive, Arvind Krishna said, was intended to “unlock growth,” adding that IBM should deliver “mid-single-digit” revenue growth over the next few years.
IBM shares rose more than 7 percent in early trading.
The company has positioned itself as a champion of a “hybrid cloud” strategy. It is trying to take its corporate customers into cloud computing — a more flexible, typically pay-for-use model — without abandoning its old technology altogether. But it lags behind the biggest, cloud providers, led by Amazon and Microsoft.
Its hybrid approach is an attempt to carve out a lucrative, growing business in the cloud market without competing head-to-head with the cloud leaders, each of which spends tens of billions of dollars a year on vast data center networks.
Morgan Stanley announced Thursday that it planned to acquire Eaton Vance, investment and wealth management firm, in a deal worth $7 billion. The combined group would oversee roughly $1.2 trillion assets and generate more than $5 billion in sales, Morgan Stanley said in a statement.
Morgan Stanley said it expected to extract $150 million in cost savings out of the deal, which it is financing half in cash and half in stock. The companies said they expected the deal to close in the second quarter of next year.
Morgan Stanley has been expanding its money management business, most notably via its $13 billion purchase of E-trade in February. That deal, which officially closed this week, and the acquisition of Eaton Vance brings the Wall Street institution best known for its investment bank a mass-market customer base and a steadier business line.
The asset management industry is under pressure to consolidate, driven by a shift to passive strategies, pioneered by Vanguard, that track indexes and charge lower fees from active investment funds, which aim to beat the market in return for higher fees. Other recent deals include Franklin Resources’ $4.5 billion acquisition of Legg Mason, announced this summer.
There may be more deals on the way: the activist investment firm Trian Fund Management has taken stakes in Invesco and Janus Henderson and reportedly plans to push the two to merge.
Imax furloughed 150 employees in the North America and Europe, or roughly 20 percent of its global work force, for at least two months because of the closing of movie theaters by the Regal Cinemas chain and postponement of major movies by Hollywood studios. The move would allow it to “temporarily retrench, conserve resources and adjust its operations,” the company, which makes large-format films, said in a statement.
The Organization of the Petroleum Exporting Countries on Thursday forecast that its members would gain market share for their oil over the next quarter-century at the expense of other producers, including the United States. OPEC’s World Oil Outlook 2020 report predicts that demand will grow modestly, by about 9 percent through 2040, before beginning to decline. OPEC, though, will still be in the driver’s seat because the output of most other producers, including the United States, will decline over the period, it said. In this optimistic view, OPEC will find room to increase production by about 10 million barrels a day over 2019 levels by 2045, lifting its share from about 34 percent to 40 percent.
Best Buy is the latest retailer to announce that it will offer the holiday deals typically found after Thanksgiving on Oct. 13 and 14, following similar announcements from Amazon, Target and Walmart, as the pandemic pulls seasonal shopping earlier than ever. Best Buy said on Thursday that it would offer the Black Friday deals next week, both online and in stores, after Target said that it would hold an event called “Deal Days” on the same dates. Walmart is planning its own deals bonanza called the “Big Save Event” Oct. 11 to Oct. 15. The chains’ announcements came after Amazon said that its annual Prime Day sale, which was postponed in July, would be held on Oct. 13 and 14.
Ruby Tuesday filed for bankruptcy protection on Wednesday, citing the “unprecedented impact” of the coronavirus pandemic. The casual dining chain said it would use the Chapter 11 process to cut debt and buttress its financial position. Ruby Tuesday expects to keep its restaurants open during the bankruptcy process, which it intends to emerge from “as quickly as possible.”