Friday, November 27

Unemployment Claims Expected to Remain High: Live Updates


Credit…Don Emmert/Agence France-Presse — Getty Images

American Airlines, Southwest Airlines and Alaska Airlines said their operating revenues were down about 70 percent in the three months through September compared to the same period last year, as the industry braces for a slow holiday season. American lost $2.4 billion over the quarter, while Southwest lost more than $1.1 billion and Alaska lost more than $430 million.

Air travel has improved somewhat steadily since early summer and reached a symbolic milestone on Sunday, when more than 1 million people were screened at federal airport checkpoints for the first time since March. But passenger volumes across major U.S. airlines are still down about 65 percent from last year, according to the industry group Airlines for America, and are expected to remain deeply depressed for the foreseeable future.

“Until we have widely-available vaccines and achieve herd immunity, we expect passenger traffic and booking trends to remain fragile,” Southwest’s chief executive, Gary C. Kelly, said in a statement. Doug Parker, American’s chief executive, agreed: “We have a long road ahead.”

Southwest also said it would start filling planes to capacity again starting Dec. 1, after capping seats in the spring. Delta Air Lines is expected to stop blocking off middle seats in the first half of next year, its chief executive said last week. United Airlines and American are not limiting seats.

Flights in the United States are carrying an average of about 74 passengers each, down from about 99 last year, according to Airlines for America. Carriers are losing about $200 million per day; those losses are expected to shrink but will continue through the winter and into next year. American said it ended September with nearly $14 billion in cash and other available liquidity, while Southwest had more than $15 billion.

Airlines have survived the sustained slowdown by tweaking operations, making last-minute changes to flight schedules to match demand and slashing costs, largely by encouraging tens of thousands of industry workers to take buyouts or pay cuts. This month, United and American furloughed more than 32,000 workers. With hopes of a second federal stimulus seemingly dashed, the industry will have to make do with less as it prepares for what is widely expected to be a dismal winter.

Credit…Sarahbeth Maney for The New York Times

The government reported on Thursday that 757,000 workers filed new claims for state unemployment benefits last week, a drop of 73,000 from the previous week but still a stubbornly high rate as the incipient economic recovery struggles to maintain a foothold.

Another 345,000 new claims were filed under a federal jobless program that provides benefits to freelancers, part-time workers and others during the pandemic. Neither figure is seasonally adjusted.

On a seasonally adjusted basis, new state claims totaled 787,000.

The latest evidence of continuing stress in the labor market comes as coronavirus cases are again surging in the United States and as a second round of federal relief faces opposition from Senate Republicans over a possible $2 trillion price tag.

“The claims remain very elevated, and the lack of continuing fiscal aid for the unemployed is going to weigh on consumer attitudes and consumer spending,” said Kathy Bostjancic, chief U.S. financial economist at Oxford Economics. “It’s a very painful reality for those households who were relying on it.”

Seven months into the pandemic, the nature of the job losses is changing. The hope that business interruptions would be brief and that most laid-off workers would quickly be rehired has faded. Every week, more Americans join the ranks of the long-term unemployed, defined as those out of work for more than 27 weeks.

“We’re in a new phase of jobless claims,” said Ernie Tedeschi, managing director and policy economist for Evercore ISI. “More and more people are exhausting their initial 26 weeks of state unemployment.”

Workers no longer eligible for state unemployment insurance can still receive 13 weeks of benefits under the federal Pandemic Emergency Unemployment Compensation program. As a result, some reductions in state jobless rolls may not mean that people are back at work, but rather that they have shifted to the federal program, Mr. Tedeschi said.

The report will attract particular attention because it may hint at October’s unemployment rate, since the counting overlapped with the Labor Department’s monthly job survey.

Credit…Johanna Geron/Reuters

The pandemic-fueled boom in online shopping has been accompanied by a spike in complaints about scams originating on social media, especially Facebook and Instagram, according to the Federal Trade Commission.

Reported losses from such fraud reached a record high of nearly $117 million in the first six months of 2020, compared with $134 million in all of 2019, the F.T.C. said on Wednesday. The top sources of complaints were e-commerce sites that never delivered goods to consumers, many of whom said they had found the sites through Facebook or Instagram, which Facebook owns.

“These scam ads look real and can be carefully targeted to reach a particular audience,” the trade commission said in a report. “The scammers can delete comments on their ads or posts so that negative responses don’t show up and alert people to the con.”

People also reported losing money through so-called romance scams, in which fraudsters develop online relationships with people to obtain money from them, and through social media messages that offer “supposed economic relief or income opportunities,” the F.T.C. said.

The overall number of reports that people lost money to scams starting on social media in the second quarter more than tripled from a year earlier.

Credit…John Taggart for The New York Times
  • U.S. stock futures indicated that indexes on Wall Street would trade lower when markets opened on Thursday, following a decline yesterday. European markets fell and Asian stock indexes ended the day mixed.

  • The Stoxx Europe 600 index fell 0.5 percent before paring some losses. Germany’s DAX and Britain’s FTSE 100 dropped 0.1 percent, while France’s CAC index wavered between gains and losses.

  • U.S. jobless data released Thursday showed that new weekly claims dipped below 800,000 last week, a drop from the previous week but still a high rate.

  • The possibility of a deal on a stimulus package before the U.S. presidential election appeared to get slimmer on Wednesday, after President Trump said on Twitter that he didn’t see a way senior Democrats would let it happen. However, the talks are continuing.

  • Tesla’s share price rose more than 5 percent in premarket trading, after the electric car company reported on Wednesday a profit for the fifth consecutive quarter, putting it on track to report its only annual profit since its founding in 2003.

  • European government bonds fell and their yields rose on Thursday, after the first sale of the bloc’s new bonds that will be used to fund pandemic economic relief. The European Commission sold 17 billion euros ($20 billion) in 10-year and 20-year bonds, the first of a series of issues that will raise a total of €900 billion during the next five years.

  • American Airlines, Southwest Airlines and Alaska Airlines reported Thursday that their operating revenue fell about 70 percent in the three months that ended in September. The stock of Southwest rose slightly in premarket trading, but shares in American and Southwest declined.

  • IAG, the owner of British Airways and Iberia, said on Thursday that its revenue was down by more than 80 percent in the third quarter compared with a year ago and the planes were only about half full. The airline group also said that it would further cut capacity for the rest of the year to just 30 percent of last year’s capacity, and so wouldn’t break even in its cash flow from operating activities. IAG’s shares fell 13 percent at the start of trading, before reversing those losses.

A pension fund for Pennsylvania teachers said it had frozen new investments with Apollo Global Management amid concerns about ties between its founder, Leon Black, and Jeffrey Epstein.

The $63 billion Pennsylvania Public School Employees’ Retirement System said it spoke with Apollo officials last week after a New York Times report detailed the financial ties between the two men. Mr. Black made at least $50 million in payments and donations to entities affiliated with Mr. Epstein in the years after Mr. Epstein’s 2008 conviction for soliciting prostitution from a teenage girl.

Mr. Black has said the fees he paid were for services such as estate planning and philanthropic advice. In a letter to investors after the report was published, Mr. Black said he had “never tried to conceal” the work Mr. Epstein had done for him. Mr. Black and Apollo said Mr. Epstein did no work for the firm.

On Tuesday, an Apollo spokeswoman said that the investment firm’s board had retained the law firm Dechert to conduct an independent review of the dealings between Mr. Black and Mr. Epstein. Mr. Black has said he would cooperate with all legal inquiries.

The pension fund had initially been planning to meet with Apollo officials this week, but moved up the meeting after reading the Times report and Mr. Black’s letter, said Steve Esack, a spokesman for the retirement system.

“After that October 13th phone conversation, P.S.E.R.S.’s investment team informed Apollo that it will not consider any new investments at this time,” Mr. Esack said in an email. The retirement system “is closely following the ongoing legal issues and the newly launched internal Apollo investigation,” he said.

That means the fund’s existing investments with Apollo, worth $918 million, will remain intact and gradually decline as the projects they financed are completed and the money is returned to the teachers’ pension fund. Pension fund commitments to private equity vehicles typically last for a number of years.

Other public pension funds that work with Apollo have not gone so far as to freeze investments.

Rob Maxwell, a spokesman for the Texas teachers’ retirement system, said that fund had already been in touch with Apollo and was “closely monitoring the activities that the firm and its board are taking.”

Wayne Davis, a spokesman for the California Public Employees’ Retirement System, said the fund called Apollo last week about Mr. Black’s relationship with Mr. Epstein and would continue to monitor the situation. The system expects its outside investment managers “to follow the same core values of integrity and accountability that guide our own investment decision-making,” Mr. Davis said.

A spokesman for the Illinois teachers’ pension system, David Urbanek, said it was “going to monitor this situation very closely as it continues to unfold,” but the trustees responsible for selecting and monitoring outside investment managers had not yet discussed the matter.

A spokeswoman for Scott Stringer, the New York City comptroller who sits ex officio on the boards of pension funds serving teachers and other workers, said, “We are troubled by these reports, and we are closely monitoring the situation in accordance with our fiduciary duty and to protect the interests of our pensioners.”

Shares of Apollo were up 2.6 percent on Wednesday, but are still down more than 12 percent since Oct. 12.

Credit…Etienne Laurent/EPA, via Shutterstock
  • Quibi, the beleaguered short-form content company started by Jeffrey Katzenberg and Meg Whitman, announced on Wednesday that it was shutting down just six months after the app became available, despite raising a combined $1.75 billion in cash from Hollywood studios, the Chinese e-commerce giant Alibaba and other investors. Ms. Whitman said that while the company had “enough capital to continue operating for a significant period of time, we made the difficult decision to wind down the business, return cash to our shareholders and say goodbye to our talented colleagues with grace.”

  • Tesla on Wednesday reported a profit for the fifth consecutive quarter, putting it on track to report its only annual profit since its founding in 2003. Tesla said it made $331 million, or 27 cents per share, in the three months that ended in September. The company delivered 139,600 cars in the third quarter. That was a roughly 50 percent increase from the second quarter, when sales and production were severely hampered by the coronavirus pandemic. It produced 145,000 vehicles, and had revenue of $8.7 billion.

Credit…Michelle Gustafson for The New York Times

John Michael Purdon is temporarily working as a substitute teacher near his home in Barnegat, N.J., but that was not the plan. Mr. Purdon, 22, graduated in April from the University of Pittsburgh and expected to be in a nursing residency at the Children’s Hospital of Philadelphia, “but right now, hospitals don’t have the money.”

On June 1, before he found the teaching gig, he applied for unemployment benefits. They didn’t arrive until the end of August, he said.

In his view, the economy is faltering in part because of the government’s mismanagement of the coronavirus pandemic. “I’m a health care professional myself,” he said, and “certain things were overlooked in trying to rush the economy back too quickly.”

Mr. Purdon voted for President Trump in 2016 but said he had already cast a vote for Mr. Trump’s 2020 opponent, Joseph R. Biden Jr.

States around the country, overwhelmed by applications, have struggled to deliver benefits to laid-off workers.

California, which had reported the highest number of claims, stopped accepting new claims for several weeks while it revamped its system to whittle down the backlog and to institute fraud-prevention measures.

The Labor Department’s report on jobless claims, which aims to summarize information provided by the states, is the best official accounting available, but it is a flawed estimate. During California’s hiatus, for example, officials used the last reported figure as a place holder.

States also have different accounting methods, some applicants may be double counted, and there have been reports of widespread fraud — particularly in the federal Pandemic Unemployment Assistance program, which Congress approved in March for freelancers, the self-employed and others ordinarily ineligible for state benefits.

This week, the Justice Department said it had brought 12 cases of fraud or money laundering related to unemployment insurance. State prosecutors have also brought cases.



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