Here’s what you need to know:
Economists expect record number of jobless claims in U.S.
Millions of Americans lost jobs last week as the coronavirus ripped through the U.S. economy.
How many millions? Government data being released at 8:30 a.m. — last week’s filings for new claims for unemployment insurance — will provide at least a partial answer, and economists expect it to be the highest figure ever.
Last week Goldman Sachs forecast a total of 2.25 million. More recently the Economic Policy Institute, a left-leaning research institute that tracked public reports, put the number at 3.4 million. And Citigroup economists estimated that it could reach four million. Anything in that range would be far higher than the existing record of 695,000 new claims, from October 1982.
As staggering as the figure is likely to be, it will almost certainly understate the problem. Gig workers, independent contractors and the self employed don’t qualify for unemployment benefits, although the emergency aid package being considered by Congress will broaden eligibility. The sudden rush of layoffs led to jammed phone lines and overwhelmed computer servers at unemployment offices across the country, leaving many people unable to file claims.
All in all, the upheaval far surpasses anything seen in the 2007 to 2009 economic descent that has come to be known as the Great Recession.
“Where we maybe had eight months to prepare heading into the recession, we had five days to respond to coronavirus,” said Cher Haavind, an official with the state office that oversees the filing process in Colorado.
European stocks fall despite progress with U.S. rescue package.
European stocks were trading lower on Thursday, even after lawmakers in Washington advanced a highly anticipated $2 trillion rescue package to bolster the American economy.
Major markets lost about 2 percent by midmorning in Europe, after a mixed day of trading in Asia. Futures markets were predicting Wall Street would open lower too.
Investors had already bid up shares in previous days after the United States began preparing a spending and support plan to help households and companies cope with the coronavirus outbreak. The Senate passed it late on Wednesday, and it was expected to get approval by the House and President Trump shortly after.
But questions remain about the timing of the support plan and whether lawmakers should do even more, and that left investors nervous. Prices for longer-term U.S. Treasury bonds were up, sending yields lower and suggesting investors were looking for safe places to park their money. Oil prices, a proxy for the outlook for the world economy because they indicate demand for fuel, fell on futures markets.
In Asia, Japanese stocks fell strongly after authorities announcement more confirmed coronavirus infections there, and the Nikkei 225 index fell 4.5 percent.
Other markets moved modestly. Hong Kong’s Hang Seng Index was down 0.7 percent. South Korea’s Kospi index fell 1.1 percent despite the country’s central bank announcing further action to keep its economy supplied with money.
An F.A.Q. on the stimulus bill and your pocketbook.
How much money will individuals get — and how will it be distributed? How are unemployment benefits changing? Are gig workers included?
The Senate unanimously passed a $2 trillion economic stimulus plan on Wednesday that will offer assistance to tens of millions of American households affected by the coronavirus. Its components include payments to individuals, expanded unemployment coverage that includes the self-employed, loans for small businesses and nonprofits, temporary changes to withdrawal rules from retirement accounts, and more.
The House of Representatives was expected to quickly take up the bill and pass it, sending it to President Trump for his signature.
We collected answers to common questions about what’s in the bill.
Trump weighs postponing tariff payments to help businesses.
The Trump administration is considering postponing tariff payments on some imported goods for 90 days, according to people familiar with the matter, as it looks to ease the burden on businesses hurt by the coronavirus pandemic.
Some businesses and trade groups have argued that the levies President Trump imposed on foreign metals and products from China before the outbreak continue to raise their costs and weigh on their profits as the economy is slowing sharply. But even after the global pandemic hit the United States, Mr. Trump and his advisers have denied that cutting tariffs would be one of the measures they would undertake to buoy the economy.
The White House now appears to be considering a proposal that would defer tariff duties for three months for importers, though it would not cancel them outright. The administration’s consideration of a deferral was reported earlier by Bloomberg News.
It is not clear which tariffs the deferral might apply to, or if the idea will ultimately be approved. But the proposal appears to be separate from a plan announced on Friday by the U.S. Customs and Border Protection that it would approve delayed payment of duties, taxes and fees on a case-by-case basis.
European leaders ditch frugality and respond atypically quickly.
The coronavirus pandemic sweeping the globe with lethal and wealth-destroying consequences has proved so jarring to the powers-that-be on the European side of the Atlantic that they have discarded deep-set taboos to forge atypically swift and pragmatic responses.
“This pandemic is really like a war,” said Maria Demertzis, an economist and deputy director of Bruegel, a research institution in Brussels. “In a war, you do what you have to do.”
The British prime minister, from the party of Margaret Thatcher, has effectively nationalized the national railway system, while forsaking budget austerity in favor of aggressive public spending. Germany has set aside its traditional detestation for debt to unleash emergency spending, while enabling the rest of the European Union to breach limits on deficits.
The European Central Bank has transcended a legacy often marked by calamitous inaction in the face of crisis to produce something that has frequently seemed impossible: a decisive and timely response.
Beyond the current moment of emergency, some argue that the crisis will be squandered if it does not prompt meaningful change in the structure of economies after life returns to normal. They portray the rescues as an opportunity to transform the nature of the state’s role in the economy.
“It’s about changing the way we do capitalism,” said Mariana Mazzucato, an economist at University College London.
The oil keeps flowing. Where can it go?
The world is awash in crude oil it doesn’t need, and is slowly running out of places to put it.
The coronavirus pandemic has strangled the world’s economies, silenced factories and grounded airlines, cutting the need for fuel. But Saudi Arabia, the world’s largest producer, is locked in a price war with its rival Russia and is determined to keep raising production.
So storage facilities around the globe are filling up. Huge tankers filled with crude are anchored off coastlines, with no place to go.
“For the first time in history, we are seeing the likelihood that the market will test storage capacity limits within the near future,” said Antoine Halff, a founding partner of Kayrros, a market research firm.
As storage space becomes harder to find, the prices, which have already fallen more than half this year, could drop even further. And companies could be forced to shut off their wells.
The U.S. has a three-part plan to prevent a depression.
The crucial question is not how bad economic numbers will get in the next few months. What matters is whether this will be a severe-but-brief disruption to economic life, from which the United States and other major economies can quickly recover, or the beginning of a long, scarring depression.
To reach the more optimistic outcome, the U.S. government is trying to build, at great speed, a three-legged stool. All three components need to come together to make it plausible to return to prosperity reasonably quickly once the coronavirus outbreak is safely contained.
First, the nation needs to ensure that those who lose their jobs do not experience personal catastrophe with long-lasting effects. Second, it must ensure that businesses with sound long-term prospects don’t collapse in the interim. Third, the system of borrowing and lending needs to remain functional to avoid a freeze-up of credit that would make the other two goals impossible.
The $2 trillion relief package that is on the verge of passing Congress and a series of extraordinary actions by the Federal Reserve constitute the United States government’s efforts to bolster each of those legs.
London hotels are tapped to provide shelter for the homeless.
London hotels, starved for business because travel has ground to a halt, are being enlisted to provide temporary shelter for homeless people to isolate themselves during the outbreak.
The mayor of London, Sadiq Khan, booked 300 rooms for 12 weeks in two hotels that are part of the InterContinental Hotels Group. The move aims to secure places for homeless people to self-isolate as coronavirus cases in Britain surpassed 9,500 on Thursday. Another 200 rooms were booked with other hotel groups.
Matthew Downie, director of policy at Crisis, a national homeless charity, welcomed the effort but said it was nowhere near the scale it needed to be. The number of homeless people across England surpassed 280,000 in 2019.
Reporting was contributed by Peter S. Goodman, Patricia Cohen, Ben Casselman, Geneva Abdul, Amie Tsang, Carlos Tejada, Alexandra Stevenson, Su-Hyun Lee and Heather Murphy.
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