Here’s what you need to know:
- Facebook is planning to let some employees work from home permanently.
- This is a ‘downturn without modern precedent,’ the Fed chair says.
- Jobless claims reach 38.6 million in nine weeks.
- Flying over the holiday weekend? Expect lots of changes.
- Republicans remain noncommittal on more aid as millions more file for unemployment.
Facebook is planning to let some employees work from home permanently.
Facebook will allow many of its employees to work from home permanently, Mark Zuckerberg, Facebook’s chief executive, announced during a staff meeting that was live-streamed on his Facebook page.
The social media giant sent its employees home in March as the coronavirus began to spread in the United States. Mr. Zuckerberg said that the temporary changes caused by the virus spurred the company to re-evaluate its requirement that employees work in a shared office. Within a decade, he said, as many as half of the company’s more than 45,000 employees would work from home.
Facebook will begin by allowing new hires who are senior engineers to work remotely, and then allow current employees to apply for permission to work from home if they have positive performance reviews.
Mr. Zuckerberg’s announcement followed similar decisions at Twitter and the payments company Square, both led by Jack Dorsey. Mr. Dorsey said last week that employees at his companies would be allowed to work from home indefinitely. At Google, employees have been told they can work from home through the end of the year.
This is a ‘downturn without modern precedent,’ the Fed chair says.
Jerome H. Powell, the chair of the Federal Reserve, and other top central bank officials warned on Thursday that the United States was experiencing an exceptional shock in the coronavirus pandemic, and that it was wildly unclear when and how low unemployment and widespread prosperity would return.
The United States economy is in a “downturn without modern precedent,” Mr. Powell said, a few hours after government data showed that another 2.4 million people filed new unemployment claims last week.
“In the best of times, predicting the path of the economy with any certainty is difficult,” he added. “We are now experiencing a whole new level of uncertainty, as questions only the virus can answer complicate the outlook.”
The Fed chief’s comments underscored a point his colleagues made repeatedly across a series of speaking engagements on Thursday: The path to recovery is not obvious as the economy and job market absorb the biggest shock in generations. Against that backdrop, several said, both Fed policymakers and those in Congress and the White House should be prepared to do more if needed.
“Depending on the course the virus takes and the depth and duration of the downturn it causes, additional support from both monetary and fiscal policies may be called for,” Richard H. Clarida, the Fed’s vice chair, said during an event earlier in the day.
Jobless claims reach 38.6 million in nine weeks.
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Even as restrictions on businesses began lifting across the United States, another 2.4 million workers filed for jobless benefits last week, the government reported Thursday, bringing the total of new claims to more than 38 million in nine weeks.
“The hemorrhaging has continued,” Torsten Slok, chief economist for Deutsche Bank Securities, said of the mounting job losses. He expects the official jobless rate for May to approach 20 percent, up from the 14.7 percent reported by the Labor Department for April.
A recent household survey from the Census Bureau suggests that the pain is widespread: Forty-seven percent of adults said they or a member of their household had lost employment income since mid-March. Nearly 40 percent expected the loss to continue over the next four weeks.
And there is increasing concern that many jobs are not coming back, even for those who consider themselves laid off temporarily.
Nicholas Bloom, a Stanford University economist who is a co-author of an analysis of the pandemic’s effects on the labor market, estimates that 42 percent of recent layoffs will result in permanent job losses. “I hate to say it, but this is going to take longer and look grimmer than we thought,” he said of the path to recovery.
Flying over the holiday weekend? Expect lots of changes.
Airports this Memorial Day weekend are likely to be far emptier than usual, but people who are planning to fly will find lots of changes to every part of the screening process.
At security lines, signs and other markings will remind passengers to keep their distance. The Transportation Security Administration said Thursday that its agents would wear masks, gloves and, in some cases, eye protection. Passengers will be asked to scan their own boarding passes and place any food in their luggage in a separate bin during screening to limit cross contamination.
“In the interest of T.S.A. front line workers and traveler health, T.S.A. is committed to making prudent changes to our screening processes to limit physical contact and increase physical distance as much as possible,” David Pekoske, the agency’s administrator, said in a statement.
Most normal rules remain in place, but the T.S.A. said it would relax one: Passengers will now be allowed to bring up to 12 ounces of hand sanitizer with them on their journey.
Airlines are also making changes. Travelers who need to check a bag or print a ticket, for example, might find a sneeze guard separating them from a ticketing agent, a precaution being taken in some locations by United Airlines and Delta Air Lines. If they opt to use a kiosk instead, passengers may end up interacting with one that works without any need for contact at all.
Republicans remain noncommittal on more aid as millions more file for unemployment.
With another 2.4 million workers filing new claims for unemployment benefits last week, attention is again turning to whether Washington will provide additional aid to those struggling amid the pandemic.
The answer, for now, is maybe.
It remains unclear whether lawmakers will agree to extend enhanced unemployment benefits that were included in the $2 trillion stimulus package passed in March, which provides an additional $600 per week to workers who file for unemployment.
That enhanced benefit expires at the end of July and House Democrats included a provision in the $3 trillion stimulus bill it passed on Friday to extend it through January 2021.
But Republicans have rejected that measure, along with the entire House bill, and do not plan to vote on it in the Senate. They have raised concerns that the higher benefit creates a disincentive to work.
In a private phone call with House Republicans Wednesday afternoon, Senator Mitch McConnell of Kentucky, the majority leader, vowed that Republicans would “clean up the Democrats’ crazy policy that is paying people more to remain unemployed than they would earn if they went back to work.”
Democrats have repeatedly slammed Republicans for what Senator Chuck Schumer of New York, the minority leader, referred to on Thursday as a “staggering” level of inaction on coronavirus legislation.
The Atlantic lays off 17 percent of its staff.
The Atlantic will lay off 68 workers across “events, sales, and editorial,” David G. Bradley, the chairman of Atlantic Media, said in a staff email on Thursday, as the publication struggles with the same forces — mostly a drop in digital advertising — that have affected tens of thousands of jobs in news media during the coronavirus crisis even as it has experienced a sharp rise in subscribers.
Those laid off represent 17 percent of the total staff, The Atlantic said in a statement. Executives will have their pay cut, and there will be general pay freezes.
A long-term strategic pivot to a business model that relies predominantly on reader revenue, Mr. Bradley said, “is accelerated — and made necessary — by the overnight and near-complete undoing of in-person events and, for now, a bracing decline in advertising.”
The Atlantic instituted an online paywall last year, and has since added 160,000 new subscribers, Mr. Bradley said. More than 90,000 of those have been added since March. The magazine, which is 163 years old and was once edited by Ralph Waldo Emerson, has drawn widespread praise for its coverage of the pandemic.
Three years ago, Mr. Bradley sold a majority stake in Atlantic Media to Emerson Collective, the organization founded by the billionaire Laurene Powell Jobs.
Victoria’s Secret plans store closures while Bath & Body Works sees a surge in sanitizer sales.
L Brands, which owns Bath & Body Works and Victoria’s Secret, reiterated its commitment to separating the two companies on Thursday and said that Victoria’s Secret would close 250 stores in the United States and Canada this year, cutting its fleet to about 850 locations.
The company said on an earnings call on Thursday that it anticipated that there would be more Victoria’s Secret store closures next year and in 2022. Bath & Body Works is closing some stores, but it is also reopening others, as it works to exit certain “at-risk mall properties.”
Victoria’s Secret, which saw its planned sale to a private equity firm fall apart this month, had nearly half of its sales erased in the first quarter of this year. Bath & Body Works’ sales declined by 18 percent in that time.
Bath & Body Works was a bright spot, however, with an 85 percent surge in digital sales driven by outsize demand for hand sanitizer and soap. The brand said on an earnings call that it had scrambled to keep up with the rapid purchasing of sanitizer both online and in stores.
Macy’s reports a 45 percent drop in sales.
Macy’s, one of the biggest department store operators in the United States, reported preliminary first-quarter net sales of roughly $3 billion, a 45 percent drop from the same period last year, and an operating loss of as much as $1.1 billion. The company shared the figures on Thursday ahead of a full release of its first-quarter results on July 1.
The company, which also owns Bloomingdale’s and Bluemercury, said that March was “very tough” but that its digital business exceeded expectations in April.
Macy’s, which has announced an ambitious plan to reopen all of its 775 stores by the end of June, said on Thursday that its plan was on track, and that it had already opened 190 Macy’s and Bloomingdale’s locations. It anticipated opening 80 more Macy’s stores before this weekend.
Macy’s initially expected as little as 15 percent of its typical business in reopened stores, but “it’s coming in stronger than that,” Jeff Gennette, the company’s chief executive, said during a presentation on Thursday. The business is down about 50 percent in reopened stores, and improves with each week the store is open, he said.
Mr. Gennette added that outside of digital sales, it has found new success with curbside pickup, and has been working with New York to add the service at its flagship store in Herald Square in coming weeks.
Macy’s plans to offer another business update on June 9 before it formally reports first-quarter results.
Wall Street dips as global markets cool.
Stocks on Wall Street fell on Thursday, pulling back after major benchmarks had rallied the day before.
The S&P 500 fell less than 1 percent, and global benchmarks were also lower.
It’s been a turbulent week for markets, with shares alternating between gains and losses each day so far as investors assessed new economic developments and the prospect of businesses reopening their doors to customers.
On Thursday, data on jobless claims from the Labor Department showed that the surge of layoffs had reached more than 38 million in nine weeks.
But economic data from Europe provided more optimism. A monthly flood of European purchasing managers’ index reports showed business activity slowly picking up: The eurozone manufacturing index came in at 39.5 points, higher than expected and up from 33.4 last month, while the services index rose to 28.7, from 12.0 last month.
The numbers for Britain also showed an upswing: The manufacturing index reached 40.6, up from 32.6 past month, and the services sector reached 27.8, up from 13.4.
In Asia, monthly trade figures in Japan showed a nearly 22 percent fall from a year ago, underscoring the weakness of demand for the goods that the country’s factories make. Heated rhetoric in Washington against China raised the prospect that relations between the world’s two biggest economies would deteriorate further. Investors also worried about worsening tensions between China and Australia, a country that depends on Chinese demand to fuel big parts of its economy.
Catch up: Here’s what else is happening.
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Lululemon, the athleisure company known for its $100 yoga pants, said that it expected to have 70 percent of its stores reopened in coming weeks with new safeguards in place. It plans to add cashless payments “where permissible” and ask staff to “state a daily health declaration before every shift.” The company, which had 491 stores worldwide as of Feb. 2, said that it has reopened 150 locations and is set to reopen 200 more during the next two weeks. The company declined to share details what constituted the health declaration or about specific openings in the United States.
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Best Buy said on Thursday that its first quarter sales fell 6.3 percent to $8.6 billion as it posted a net profit of $159 million. The chain benefited as consumers sought “work or learn from home” products, as well as gaming merchandise. Domestically, its comparable online sales surged 155 percent from last year. The retailer said it switched to curbside-only service on March 22, halfway through the quarter, as a safety measure, and that it retained about 81 percent of last year’s sales in the last six weeks of the quarter, which ended May 2.
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TJX, the owner of T.J. Maxx, Marshalls and HomeGoods, said its sales fell 52 percent to $4.4 billion in the first quarter because of store closings, pushing the company to a net loss of $887 million. But the off-price retailer said it was encouraged by “very strong sales” as it started to resume business. The company has fully or partially reopened stores in 25 states, and anticipates that most of its locations could be reopened by the end of June, based on government guidance.
Reporting was contributed by Jeanna Smialek, Kate Conger, Emily Cochrane, Niraj Chokshi, Geneva Abdul, Jack Nicas, Patricia Cohen, Marc Tracy, Mohammed Hadi, Sapna Maheshwari, Alexandra Stevenson, Cao Li, Carlos Tejada, Katie Robertson, Daniel Victor and Kevin Granville.
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May 22, 2020 at 06:42AM
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Many Facebook Employees to Work From Home Permanently: Live Updates - The New York Times
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