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Oil Industry Turns to Mergers and Acquisitions to Survive

HOUSTON — The once mighty oil and gas industry is flailing, desperately trying to survive a pandemic that has sharply reduced demand for its products.

Most companies have cut back drilling, laid off workers and written off assets. Now some are seeking out merger and acquisition targets to reduce costs. ConocoPhillips announced on Monday that it was acquiring Concho Resources for $9.7 billion, the biggest deal in the industry since oil prices collapsed in March.

The acquisition, days after the completion of Chevron’s takeover of Noble Energy, would create one of the country’s biggest shale drillers and signals an accelerating industry consolidation as oil prices languish around $40 a barrel, just above the levels many businesses need to break even. Just last month Devon Energy said it would buy WPX Energy for $2.6 billion.

But many investors are not sure such deal making will be enough to protect the industry from a sharp decline. The share prices of ConocoPhillips and Concho closed down by about 3 percent on Monday. The big problem is that the fortunes of oil companies are fundamentally tied to oil and natural gas prices, which remain stubbornly low. Few experts expect a full recovery of oil demand before 2022, and some analysts have gone so far as to declare that oil demand might have peaked in 2019 and could slide in the years to come as the popularity of electric cars grows.

“There’s a lot more red ink than there is black gold,” said Michael Lynch, president of Strategic Energy and Economic Research, who periodically advises the Organization of the Petroleum Exporting Countries. “Companies are trying to hunker down and weather the storm. Most people don’t think the oil price will recover for a couple of years.”

More than 50 North American oil and gas companies with debts totaling more than $50 billion have sought bankruptcy protection this year. Among the casualties was Chesapeake Energy, a shale pioneer based in Oklahoma City. More failures could come in the next two years as companies are required to repay tens of billions of dollars in debt.

Oil companies are facing daunting uncertainties, particularly as concerns over climate change mount and governments impose tougher regulations to reduce greenhouse gas emissions caused by the burning of fossil fuels. Small companies fear a crackdown on methane leaks and tightening regulations, especially if former Vice President Joseph R. Biden Jr. becomes president and Democrats take control of the Senate.

European oil companies have already begun pivoting away from oil and gas, plotting investments in renewable energy like wind and solar to attract new investors. While those companies have had limited success so far, American companies have for the most part stuck with their traditional businesses. They have adapted to low oil and gas prices by slashing investments by 30 percent or more. The oil and gas rig count has dropped by 569 since last fall, to only 282 operating across the country.

Oil companies are hoarding cash and renegotiating contracts with service companies that drill and complete wells. Rig rental rates are down roughly 10 percent, pressuring the companies that do the field work. More than 100,000 American oil workers have lost their jobs in recent months.

ConocoPhillips, the largest American independent oil company, has been something of an outlier, recently raising its dividend and buying back shares. Nevertheless, ConocoPhillips’s stock price has dropped by roughly half so far this year.

The company is a major producer in the Bakken shale field of North Dakota and the Eagle Ford shale field in South Texas. By acquiring Concho, it will become a major player in the world’s most lucrative shale field, the Permian Basin, which straddles West Texas and New Mexico.

With Concho’s 550,000 acres in the Permian, ConocoPhillips will more than triple its 170,000-acre position in the basin, which became the world’s most productive oil field last year.

Concho is little known outside Texas but became a major oil producer after it bought RSP Permian for $9.5 billion in 2018. Concho produced more than 300,000 barrels in the second quarter.

“Together ConocoPhillips and Concho will have unmatched scale and quality,” said Ryan M. Lance, ConocoPhillips’s chairman and chief executive, referring to their joint balance sheet, resource reserves and personnel.

The deal would help make ConocoPhillips one of the largest players in the Permian, putting it in the same league as companies that are much bigger than it over all.

“The combination is remarkable,” said Robert Clarke, a vice president and oil analyst at Wood Mackenzie, a research and consulting firm. “Just in regards to scale, ConocoPhillips is adding enough Permian production to nip at the heels of ExxonMobil’s massive program.”

As the shale industry grew over the last decade or so, many smaller companies poured billions of dollars into the Permian and other parts of the country. Now, the process appears to be headed in the opposite direction as the industry retrenches and becomes smaller.

Investment in U.S. shale oil has dropped to an estimated $45 billion this year from roughly $100 billion annually in 2018 and 2019, according to the International Energy Agency. In its annual report released this month, the Paris-based organization said a shakeout was underway.

“The influence of large players is set to grow as acreage is consolidated by larger industry players, and the focus on growth is set to be supplanted over time by a focus on returns,” the report said. “The exuberance and breakneck growth of the early years may be replaced by something a little steadier.”

American oil production fell to 11.2 million barrels a day in September from 13 million at the beginning of the year. The Energy Department expects production to fall an additional 200,000 barrels a day by mid-2021 as companies drill fewer new wells to replace older ones.

The industry has no choice but to cut back. Americans drove 12.3 percent fewer miles in August than they did a year earlier, according to the Transportation Department.

Globally, daily oil consumption was down more than 6 percent in September from a year earlier, according to the Energy Department. Oil production continues to outpace demand, keeping inventory levels high and prices low.

And the pandemic is not yet under control in many parts of the world. If sustained, the recent increase in coronavirus infections in the United States, Europe and elsewhere could reduce demand for oil and gas even further in the coming months.

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U.S. Unemployment Claims Remained Elevated Last Week

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.

Unemployment filings have fallen swiftly from their peak of more than six million last spring. But that progress has recently stalled at a level far higher than the worst weeks of past recessions. That pattern continued last week, the Labor Department said Thursday: More than 800,000 Americans filed new applications for state benefits, before adjusting for seasonal variations, roughly in line with where the total has been since early August.

“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, appeared to fall apart this week when President Trump said he was pulling out of negotiations. Economists across the ideological spectrum warn that the loss of federal help will lead to more layoffs and business failures, and more pain for families.

The continued high level of jobless claims, combined with large monthly job gains, highlights the remarkable level of churn still roiling the U.S. labor market. Companies are continuing to rehire workers as they reopen, even as other companies cut jobs in response to still-depressed demand for goods and services. The result is a job market that is being pulled in two directions at once — and economic data that can appear to tell contradictory stories.

Adding to the challenge for analysts and forecasters, the pandemic has thrown the data itself into disarray. For the second week in a row, the jobless claims data carried a Golden-State-size asterisk: California last month announced that it would temporarily stop accepting new unemployment applications while it addressed a huge processing backlog and installed 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.

While the lack of data from California makes week-to-week comparisons difficult, the bigger picture is clear: The economic recovery is losing momentum, even as millions of Americans remain out of work.

Monthly jobs data released last week showed that job growth slowed sharply in September, and that last spring’s temporary furloughs are increasingly turning into permanent job losses. Major corporations like Disney and Allstate have announced thousands of new job cuts. And with winter approaching, restaurants and other businesses that were able to shift operations outdoors during warmer weather could be forced to pull back anew.

Separate data from the Census Bureau on Wednesday showed that 8.3 million Americans reported being behind on rent in mid-September, and 3.8 million reported that they were likely to be evicted in the next two months. Both figures have changed little since August.

“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.”

The situation is particularly dire for people who lost their jobs early in the pandemic, many of whom are now nearing the end of their unemployment benefits.

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 have already exhausted their benefits.

In March, Congress 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 only 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 existed before the pandemic, offers an additional 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, including Idaho, Wyoming and Utah, would no longer qualify for it. Missouri will join their ranks next week.

Another emergency program, Pandemic Unemployment Assistance, also expires at the end of the year. That program covers freelancers, self-employed workers, part-timers and others who don’t qualify for benefits under the regular unemployment system. More than 460,000 people filed new applications under the program last week, and millions are receiving benefits in total.

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.

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New Stimulus Hopes Fade While Economic Risks Grow

Here is the situation the U.S. economy faces, a month before Election Day: Job growth is stalling. Layoffs are mounting. And no more help is coming, at least not right away.

American households and businesses have gone two months without the enhanced unemployment benefits, low-interest loans and other programs that helped prop up the economy in the spring. And now, after President Trump’s announcement Tuesday that he was cutting off stimulus negotiations until after the election, the wait will go on at least another month — and very likely until the next presidential term starts in 2021.

It could be a dangerous delay.

Already, many furloughs are turning into permanent job losses, and major companies like Disney and Allstate are initiating new rounds of layoffs. The hotel industry is warning of thousands of closures, and tens of thousands of small businesses are weighing whether to close up shop for good. An estimated one of every seven small businesses in the United States had shut down permanently by the end of August — 850,000 in all — according to data from Womply, a marketing platform. The deeper those wounds, the longer the economy will take to heal.

Economists say lawmakers should be acting immediately to send more money to workers marooned on unemployment by the recession, to businesses of all sizes that are struggling to survive until the pandemic abates and their customers return in full force, and to state and local governments that have seen tax revenues decline and are already moving to lay off public employees.

While they disagree about exactly how much federal aid the economy needs right now, virtually all economists, across the ideological spectrum, agree on one thing: The correct dollar figure is not “zero.” Most estimates fall in a range between $1 trillion and $2 trillion.

Mr. Trump appeared to open the door to piecemeal measures like aid for airlines and individual checks, and his Treasury Secretary, Steven Mnuchin, and House Speaker Nancy Pelosi spoke twice on Wednesday about a stand-alone bill for airline relief. But prospects for even a limited package were uncertain and would fall far short of the amount that many economists say is needed to keep businesses and households solvent.

“The risk to waiting is that we may find ourselves in a place where we’re unable to turn back, we’ll hit a tipping point,” said Karen Dynan, a Harvard economist and Treasury Department official during the Obama administration.

R. Glenn Hubbard, a Columbia University economist who was chairman of the White House Council of Economic Advisers under President George W. Bush, said the economy still needed $1 trillion in immediate aid for people, businesses and state governments. “Failing to act will have real economic consequences,” he said.

Jerome H. Powell, the Federal Reserve chair, echoed those concerns in a speech on Tuesday, arguing that the government should go big and that not providing adequate support carried risks for the economy.

“Too little support would lead to a weak recovery, creating unnecessary hardship for households and businesses,” he said. “Over time, household insolvencies and business bankruptcies would rise, harming the productive capacity of the economy and holding back wage growth.”

Business leaders have made urgent pleas for help, arguing that the risk of not acting could doom entire sectors. The Business Roundtable, a group of chief executives from major corporations like Apple and Walmart, warned on Tuesday evening that “communities across the country are on the precipice of a downward spiral and facing irreparable damage.”

Some 36,000 franchise businesses are likely to close by winter without additional federal support, said Matthew Haller, senior vice president for government relations and public affairs at the International Franchise Association in Washington, which represents owners of gyms, salons and other chains. “The situation’s pretty dire,” he said.

Laid-off workers are also under pressure. Ernie Tedeschi, an economist at Evercore ISI, estimates that unemployed Americans will begin to exhaust the savings they were able to amass from previous rounds of aid as early as this month, leaving them struggling to buy food or pay rent. Without another aid package, the economy will regain four million fewer jobs through the end of next year than it would have if lawmakers had struck a deal, he said in a research note on Wednesday.

The gridlock in Washington is a reversal from the spring, when fear of an imminent economic collapse led Congress to vote overwhelmingly to approve trillions of dollars in aid to households and businesses. The effort was largely successful: Households began spending again, companies began bringing back workers, and a predicted tidal wave of evictions and foreclosures mostly failed to materialize. The unemployment rate, which reached nearly 15 percent in April, fell to 7.9 percent in September.

But most of the aid programs expired over the summer, and in recent weeks economic gains have faltered. Economists say the loss of momentum is likely to grow worse if more aid doesn’t arrive soon. Federal Reserve officials had been expecting another aid package to arrive when they released their economic projections in September, minutes released on Wednesday showed, and warned that “absent a new package, growth could decelerate at a faster-than-expected pace in the fourth quarter.”

While Republicans, Democrats and the White House have sparred over the scope and size of another package, many economists say the amount is less important than how fast and where the money is deployed.

“When do you need money? The answer is, two months ago,” said Jason Furman, who ran the White House Council of Economic Advisers under President Barack Obama.

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Credit…Joseph Rushmore for The New York Times

Unemployment benefits are a top priority for many economists. The $600 a week in extra benefits that kept many households afloat in the spring expired at the end of July, leaving millions of families struggling to get by on only their regular state unemployment benefits, which often total just a few hundred dollars a week. Millions more people are depending on temporary programs that extend aid to those who don’t qualify for regular state benefits or whose benefits have expired. Those programs lapse at the end of the year.

Research has found that unemployment benefits are among the most effective forms of economic stimulus, because jobless workers are likely to spend the money rather than save it. But many economists said that is a secondary reason for extending benefits; the primary reason is to keep families from slipping into poverty or losing their homes.

“My principal reason for wanting the $600 to continue is not as a macroeconomist, it’s because I’m worried about people,” said Jay Shambaugh, a George Washington University economist who served as an adviser to Mr. Obama. “I think we can afford it and not have people starve.”

Senate Republicans have made clear they will not support restoring the full $600 supplement, which many of them opposed from the start. But even progressive economists say any amount is better than nothing.

“I don’t think it’s worth dying on the hill of ‘should it be $600 or $400,’” said Claudia Sahm, a former Federal Reserve economist who has been one of the most vocal proponents for federal spending since the start of the pandemic.

The consequences of failing to provide help to jobless families would be particularly dire for low-income families, many of them Black and Hispanic. Those workers were among the last to make gains after the previous recession, and have lost the most this time around.

“The gains that have been built up over time are fragile,” said Raghuram G. Rajan, a former chief economist of the International Monetary Fund who is now a professor at the University of Chicago. “You have a whole bunch of people who’ve struggled their way into a semblance of normalcy by 2019, and then you have this massive crisis. If we don’t try to protect those gains, it will take a longer time, a really long time to come back.”

Businesses are also in need of more help, particularly industries that have yet to return to full capacity as the virus persists. Major airlines began laying off workers this month after Congress failed to extend an earlier aid package. A hospitality-industry lobbying group last month released a report estimating that 1.6 million hotel workers could lose their jobs and 38,000 hotels could close without federal help. Restaurants are in similarly dire straits, especially as colder weather begins to shut down outdoor dining in much of the country.

With the pandemic lingering longer than many had expected, economists said businesses are facing new challenges that will require a different approach from what Congress previously funded. For instance, any new program probably needs to provide more flexibility to businesses, allowing them to make adjustments — including laying off workers — to survive a crisis that could stretch on another year or more.

Steven Hamilton, a George Washington University economist, said lawmakers should “radically expand” a tax credit that offsets the costs of retaining employees, along with additional aid for fixed costs like rent. He said any delay in help, especially until next year, “would be catastrophic.”

“It is much faster to close a business than to start one,” he said. “It took us a decade to regain the businesses lost in just three years during the Great Recession. The labor market seems to have hit a ceiling in recent months, and a big part of that is that many workers’ former employers no longer exist.”

And while companies have begun to bring back furloughed workers, the U.S. economy lost 216,000 government jobs in September, according to the Labor Department, with most of those cuts coming at the state and local level. Forecasters warn that much deeper cuts are coming as state and local governments reel from lost tax revenue.

Economists say that the failure to help state and local governments was one of the biggest policy mistakes of the last recession. Back then, state and local governments cut thousands of jobs, slashed spending and raised taxes, offsetting federal efforts to prop up the economy through deficit spending and tax cuts.

Economists have been arguing since the spring that insufficient aid for state and local governments was a significant flaw in the various relief packages.

“We’re in for a sizable reduction in economic activity coming from state governments if we don’t do anything,” said Wendy Edelberg, who runs the Hamilton Project, an economic-policy arm of the Brookings Institution. “It’s just a terrible thought that we didn’t learn that lesson post-2008, that state budgets are incredibly important to the aggregate economy.”

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Workers Face Permanent Job Losses as the Virus Persists

The United States economy is facing a tidal wave of long-term unemployment as millions of people who lost jobs early in the pandemic remain out of work six months later and job losses increasingly turn permanent.

The Labor Department said on Friday that 2.4 million people had been out of work for 27 weeks or more, the threshold it uses to define long-term joblessness. An even bigger surge is on the way: Nearly five million people are approaching long-term joblessness over the next two months. The same report showed that even as temporary layoffs were on the decline, permanent job losses were rising sharply.

Those two problems — rising long-term unemployment and permanent job losses — are separate but intertwined and, together, could foreshadow a period of prolonged economic damage and financial pain for American families.

Companies that are limping along below capacity this far into the crisis may be increasingly unlikely to ever recall their employees. History also suggests the longer that people are out of work, the harder it is for them to get back into a job.

To be sure, the labor market has bounced back more quickly than most forecasters expected in the spring. The unemployment rate dropped to 7.9 percent in September from 14.7 percent in April. But progress has slowed, and there are signs of more lasting damage. Through September, the economy had regained only about half of the 22 million jobs it lost between February and April.

High-interaction businesses like restaurants, theaters, casinos, conferences and cruises are struggling to fully reopen as the coronavirus continues to spread, leaving many workers out of jobs.

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Credit…Eve Edelheit for The New York Times

Disney announced this past week that it would lay off 28,000 U.S. employees as its theme parks struggle. Layoff notices filed with state authorities show that hospitality and service companies across the country, from P.F. Chang’s restaurant branches to Gap stores, are making thousands of long-term staff reductions. Airport bookstores in Pennsylvania and Tennessee are cutting jobs as travel dwindles. So are wineries and upscale sports clubs in California.

Airline job cuts run to the tens of thousands. American Airlines started to send furlough notices to 19,000 workers and United Airlines to 13,000 after a federal moratorium expired on Thursday. Those are on top of reductions at other carriers, and existing firings across the industry.

Altogether, nearly 3.8 million people had lost their jobs permanently in September, according to the Labor Department’s latest monthly survey, almost twice as many as at the height of the pandemic job losses, in April.

As a result, the employment rebound, which was initially rapid, may begin to feel more like the grinding healing process that dragged on for a full decade after the Great Recession, economists warned.

“The risk is that you end up with people permanently detached from the labor market, and either you never get them back in or it takes you 10 years to get them back in, like it did the last time,” said Ian Shepherdson, chief economist of Pantheon Macroeconomics. “The economic consequences are that you depress future growth.”

The slow recovery from the Great Recession, when the tally of the long-term unemployed neared seven million, made it clear that extended spells out of work can haunt workers, locking them out of job opportunities or reducing pay.

Whether that penalty holds true in the pandemic-induced downturn remains unclear, but the economic repercussions of having a large number of workers sidelined will undoubtedly weigh on the United States’ economic potential and disrupt lives.

Jerome H. Powell, the Federal Reserve chair, has warned that a “significant group” of people may “still be struggling to find jobs” even as the labor market strengthens.

Longer-term unemployment can be “very damaging to people’s lives and their working lives,” Mr. Powell said at a news conference this year.

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Credit…Elizabeth Frantz for The New York Times

The risk of permanent job loss weighs heavily on workers like MacKenzie Nicholson of Nottingham, N.H., who lost her job with the American Cancer Society in June after the pandemic cut into the organization’s fund-raising. Her husband, a service manager at a Jeep dealership, kept his job after a brief furlough, but his income is not enough to cover their monthly expenses.

Ms. Nicholson plans to start picking up gig shifts with DoorDash and Uber in the evenings, once her husband gets home from work and can take over watching their two young children.

“I’ll be saying goodbye to my husband when he gets in the door,” she said. “It won’t be ideal for our marriage.”

It’s hard for Ms. Nicholson, 30, to square the anxiety over meeting basic needs with the life she had one year ago, when she and her husband bought their first home, providing a sense of security. Now their mortgage payment feels like an albatross, and a simple trip to Target feels out of reach.

“My daughter ran out of toothpaste and I put it on the shopping list, and then realized we could use the sample bottles we get from the dentist to hold out for a few weeks,” Ms. Nicholson said. “I’m making disgusting casseroles with everything I have in the fridge so I don’t have to go grocery shopping.”

Lasting joblessness is a comparatively new problem in the United States. Europe, where social safety nets are more generous and labor rules are stricter, has long had high rates of extended unemployment. But economists once thought that the United States’ less restrictive, more dynamic labor market made it relatively immune. Even in the brutal recessions of the early 1980s, when the unemployment rate topped 10 percent, less than a quarter of job seekers had remained out of work longer than six months.

That has changed in recent decades, as the sluggish “jobless recoveries” that followed the past three recessions left a large share of workers unable to find jobs for months or years. In the aftermath of the Great Recession, nearly half of all job seekers had been unemployed long term. Many younger people dropped out of the job market altogether, while long-term unemployment for workers older than 50 stayed at high levels for years.

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Credit…Maddie McGarvey for The New York Times

This is a very different crisis, both in swiftness and in breadth. Workers in entire industries were furloughed practically overnight, with little regard for their unique skills and performance. Employers may not fault future applicants for those lost jobs.

“It’s not clear to me that anyone’s going to hold it against you that you were an unemployed waiter for nine months,” said Jay Shambaugh, a George Washington University economist.

But there is mounting evidence that the long-term jobless will face a harder road back to work. In August, newly unemployed workers — out of work less than five weeks — were twice as likely to find jobs as those out of work more than six months.

Many people who aren’t looking for work now because they believe they are on temporary layoff may find that their jobs never return. They may be “frozen in place by the uncertainty of not knowing what the economy is going to look like,” said Thomas Barkin, president of the Federal Reserve Bank of Richmond.

If losses do turn permanent, it’s unclear how quickly workers will be able to shift into new roles. People with similar backgrounds tend to apply for similar jobs, which could lead to a glut of available workers in categories that lack the demand to absorb them.

Jose Martinez, 47, a houseman at the DoubleTree Metropolitan hotel in Midtown Manhattan for 26 years, remains hopeful he will retain his job. He was laid off in April, and despite several setbacks, he said he expects to return this coming week because his union contract requires that workers be brought back according to tenure. His wife also works at the hotel, but she has not been there for as long and is more likely to remain out of work longer.

“There are hotels that are closing, but it’s mostly the smaller hotels,” Mr. Martinez said. “I have faith that I’ll be back at work.”

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Credit…Jeenah Moon for The New York Times

Nathaniel Claridad is less certain what the future holds, though he, too, hopes for a return to normalcy. He was acting in a show in Florida when Broadway closed. Days later, the artistic director informed him and the rest of the cast and crew that they were free to go — they were shutting down as well.

Fast forward six months and Mr. Claridad, who had another show and a concert postponed and saw his job selling tickets at a Midtown theater wilt away, remains unemployed. He’s current on rent for the Washington Heights apartment he shares with his employed partner, and he’s hopeful that his shows will take place in 2021 — but he’s starting to pick up Zoom directing gigs here and there, and he is applying to teaching jobs.

“It’s getting to the time now where I have to decide what to do, in terms of income,” Mr. Claridad, 38, said. But there are downsides to looking for work when your colleagues with similar skill sets are doing the same.

“Talking with friends, it feels like the market is saturated with people like me who are looking for another source of income,” he said.

Labor supply also remains an issue. Employers report that many workers, including those who are older, are nervous about returning given the health threat. People with children, particularly women, are struggling to return to jobs because they have limited child care options with schools and day cares all or partly closed.

Women’s participation rate — the share working or looking for work — dropped last month to its lowest level since 1987, excluding April and May this year. The household employment survey suggested that they might have lost more than 140,000 jobs in September, though a separate survey of businesses showed them still eking out gains.

The people most at risk of getting stuck on the sidelines in this crisis are in many cases those least prepared to take the hit.

Minority groups have seen bigger spikes in unemployment during the pandemic era — and getting back to work is taking them longer, suggesting that they are likely to make up a disproportionate share of the long-term unemployed.

Black joblessness jumped higher earlier in the recession and is declining more slowly than that for white workers: It stood at 12.1 percent in September, compared with 7 percent for white adults. Hispanic unemployment jumped at the onset of the crisis but is declining relatively quickly. Even so, it stood at 10.3 percent last month.

Those groups hold far less wealth, so they are less financially prepared for a long period out of work.

For now, unemployment is falling across demographic groups as layoffs end, and some economists are hopeful that the rebound will continue — though most warn that recovery will remain incomplete until the virus is under control.

Mr. Barkin at the Richmond Fed is urging communities and policymakers to think about retraining options now, in recognition that some share of the work force may find that its old skills are obsolete.

“It’s a virtual certainty that there are going to be large scarring effects for workers in certain industries,” said Alicia Sasser Modestino, an economist at Northeastern University. “What will those workers do with the skill sets that they have?”

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Jobs Report Shows Further Slowdown in U.S. Economic Recovery

Six months after the coronavirus pandemic tore a hole in the U.S. economy, the once-promising recovery is stalling, leaving millions out of work, and threatening to push millions more — particularly women — out of the labor force entirely.

The latest evidence came Friday, when the Labor Department reported that employers added 661,000 jobs in September, far fewer than forecasters expected.

It was the third straight month of slowing job growth, a worrying trend given the scale of the challenge ahead. The economy has nearly 11 million fewer jobs than it did before the pandemic, a bigger loss than the 8.7 million at the depth of the recession a decade ago.

Economists said the report underscored the need for more federal help. “It’s disturbing that we’re seeing such a dramatic slowdown in employment gains as we head into the fall,” said Diane Swonk, chief economist for the accounting firm Grant Thornton. “This is a red flag. We need aid now.”

The September slowdown was partly a result of public-sector job losses, particularly in school districts, where payrolls fell by more than 200,000. Economists said some of those jobs would come back if more schools opened for in-person instruction. But further cuts could be looming as state and local governments reel from a collapse in tax revenues.

The unemployment rate fell to 7.9 percent, down from a record high of nearly 15 percent in April. But even that good news carried a caveat: Nearly 700,000 people left the labor force, meaning they no longer counted as unemployed. And a rising share of the unemployed report that their job losses are permanent, rather than furloughs.


Unemployment rate



By Ella Koeze·Unemployment rates are seasonally adjusted.·Source: Bureau of Labor Statistics

The report was the last set of monthly jobs numbers — and one of the last major pieces of economic data — before the presidential election on Nov. 3.

Trump administration officials put a positive spin on the report. Larry Kudlow, the director of the National Economic Council, said on the Fox Business Network that analysts were misreading the numbers. “I think they are better than some people think,” he said. “The overall economy is looking good.”

It isn’t clear how much the economic data will matter to an election race upended by the news that President Trump tested positive for the coronavirus. But economists said recent data carried a clear message: Without a “Phase 4” spending package in Congress, the slowdown will only get worse.

“Everything depends on Phase 4 and whether we get that or not,” said Aneta Markowska, chief economist for the investment bank Jefferies. “There’s no middle ground.”

Prospects for a deal improved this week after seeming all but dead in September. House Speaker Nancy Pelosi on Friday floated the possibility that Mr. Trump’s coronavirus diagnosis could make an agreement more likely.

“This kind of changes the dynamic, because here they see the reality of what we have been saying all along: This is a vicious virus,” Ms. Pelosi said on MSNBC.

For small businesses in the industries hit hardest by the pandemic, the lack of federal assistance is an existential threat — and time is running out.

When the pandemic shut down movie theaters last spring, Cleveland Cinemas was able to stay afloat in part thanks to a loan under the Paycheck Protection Program. But that money is long gone. So are the cash savings that the company, which operated five theaters in the Cleveland area, had set aside to pay for new seating to help compete with big multiplexes.

Jon Forman, who has owned Cleveland Cinemas since 1977, isn’t sure what to do next. He has reopened only two of his theaters, and neither is attracting enough patrons to break even, even with fewer than 10 employees, down from 85 before the pandemic.

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Credit…Da’Shaunae Marisa for The New York Times
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Credit…Da’Shaunae Marisa for The New York Times

Many Americans remain wary of sitting indoors with strangers for two or three hours. And studios, hesitant to distribute big-budget movies when few people will pay to see them, have been delaying major releases until 2021.

Big chains may have the resources to wait for better days, but Mr. Forman isn’t sure he does. He has closed one theater permanently. Two others have been dark since March, and he is thinking about shutting the two reopened ones until demand picks up.

“We’re on a slope going down,” he said. “Without some sort of support, businesses are not going to survive.”

Stories like Mr. Forman’s reflect the mounting risks that as the crisis drags on, it will do lasting damage to the economy.

When unemployment spiked in March and April, most of the job losses were temporary layoffs or furloughs. But that is beginning to change. The number of people reporting they had been permanently let go rose to 3.8 million in September, nearly twice as many as at the height of the pandemic in April.


Job losses are more likely to be permanent than earlier in the pandemic

Share of jobs lost each month that are temporary layoffs



By Ella Koeze·Data is seasonally adjusted.·Source: Bureau of Labor Statistics

“The temporary layoffs in the beginning are turning more and more into permanent layoffs now as companies begin to see what their near future looks like,” said Erica Groshen, a Cornell University economist and the former head of the Bureau of Labor Statistics.

Prospects are particularly grim for those who lost their jobs in the first weeks of the crisis. More than 2.4 million people have been out of work for 27 weeks or more, the formal — if somewhat arbitrary — threshold for long-term joblessness. An even bigger wave is on the way: Nearly five million people have been out of work for 15 to 26 weeks.

Research has found that people who are out of work for six months or more have a harder time getting jobs even when the economy improves, and many end up leaving the work force. That can leave lasting scars on both workers and the broader economy.

Connie Sarmiento used to work three jobs to support her family as a single mother. She lost all of them in a matter of weeks: The Grand Hyatt in San Francisco, where she worked as a telephone operator, laid her off in March. The following month, she lost her jobs working at Oracle Park, the Giants’ baseball stadium, and Chase Center, home of the N.B.A.’s Golden State Warriors.

Initially, Ms. Sarmiento was able to make ends meet thanks to the $600 a week that the federal government added onto her $450-a-week unemployment payment from the state. But the supplemental benefits expired at the end of July, and she is falling behind on her bills.

Ms. Sarmiento’s $3,000 monthly rent was due Thursday, but she has only half the money she needs to pay it. “I have to tell my landlord that I am unable to pay,” she said. “I’m afraid he’s going to tell me I have to move out. That’s really scary.”

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Credit…Brandon Ruffin for The New York Times

Ms. Sarmiento hopes to return to work at the Hyatt this fall and at Oracle Park next season. But she worries about her prospects if those jobs don’t return.

“I feel hopeless,” she said. “Some of the only jobs I can find are in warehouses. I’m 60 years old and I don’t know if I can lift big, heavy stuff anymore. My body is getting weak.”

The September data carried particularly grim news about the pandemic’s impact on women. Initial job losses were concentrated among employers with heavily female work forces, like the hospitality and retail industries. While employment in those businesses has begun to bounce back, many women have been unable to return to work because they are disproportionately shouldering the burden of having children home from school.


Unemployment for women is worse than men’s across most demographics

Unemployment rates by race for men, women and over all


Black
Hispanic
Asian
White


By Ella Koeze·Rates are seasonally adjusted except those for Asian men and women.·Source: Bureau of Labor Statistics

The number of women working fell by 143,000 in September, and the share of women working or actively looking for work — a measure known as the labor force participation rate — dropped to 55.6 percent from 56.1 percent. Apart from April and May 2020, that is the lowest reading for women’s labor force participation since 1987.

Economists worry that the unexpected pause in their careers could prove to be a long-term setback for many women.

“We know that women leaving the work force to care for children for a while has lasting effects on their earnings, their seniority and their climb up the ladder,” said Julia Pollak, a labor economist with the career site ZipRecruiter. “Career interruptions have a huge effect.”

When schools and child care centers closed in March, Darsheen Sargent began bringing her 11-year-old daughter with her to her job as a home health aide in the Seattle area. During the day, she juggled two jobs at the same time — caring for her client, and running into the other room to help her daughter adjust to online schooling.

But Ms. Sargent, 48, grew increasingly concerned about the risk she posed to herself, her daughter, and her client by continuing to go to work each day. And she found balancing work and child care too much to handle. In mid-April, she decided to take a leave of absence from her job.

But the relief she felt at being able to focus purely on her daughter’s needs was quickly replaced by anxiety over keeping up with her bills now that she was no longer working. She has had to borrow money from friends to pay her rent, utilities and car payment.

As soon as schools and child care centers reopen, she plans to return to work. But she has no idea how long that will take.

“As a single parent, I’m the sole provider for my daughter, and I’m just doing the best I can to manage,” she said.

Jeanna Smialek, Alan Rappeport and Emily Cochrane contributed reporting.

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Strong Job Growth, a Terrible Job Market: The Bizarre 2020 Economy

In a normal time, a month in which employers added 661,000 jobs would represent an absolute blockbuster — the kind of thing an incumbent president could happily promote as evidence his policies were working.

These are, of course, not normal times. And the 661,000 positions employers added to their payrolls in September are paltry relative to the 22 million positions slashed in March and April, and relative to the seven-figure monthly job growth experienced from May through August.

If the rate of September job creation outlined by the Labor Department on Friday were to be sustained indefinitely, it would take another 17 months for the economy be back to its pre-pandemic levels of employment. That milestone would be reached in only eight months at August’s rate of job creation.

To make sense of where the economy stands on the verge of the election, it’s essential to keep a clear view of the distinction between three concepts: the level at which the economy is functioning, how fast it is improving, and whether that speed is accelerating or decelerating. And in a shambolic year, it’s not totally clear which of these concepts will matter most to voters, or how heavily the state of the economy will weigh on them at all.

The first is the equivalent to the level of the water in a bathtub; the second is whether it is filling up or being drained; the third is whether the spigot is being opened wider or closed. For the United States economy in the fall of 2020, the three measures are sending different signals:

The level of the bath water is very low. But it’s being filled rapidly. However, the spigot is being tightened so the pace at which the water is rising has slowed.

The level of economic activity is miserable. Seven months into the pandemic, most sectors of the economy are producing below — and in some cases far below — normal levels. The number of jobs on employers’ payrolls was 7 percent below February levels in September, a worse shortfall than at any point in the Great Recession. The share of the population working is only 56.6 percent, down from 61 percent a year ago and lower than it ever got during that downturn and its aftermath.

So if voters were to evaluate the Trump economy solely on how things are going as the fall of 2020 begins, it would be a harsh judgment.

If, by contrast, they were to look at the direction of the economy, things look quite good. Again, that 661,000 net jobs added — the job growth was particularly strong in health care and the retail sector — represents stronger job growth than in all but a handful of months in the modern record. Outside of this summer’s rebound, to find months of comparable improvement in the labor market, you have to go back to either a quirky month in 1983 or to the 1940s and 1950s.

So when the Trump administration points to a resurgent economy, it’s not untrue. But it’s incomplete. And that’s because of what’s happening to the rate of change.

After adding a remarkable 4.8 million jobs in June, as many companies reopened following the most intense phase of the coronavirus crisis, American employers have been slower to bring remaining workers back to their payrolls, with the number falling every month since.

The last few weeks have brought a wave of additional layoff announcements, including Disney’s plan to cut 28,000 theme park workers. Major airlines are poised to cut tens of thousands of jobs after the expiration of a provision requiring them to keep workers on their payrolls as a condition of bailout money.

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New Layoffs Add to Worries Over U.S. Economic Slowdown

The American economy is being buffeted by a fresh round of corporate layoffs, signaling new anxiety about the course of the coronavirus pandemic and uncertainty about further legislative relief.

Companies including Disney, the insurance giant Allstate and two major airlines announced plans to fire or furlough more than 60,000 workers in recent days, and more cuts are expected without a new federal aid package to stimulate the economy.

With the election a month away, an agreement has proved elusive. The White House and congressional Democrats held talks on Thursday before the House narrowly approved a $2.2 trillion proposal without any Republican support. It was little more than a symbolic vote: The measure will not become law without a bipartisan deal.

After business shutdowns in the early spring threw 22 million people out of work, the economy rebounded in May and June with the help of stimulus money and rock-bottom interest rates. But the loss of momentum since then, coupled with fears of a second wave of coronavirus cases this fall, has left many experts uneasy about the months ahead.

“The layoffs are an additional headwind in an already weak labor market,” said Rubeela Farooqi, chief U.S. economist for High Frequency Economics. “As long as the virus isn’t contained, this is going to be an ongoing phenomenon.”

The concern has grown as measures that helped the economy weather the initial contraction have wound down. The expiration of a $600-a-week federal supplement to unemployment benefits was followed by a 2.7 percent drop in personal income in August, the Commerce Department said Thursday.

In a separate report, the Labor Department said 787,000 people filed new applications for state jobless benefits last week. The total, not adjusted for seasonal variations, was a slight decline from the previous week, but continued to reflect the highest level of claims in decades.

The most recent layoffs are not included in that figure, nor will they be reflected in September data to be released by the department on Friday, the last monthly reading on the labor market before the election. The report is expected to show a continuing slowdown in hiring, with barely half of the spring’s job losses recovered, although there is more uncertainty than usual around the estimates.

“This doesn’t bode well for the economy,” said Gregory Daco, chief U.S. economist at Oxford Economics. “When you combine the layoffs with fiscal aid drying up, it points to very soft momentum in the final quarter of the year.”

Furloughs of more than 30,000 workers by United Airlines and American Airlines began Thursday after Congress was unable to come up with fresh aid for the industry, though the companies said they would reverse the cuts if Congress and the Trump administration reached an agreement. A $50 billion bailout in March obligated the carriers to hold off on job cuts through Oct. 1.

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Credit…Eve Edelheit for The New York Times
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Credit…Stephanie Keith for The New York Times

Allstate announced Wednesday that it would lay off about 3,800 employees to reduce costs. Those are about 8 percent of the roughly 46,000 employees Allstate had at the end of 2019.

Houghton Mifflin Harcourt, one of the country’s largest book publishers, said Thursday that it was cutting 22 percent of its work force, including 525 employees who were laid off and 166 who chose to retire. The company is a major supplier of educational books and materials, a business hit hard by school closings.

The Walt Disney Company said Tuesday that it would eliminate 28,000 jobs, mostly at theme parks in Florida and California. Many of the workers had been on furlough since the spring, but the company said it was making the cuts permanent because of “the continued uncertainty regarding the duration of the pandemic.”

Travel, entertainment, and leisure and hospitality employers have been among the hardest hit by the pandemic, and they continue to lag even as other areas of the economy have reopened. The American Hotel & Lodging Association, a trade group, said that without new stimulus legislation, 74 percent of hotels would lay off additional employees and two-thirds would be out of business in six months.

“We’re in a different phase of the recovery,” Mr. Daco of Oxford Economics said, and with demand for many companies’ services stuck below where it was before the pandemic, “businesses are left with no other choice but to reduce costs.”

Consumer spending on goods — whether for immediate consumption, like food, or used over a longer term, like appliances — now exceeds levels preceding the pandemic. But outlays for services, which account for roughly two-thirds of the nation’s economic activity, remain down about 8 percent.

The economic picture is not completely bleak. Personal spending was up 1 percent last month, and readings of consumer confidence have been gaining. Helped by low mortgage rates, the housing market is on a tear in much of the country, lifting employment in residential construction 2.1 percent from June to August, according to the Associated General Contractors of America.

But for many Americans, the easing of economic growth has meant an unexpected return to the ranks of the unemployed.

When the pandemic struck in March, Alex Stern was furloughed from his job as a publicist at a public relations firm in New York. He was called back in May after the agency, which works with companies in the food and beverage industry, received a loan through the federal Paycheck Protection Program.

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Credit…Michelle V. Agins/The New York Times

But the company struggled to stay afloat, and Mr. Stern was permanently laid off on Tuesday.

To pay the November rent, he will have to borrow money from his parents, he said. He is considering moving back to his childhood home in Pennsylvania until he can find a new job.

“I don’t want to leave New York, and it’s hard because I’m almost 30 years old and I don’t know what I’m going to do next in life,” Mr. Stern said.

Among those affected by the Disney cutbacks is Taisha Perez, 29, who had worked part time as a drummer at the Animal Kingdom Theme Park at Walt Disney World in Orlando, Fla., for nearly three years.

The job gave her both a steady source of income and time to pursue her passion, television acting. “It’s honestly my favorite job that I’ve ever had,” Ms. Perez said. “I loved putting a smile on people’s faces.”

When she was furloughed in mid-March after the pandemic hit, she thought she would be out of work for just a few weeks. But on Tuesday, a text message from her union representative told her that her job would not be coming back.

“I was just in shock,” she said. “I couldn’t believe it.”

Ms. Perez said she could pay her rent and utilities on the roughly $250 a week she receives in state unemployment benefits, but could not afford any extra expenses, like the car she needs after hers broke down in March.

For those like Ms. Perez who lost work earlier in the year, the end of the $600 federal unemployment supplement has added to financial hardships.

Joann Taylor, a 45-year-old catering coordinator at a McAlister’s Deli franchise in Houston, used to work about 30 hours per week. But when the pandemic hit, her boss put her in an on-call position for deliveries only.

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Credit…Todd Spoth for The New York Times

As a result, her hours were cut so severely — sometimes to two a week, or none at all — that she qualified for unemployment insurance, including $300 a week in Texas benefits before taxes.

But when the $600 weekly supplement expired at the end of July, Ms. Taylor began struggling to pay her monthly bills, including $1,240 in rent, $180 for electricity, a $240 car payment and $155 for auto insurance.

Determined to provide for her daughters, who are 6 and 14, she used the time while underemployed to get a license to sell life and health insurance. Now she’s looking for an agency to take her on, hoping for steadier income.

Until then, without further aid from Congress, Ms. Taylor is worried about paying the rent and buying groceries.

“I will have to go to every church around me and ask for help,” she said. “I will stand in food lines with the kids, because I cannot leave them at home. I will apply anywhere that I can for help, because there’s no way that I can allow us to be homeless.”

Reporting was contributed by Ben Casselman, Niraj Chokshi, Emily Cochrane, Alan Rappeport and Elizabeth A. Harris.

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Airlines, Facing a Slow Recovery, Begin Furloughing Thousands

When Congress gave passenger airlines a $50 billion bailout in March, industry executives hoped the aid would tide them over until the fall, when more people might be traveling and a vaccine might be closer at hand. Several months later, that hopeful future remains extremely murky.

With no recovery in sight and negotiations over another stimulus package at an impasse, United Airlines and American Airlines on Thursday began furloughing more than 32,000 workers. The companies said they would reverse the cuts if Congress and the Trump administration reached an agreement to extend more aid to the industry, but there has been little or no progress in those talks.

“I am extremely sorry we have reached this outcome,” Doug Parker, American’s chief executive, told employees in a letter late Wednesday. “It is not what you all deserve.”

Airlines were prohibited by the March stimulus law from undertaking major cuts to where they fly and whom they employ until Oct. 1. For months, unions have lobbied lawmakers for more money to postpone the day of reckoning, arguing that airlines are crucial to the economy, and help support other major employers like airports, hotels, car rental agencies and restaurants.

The campaign worked, but only to an extent. A bipartisan majority of lawmakers in the House of Representatives, at least 16 Republican senators and President Trump said they would be willing to offer another lifeline to the industry. But the effort stalled as Congress and the administration remained deadlocked on a broader aid package.

The Trump administration has for weeks been exploring ways to help the industry unilaterally, through executive actions or by repurposing unused money from the previous relief legislation. But officials have concluded that those options were not feasible. Treasury Secretary Steven Mnuchin has indicated that Congress would need to authorize the Treasury to redirect leftover funds, such as the money that was appropriated for backstopping Federal Reserve lending programs.

In theory, airlines could apply for some of the unused funds set aside for companies that are critical to national security, but the Department of Defense would have to certify that use and the money could come with onerous repayment terms. Even if the definition of national security were interpreted to include passenger airlines, it is not clear how quickly such funds could be disbursed and if the companies would be comfortable with the terms.

Mark Meadows, the White House chief of staff, said Wednesday that the Trump administration would like to see legislation that provides an additional $20 billion to help airlines pay workers for six months.

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Credit…Stephanie Keith for The New York Times

Anticipating a slow recovery, airlines this summer encouraged employees to volunteer for pay cuts, unpaid leave, buyouts and early retirement to reduce the need for furloughs. At United, employees who signed up for such programs helped reduce the number of furloughs from an expected 36,000 this summer to just over 13,000 by Thursday.

Amy Ticknor, a flight attendant who is among the 19,000 people American Airlines is furloughing, spent Thursday filing for unemployment insurance and taking care of her 6-week-old and 2-year-old daughters. She also started searching for a full-time job — her husband is self-employed and her job provided the family with health insurance.

Ms. Ticknor, who is also on the seventh week of a 10-week maternity leave, said she had been heartened by the lobbying efforts of her union, the Association of Professional Flight Attendants, but was disappointed when it became clear on Wednesday that a second round of federal funding was unlikely.

“It was devastating,” Ms. Ticknor, 29, said. “It was a real a blow to everything, my family life, my emotional well-being.”

Southwest Airlines and Delta Air Lines, the country’s other two large national airlines, have avoided sweeping furloughs because of temporary leave and other voluntary programs, at least for now. More than 40,000 Delta workers signed up for short- and long-term unpaid leave. The company has said that it may still furlough about 1,700 pilots next month. Nearly 17,000 employees at Southwest have signed up for leaves, buyouts or early retirement, and the company has said it won’t furlough any worker through the end of the year.

“They have very, very strong corporate cultures and I think those cultures were on exhibit in how these airlines have been able to avoid the furloughs,” said Henry Harteveldt, founder of Atmosphere Research Group, a travel analysis firm. “Delta and Southwest were able to message more effectively.”

American and United have each also taken out Treasury Department loans of more than $5 billion, which could grow to $7.5 billion each at the administration’s discretion. Southwest and Delta declined the loans, which were authorized by the March stimulus law, the CARES Act. Across the industry, airlines have raised billions from a variety of sources.

While the industry’s fortunes have improved since travel plunged more than 95 percent in April, the number of people screened at airports by the Transportation Security Administration on Wednesday was still down about 70 percent from a year earlier. Collectively, U.S. airlines are losing billions of dollars every month and the International Air Transport Association, which represents most airlines, this week downgraded its forecast for the year, saying it now expects traffic to fall 66 percent compared with 2019.

“A few months ago, we thought that a full-year fall in demand of 63 percent compared to 2019 was as bad as it could get,” Alexandre de Juniac, the group’s chief executive, said in a statement. “With the dismal peak summer travel period behind us, we have revised our expectations downward.”

Last week, John Grant, a senior analyst at OAG, an aviation data provider, said the outlook for the next few months is stark for major U.S. airlines because of fewer bookings and more travelers using vouchers for canceled reservations. Most analysts say it will take years for passenger traffic to return to 2019 levels.

That devastation has rippled outward. Boeing, which was already struggling because of the worldwide grounding of the 737 Max, has had to slash production across the board and is cutting its work force by more than 10 percent. On Thursday, it said it would consolidate production of the 787 Dreamliner, a wide-body jet designed for longer flights, to just one factory, in South Carolina, as the pandemic has sharply reduced the number of planes airlines are buying.

Alan Rappeport contributed reporting.

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Disney Lays Off 28,000, Mostly at Its 2 U.S. Theme Parks

LOS ANGELES — For six months, Disney has kept tens of thousands of theme park workers on furlough with full health-care benefits in hopes that a light at the end of the pandemic tunnel would appear. On Tuesday, Disney conceded that none was coming.

The company’s theme park division said it would eliminate 28,000 jobs in the United States. Theme parks will account for most of the layoffs, although Disney Cruise Line and Disney’s retail stores will also be affected.

“As heartbreaking as it is to take this action, this is the only feasible option we have in light of the prolonged impact of Covid-19 on our business, including limited capacity due to physical distancing requirements and the continued uncertainty regarding the duration of the pandemic,” Josh D’Amaro, chairman of Disney Parks, Experiences and Products, said in an email to “cast members,” Disney’s term for its theme park workers.

About 67 percent of the layoffs will involve part-time jobs that pay by the hour. However, executives and salaried workers will also be among those laid off. Disney’s theme parks in California and Florida employed roughly 110,000 people before the pandemic. The job cuts will come from both resorts.

Disneyland in California has remained closed because Gov. Gavin Newsom has not allowed theme parks in the state to restart operations. About 32,000 people work at the Disneyland complex and the majority are unionized and have been on furlough since April.

Mr. D’Amaro said in a statement that the layoffs were “exacerbated in California by the state’s unwillingness to lift restrictions that would allow Disneyland to reopen.” Disney held a virtual news conference on Sept. 22 in an attempt to pressure Mr. Newsom to lift restrictions. “The longer we wait, the more devastation to the Orange County and Anaheim communities,” Mr. D’Amaro said then. “It’s time.”

In a statement on Tuesday evening, Dr. Mark Ghaly, secretary of the California Health and Human Services Agency, said: “Without a vaccine it is impossible to eliminate the economic impacts caused by this virus.” By taking a “science-based approach” to reopening, he continued, “we can minimize the health and economic risks that would be caused by opening and shutting repeatedly.”

In Florida, where government officials have been much less restrictive, Walt Disney World reopened on a limited basis in mid-July. About 20,000 union workers, or roughly half of the resort’s unionized employees, were called back for the reopening. The remainder have stayed on furlough. (Disney World employed about 77,000 people in total before the pandemic.)

But attendance at Disney World has been weaker than Disney expected. In particular, families have not felt safe flying to Florida for vacation, according to travel agents. Families are also delaying visits because they don’t want to pay for Disney excursions when the experience remains limited — no fireworks, fewer dining options, no hugs from Mickey Mouse, shorter park hours — and they have to wear face masks.

So far, Disney’s zealous theme park safety procedures appear to be working. University epidemiologists and public health officials have said that — as far as they can tell — there have been no outbreaks among Disney workers or guests. Disney has declined to comment except to note that new infections in Florida have dropped sharply since Disney World reopened.

Revenue at Disney’s worldwide theme park division, which includes a still-closed cruise line and the Disney Store chain, totaled $1 billion in the most recent quarter, an 85 percent decline from the same period a year earlier. Operating profit plunged by $3.7 billion, resulting in a quarterly loss of $2 billion. Mr. D’Amaro said on Tuesday that the restructuring would create a more “effective and efficient operation when we return to normal.”

The rest of Disney has been bouncing back. Live sports returned to ESPN in August. Movie and television production has restarted, although Disney continues to postpone film releases. Disney+ has been growing rapidly enough to keep Disney’s stock price relatively high at $125, down 3 percent from a year ago.

Central Florida’s once-booming leisure and hospitality industry has been decimated by the pandemic. Unemployment in Orange County — home to Disney World, the Universal Orlando Resort, SeaWorld and dozens of mom-and-pop tourist attractions — stood at 11.6 percent in August, up from 3.1 percent in August 2019, according to the Florida Department of Economic Opportunity. Osceola County, which abuts Disney World to the south, had 15.1 percent unemployment in August, up from 3.5 percent.

Statewide, the August unemployment rate in Florida was 7.4 percent.

Universal Orlando laid off a steady stream of employees over the summer and recently notified state officials that about 5,400 workers had been placed on extended furlough. SeaWorld laid off 1,900 employees at its Orlando properties this month. A few days before its layoffs, SeaWorld surprised workers by altering its severance policy, moving to a discretionary system from a fixed formula based on tenure.

Workers at Universal and SeaWorld are not unionized.

“The layoffs and furloughs have been devastating,” said Mike McElmury, trustee of Teamsters Local 385, which represents about 5,000 Disney World bus drivers, laundry workers and entertainers, including those who greet visitors in costume as Disney characters. At least 2,000 were still on furlough as of Monday. “We’re at the point where people are having a hard time figuring out where they will get their next meal,” Mr. McElmury said.

Over the summer, Orlando unions created a weekly food bank for furloughed theme park workers. Eric Clinton, president of Unite Here Local 362, which represents roughly 8,000 Disney World ride operators, custodians, parking employees and vacation planners, said that the food bank was initially stocked to serve about 200 families. About 800 were provided with free groceries on Saturday, with the line stretching two miles, Mr. Clinton said.

Unite Here affiliates have spent more than $100,000 on the effort, in part by soliciting donations on its website.

Anaheim is in similarly rough shape. Disney had planned to reopen the property on July 17 with the same safety protocols as in Florida. But Disney abandoned that plan after unionized Disneyland employees told Mr. Newsom that they worried that Disney was moving too fast; Mr. Newsom threw the brakes on a regulatory process that would allow California theme parks to reopen.

Unemployment in Anaheim reached 15 percent in July, the most recent month for which data is available, up from 3.3 percent in July of last year. The Anaheim Chamber of Commerce said this month that Disneyland’s closure had cost local municipalities $1.3 billion in taxes and other revenue.

“It’s a disaster,” Harry Sidhu, Anaheim’s mayor, said at a news conference on Sept. 16 in which he pleaded with Mr. Newsom to allow Disneyland to reopen. Mr. Sidhu was joined by officials from nearby Garden Grove and Buena Park, home to the Knott’s Berry Farm theme park, which had 2019 attendance of roughly four million.

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Tell Us: How Is the Pandemic Affecting Youth Employment in Europe?

The youth unemployment rate across much of Europe surpassed 17 percent this summer, and is probably getting worse as the coronavirus regains force into a second wave. Despite furlough schemes and government measures that have temporarily kept tens of millions of people employed, a tsunami of layoffs is approaching Europe.

The Times would like to talk to people 25 and under across Europe who are facing a tight job market. Have you lost your job as a result of the outbreak, or are you having a difficult time finding work? Are you a student concerned about job prospects following graduation? How has Covid-19 affected your ability to enter the work force?

Statistics show the pandemic disproportionately affects communities of color and those of lower socioeconomic backgrounds. If you have a story to share about your circumstances, or about someone you know, we’d like to hear from you.

Please answer the questions below. A Times reporter or editor may contact you to hear more about your story.

Required fields are marked with an asterisk.

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