Jobless Claims Rise, Showing the Pandemic’s Economic Toll: Live Updates

The Avalon Cafe and Biscuit Bar in Detroit closed because of the pandemic. Conditions should improve in the coming months, economists say.
Credit…Elaine Cromie for The New York Times

The economy continues to slowly rebound from the worst of the pandemic, but claims for unemployment benefits remain high by historical standards, a sign of how long it will take for the job market to recover fully.

Initial jobless claims rose last week, the Labor Department reported Thursday, after a big drop in the previous week.

A total of 748,000 workers filed first-time claims for unemployment benefits in the week that ended Feb. 27, 32,000 higher than the week before. In addition, 437,000 new claims were filed for Pandemic Unemployment Assistance, a federal program covering freelancers, part-timers and others who do not routinely qualify for state benefits, a rise of 9,000.

Neither figure is seasonally adjusted. On a seasonally adjusted basis, new state claims totaled 745,000, an increase of 9,000.

Claims are lower than they were when coronavirus cases spiked early last year. With the virus easing since then in many places, some restrictions on business activity have been rolled back. That has helped the job market somewhat.

The increase in claims last week included a big jump in Ohio and Texas, as the latter recovered from severe winter storms last month.

“We knew there was some backlog in Texas and claims would likely go back up,” said Gregory Daco, chief U.S. economist at the forecasting firm Oxford Economics. “Despite expectations for record-breaking growth in 2021, the job market is still quite fragile.”

Gov. Greg Abbott of Texas said Tuesday that the state was lifting all restrictions on business and eliminating its mask requirement, moves that drew criticism from President Biden. Elsewhere, officials have been more cautious — in Chicago, parks and playgrounds reopened, while in Massachusetts, capacity restrictions on restaurants have been lifted.

“The labor market is continuing to gradually improve,” said Scott Anderson, chief economist at Bank of the West in San Francisco. “Job growth will accelerate, perhaps as soon as the second quarter, with decent gains in leisure and hospitality and travel.”

Even so, the number of new filers remains extremely high by historical standards, a sign of just how entrenched the pandemic remains one year after it first struck.

“We are still dealing with millions of unemployed Americans,” said Gus Faucher, chief economist at PNC Financial Services Group. “It’s going to take a long time to get back to normal, but job growth will be stronger as we head into the spring.”

What did Jay-Z and Jack Dorsey talk about when they went yachting around the Hamptons together last summer? Perhaps only Beyoncé knows.

Maybe now we do, too. Square, the mobile payments company led byMr. Dorsey, announced on Thursday its plan to acquire a “significant majority” of Tidal, the streaming music service owned by Jay-Z and other artists — including Beyoncé, Jay-Z’s wife, and Rihanna, who is a client of Jay-Z’s entertainment management company, Roc Nation.

Square will pay $297 million in stock and cash for the stake in Tidal. Jay-Z will join Square’s board.

Credit…Sam Hodgson for The New York Times
Credit…Anushree Fadnavis/Reuters

The announcement comes less than two weeks after Jay-Z announced that he would sell 50 percent of his champagne company, Armand de Brignac — better known as Ace of Spades — to LVMH Moët Hennessy Louis Vuitton amid a downturn in the entertainment industry caused by the pandemic that has affected some of Jay-Z’s holdings.

“I think Roc Nation will be fine,” Jay-Z said in an interview last month about the sale of Armand de Brignac. “Like all entertainment companies, it will eventually recover. You just have to be smart and prudent at a time like this.”

Also last month, Mr. Dorsey, who is also the chief executive of Twitter, announced that he and Jay-Z had endowed a Bitcoin trust to support development in India and Africa.

Tidal, which Jay-Z bought in partnership with other artists in 2015 for $56 million, provides members access to music, music videos and exclusive content from artists, but the streaming music industry has been dominated by competitors like Spotify, Apple and Amazon.

In 2017, Jay-Z sold 33 percent of the company to Sprint for an undisclosed amount. (After a merger, Sprint is now a part of T-Mobile.) Earlier this week, Jay-Z bought back the shares from T-Mobile, and most will be sold to Square as part of the deal.

Mr. Dorsey and Jay-Z began to discuss the acquisition “a few months ago,” said Jesse Dorogusker, a Square executive who will lead Tidal on an interim basis.

“It started as a conversation between the two of them,” he said. “They found that sense of common purpose.”

Mr. Dorogusker said Square, which was founded in 2009, will offer financial tools to help Tidal’s artists collect revenue and manage their finances. “There are other tools they need to be successful and that we’re going to build for them,” he said.

Apollo Global Management, a private equity firm, is acquiring the Venetian resort in Las Vegas, citing increased bookings for trips to Las Vegas.
Credit…Ethan Miller/Getty Images

Almost a year ago, on March 11, the World Health Organization officially declared that the spread of the coronavirus was a pandemic. Lockdowns and social distancing soon became a fact of life, and companies that rely on people gathering and moving around were hit hard.

But in recent weeks, many of these businesses have said they see signs that people are preparing to go out again: to the office, on vacation and elsewhere. Taken together, the DealBook newsletter notes, these indicators suggest that a reopening might be around the corner, as vaccines roll out, the weather changes or people simply seek out something new after so long in isolation. (Scientists say that people should be careful even after being vaccinated.)

Apparel. Richard Hayne, the chief executive of Urban Outfitters, told investors this week that its brands had recently been selling more “going out-type apparel.” In the last week of February, seven of Anthropologie’s top 10 sellers online were dresses, which may suggest that shoppers are preparing for life beyond Zoom. “Over the past year, we were lucky if they included one or two dresses,” Mr. Hayne said.

Concert tickets. “We’re feeling more optimistic than we were a month ago,” Live Nation’s chief executive, Michael Rapino, said on an earnings call last week. When the company recently released nearly 200,000 tickets for summer music festivals in Britain, they sold out in days.

Trips to Vegas. Tom Reeg, the chief executive of the casino giant Caesars Entertainment, told analysts that bookings were up 20 percent month on month. “It’s almost like a switch was flipped sometime late January, early February,” he said last week. Apollo Global Management’s co-head of private equity, David Sambur, cited these numbers when explaining the firm’s big bet on a Las Vegas recovery: the $6.25 billion acquisition of the Venetian casino and expo center announced on Wednesday.

Cruise bookings. Royal Caribbean’s chief executive, Michael Bayley, recently told investors that the company recorded a 30 percent jump in new bookings this year, compared with the last two months of 2020. A large share are people over 65, who are counting on being vaccinated soon, Mr. Bayley suggested. The company, which suspended most cruises through April, began a $1.5 billion stock sale this week.

Gym memberships. January was the first month that Planet Fitness saw a net increase in memberships since the pandemic began, according to Chris Rondeau, the gym chain’s chief. The uptick “reinforces our belief that people want to return to bricks-and-mortar fitness,” he told analysts.

But not movie tickets (yet). Alamo Drafthouse filed for bankruptcy on Wednesday, making it one of the most prominent movie chains to seek Chapter 11 protection during the pandemic. Still, it expressed some optimism, “because of the increase in vaccination availability, a very exciting slate of new releases and pent-up audience demand,” said Tim League, the company’s founder.

The Federal Reserve chair, Jerome H. Powell, has said the central bank would not cut support for the economy anytime soon. 
Credit…Pool photo by Susan Walsh

The market conniptions of recent days are a direct result of several developments that point to the brightening prospects of economic recovery. Vaccinations are rising, retail sales and industrial production have been surprisingly solid and, perhaps most important, the Biden administration is expected to push its $1.9 trillion stimulus plan through Congress in the coming days.

One clear consequence is expected to be strong growth. Wall Street economists now expect output to rise by nearly 5 percent in 2021. Such robust growth — it would be the best year for the economy since 1984 — would seem like a good thing for stocks.

But growth brings with it the possibility of rising inflation, which in turn could prompt the Federal Reserve to raise interest rates — and that’s what investors are reacting to, with different consequences for the stock and bond markets, Matt Phillips reports for The New York Times.

Few economists see a significant risk of runaway inflation, but investors say that the mere possibility of painful price growth might drive the Fed to raise interest rates to tamp down the economy.

That would be bad for bond owners. If the Fed raised rates, rates around the bond market would climb. Then the price of bonds that investors hold would have to fall until they produced yields that were comparable to the new, higher rates in the market.

In expectation of that, investors are demanding a higher return now in the form of a higher yield on their…

Read More: Jobless Claims Rise, Showing the Pandemic’s Economic Toll: Live Updates

2021-03-04 14:15:33

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