Unemployment filings fell again last week as the improving public health situation and the easing of pandemic-related restrictions allowed the labor market to continue its gradual return to normal.
About 505,000 people filed first-time applications for state jobless benefits, the Labor Department said Thursday, down more than 100,000 from a week earlier. In addition, 101,000 people filed for Pandemic Unemployment Assistance, a federal program covering freelancers, self-employed workers and others who don’t qualify for regular benefits. Neither figure is seasonally adjusted.
Applications for unemployment benefits remain high by historical standards, but they have fallen significantly in recent weeks after progress stalled in the fall and winter. Weekly filings for state benefits, which peaked at more than six million last spring, fell below 700,000 for the first time in late March and have now been below that level for four straight weeks.
“In the last few weeks we’ve seen a pretty dramatic improvement in the claims data, and I think that does signal that there’s been an acceleration in the labor market recovery in April,” said Daniel Zhao, senior economist at the employment site Glassdoor.
There were still more than nine million people receiving unemployment insurance under state programs — or emergency programs that extend state benefits — as of mid-April, the latest data available. That total, which does not include workers on Pandemic Unemployment Assistance, has fallen in recent weeks but has done so more slowly than new applications. At the peak of the crisis last spring, more than 20 million people were receiving benefits.
Economists should get a clearer picture of the labor market’s progress on Friday, when the Labor Department will release data on hiring and unemployment in April. The report is expected to show that employers added about one million jobs last month, up from 916,000 in March. The leisure and hospitality industry, which was hit the hardest by the initial phase of the pandemic last spring, has led the way in the recovery in recent months, a trend that forecasters believe continued in April.
Even strong job growth last month will still leave the U.S. economy with millions fewer jobs than before the pandemic. Forecasters expect the report to show that the unemployment rate fell below 6 percent in April, down from nearly 15 percent last spring. But that doesn’t factor in people — particularly women — who have left the labor force, including those caring for children while schools are closed. If those people were counted as unemployed, the jobless rate would have been above 9 percent in March and most likely close to that level in April.
Many employers have said in recent weeks that they would like to hire even faster but have struggled to find enough workers. Some have blamed enhanced unemployment benefits for discouraging people from returning to work. On Tuesday, Gov. Greg Gianforte of Montana said his state would pull out of a federal program offering enhanced benefits to unemployed workers and would instead pay a $1,200 bonus to recipients when they found new jobs.
Economic research has found that unemployment benefits can reduce the intensity with which workers search for jobs. But most studies find that the impact on the overall labor market is small, especially when unemployment is high. And Mr. Zhao and other economists say there are other reasons that labor supply might be rebounding more slowly than demand. Many potential workers are juggling child care or other responsibilities at home; others remain cautious about the health risks of returning to in-person work.
“I think we will see labor supply improve pretty dramatically in the coming months as the pandemic abates,” Mr. Zhao said.
A spike in sales to Chinese customers helped Volkswagen rebound strongly from the disruption caused by the pandemic, the carmaker said Thursday, underlining China’s importance to the German economy.
Sales in the first three months of 2021 rose 13 percent compared to a year earlier, to 62.4 billion euros, or $75 billion, while profit rose nearly sevenfold to 3.4 billion euros, the company said. Vehicle sales in China, which is Volkswagen’s largest market, rose more than 60 percent.
The recovery in sales bodes well for the German economy. Vehicles are the country’s biggest export product. But Volkswagen also illustrates Germany’s dependence on China when tensions between Beijing and the European Union are rising because of the Chinese government’s treatment of minority groups and its crackdown on dissent in Hong Kong.
As is typical for Volkswagen, the company’s Audi and Porsche divisions generated most of the profit. The luxury vehicles have a higher profit margin than the more affordable cars that account for most of Volkswagen’s volume.
Volkswagen said it was able to manage the shortage of semiconductors that has afflicted all carmakers in recent months, but warned that the chip famine could become more acute in months to come.
Volkswagen sold 60,000 battery-powered vehicles out of a total of 2.4 million during the quarter. That may be a disappointment to the company, which has staked its future on a new line of electric cars, the first of which went on sale late in 2020.
The Bank of England unveiled a much brighter outlook for the British economy on Thursday, saying it would return to its prepandemic levels at the end of this year as lockdowns ended, consumers spent billions of pounds in extra savings and the vaccine rollout reduced public health worries.
The central bank, in its quarterly monetary report, raised its growth forecasts and slashed its predictions for unemployment. The British economy is now projected to grow 7.25 percent this year, compared to a forecast of 5 percent growth three months ago. This would be the fastest pace of expansion for the economy since official records began in 1949, pulling Britain out of its worst recession in three centuries.
The higher forecast comes after the government has announced tens of billions of pounds in additional spending to see workers and businesses through the summer, and outlined its plan to end lockdown restrictions by late June.
Britain’s economic output “recovers strongly over the course of 2021, albeit only back to pre-Covid levels,” Andrew Bailey, the governor of the Bank of England, said in a news conference on Thursday.
“Of course, there remains uncertainty around how the pandemic might evolve and so there are risks around this projection, including from renewed waves of infections in the U.K. and other countries,” he said.
He added that there was also an “enormous amount of uncertainty” about how the pandemic might permanently change people’s working and living patterns, and the effect that will have on the shape of the economy.
Even though inflation is expected to rise above the central bank’s 2 percent target, policymakers voted unanimously to keep the benchmark interest rate at 0.1 percent. It cut rates to that level in March 2020 at the start of the coronavirus pandemic.
The central bank also said it would slow the pace of its £875 billion government bond-buying program, which was projected to run through 2021, so that it does not finish the program before the end of the year. If the central bank had continued at its current pace, the buying program would have ended several months early. Instead of buying £4.4 billion government bonds a week, the central bank will buy £3.4 billion. The program helps keep government borrowing costs low and supports the economy by encouraging investors to buy other assets.
The minutes of the central bank’s policy meeting showed that officials don’t intent to tighten monetary policy until “there is clear evidence that significant progress” is made on the economic recovery and inflation is sustainably at the bank’s target.
The Bank of England now forecasts unemployment to peak at 5.5 percent later this year, because of the extension of the government’s furlough program. In February, the central bank predicted the unemployment rate would rise as high as 7.75 percent.
The easing of pandemic restrictions will also increase consumer spending. The central bank added that it now expected people to spend about 10 percent of the excess savings they built up in lockdown based on new survey evidence. The previous estimate was just 5 percent.
But these extra savings are “not evenly distributed,” Mr. Bailey said. And they are concentrated among people who are older and already wealthier.
SpongeBob, “Star Trek” and the Super Bowl have attracted new subscribers to ViacomCBS’s streaming platforms.
The company, led by Shari Redstone, rebranded its long-running streaming service as Paramount+ in March, while providing it with a slew of new shows, films and sports programming. The company also added content to Pluto, its free streaming service.
The stronger commitment to digital media has created a revenue powerhouse, with streaming sales jumping 65 percent to $816 million in the first quarter, the company reported Thursday. ViacomCBS said it had added six million new streaming subscribers to both Paramount+ and a smaller streaming service, Showtime, bringing the total to 36 million.
The company doesn’t disclose how many customers are coming to each platform, but the majority have bought Paramount+, a cheaper service at $6 a month with ads, or $10 a month without commercials. ViacomCBS plans to offer a new tier at $5 a month in June in an effort to drive more subscribers. That should help the company sell more ads, offsetting the price drop.
Pluto also saw large gains. It claims 50 million active monthly viewers, nearly double the number it had last year. Unlike Paramount+, Pluto is free and relies entirely on commercials to generate revenue. The popularity of free streamers such as Pluto has enlivened the ad market as brands look for venues beyond traditional TV to promote their wares.
Revenue from advertising on the company’s streaming platforms rose 62 percent to $428 million, while subscription revenues from streaming increased 69 percent to $388 million.
Despite the rapid growth, streaming remains a cost-intensive business and is likely a big money loser. Even Netflix, the industry leader, bled cash for years before achieving true profitability only after it surpassed 200 million subscribers last year.
The company said it would invest more in original series and films for Paramount+, and, in a marked switch from its previous strategy, it plans to hold back more of its own productions for the service instead of licensing them to other streamers.
In 2019, the company sold rights to “South Park,” one of its most popular franchises, to AT&T’s HBO Max for $500 million for several years. It has also sold shows such as “Tom Clancy’s Jack Ryan” to Amazon Prime Video and “Thirteen Reasons Why” to Netflix. Now, ViacomCBS will try to fill its content pipeline from its own studios.
The focus on streaming highlights the steady decline of the company’s traditional broadcast and cable businesses. Viewership has been dropping, as it has at other TV networks. ViacomCBS still benefited from hosting this year’s Super Bowl and the National Collegiate Athletic Association men’s basketball tournament. Advertising increased 21 percent, to $2.7 billion, and carriage fees paid by cable operators rose 5 percent, to $2 billion.
Over all, adjusted operating profit at ViacomCBS gained 39 percent, hitting $961 million, and revenue increased 14 percent to $7.4 billion.
In the quarter, the company also took advantage of an unusually frothy market for its stock and issued new shares to raise $2.7 billion in capital. Shares in ViacomCBS had jumped nearly tenfold in the past year.
Most of those gains had come as a result of a heavily leveraged trading strategy from a single investment firm, Archegos Capital Management, led by the investor Bill Hwang. At one point Mr. Hwang was responsible for $20 billion of ViacomCBS stock, or a third of all shares.
It all came tumbling down last month when lenders demanded their money back. ViacomCBS also suffered as its share price plummeted from a high of $100 to about $38 on Thursday.
By: Ella Koeze·Data delayed at least 15 minutes·Source: FactSet
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Stocks on Wall Street rose on Thursday as investors digested an assortment of corporate earnings reports and new signs of economic recovery in the United States and Europe.
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The S&P 500 gained 0.8 percent, while the Nasdaq composite rose 0.4 percent. The Stoxx Europe 600 index fell 0.1 percent and the FTSE 100 in Britain gained 0.5 percent.
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In the U.S., the Labor Department said the number of people claiming state unemployment insurance continued to decline. About 505,000 people filed first-time applications, down more than 100,000 from a week earlier.
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Oil futures fell after recent gains, with West Texas Intermediate, the American benchmark, down 1.4 percent to $64.71 a barrel.
Vaccine patents
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The Biden administration’s announcement that it would support efforts to waive intellectual property protections for coronavirus vaccines caused share prices for some pharmaceutical companies to tumble.
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Pfizer fell about 1 percent on Thursday, Moderna fell 1.4 percent and BioNTech, the German firm that developed a vaccine with Pfizer, dropped 1.6 percent.
Consider it a small victory.
Eurostar, the sleek and speedy high-speed train service that ties London, Paris, Brussels, Amsterdam and other cities, will increase its timetable on May 27 to two trains per day on its once heavily traveled Paris-London route, up from just one round-trip train per day imposed during the pandemic.
The service is increasing slightly as governments in Europe plan to slowly lift longstanding national restrictions on travel designed to combat the spread of the coronavirus. From a peak of running more than 60 trains a day, Eurostar cut service during the pandemic to one daily round trip between London and Paris, and one on its London-Brussels and Amsterdam routes.
The Brussels-Amsterdam route will remain the same with one train in each direction per day, a spokesman said, adding that Eurostar will adapt its timetable should demand increase, which still depends on travel restrictions across its routes.
Eurostar’s future has been thrown into turmoil as pandemic measures led last year to a 95 percent slump in ridership, creating a cash crunch and pushing the iconic company to the brink of bankruptcy.
While some airlines and other tourist-related businesses in Europe have been able to rely on government support during the crisis, Eurostar, an independent train operator, isn’t eligible for direct state aid.
Last month, the company, now owned by a consortium that includes the French and Belgium national railways, reportedly secured a deal with its lenders to refinance a debt pile worth 400 million euros ($553 million). The British government, which in 2015 sold its stake in the rail company, last month declined to back a broader financial rescue package.
A spokesman for Eurostar said that it had no new details on a financial rescue, but that “conversations are still progressing.” The spokesman added that it was “too early to predict a recovery to prepandemic levels — this would be very much dependent on the easing of international travel restrictions which are yet to be confirmed.”
Eurostar trains will maintain some vacant seats onboard to allow for social distancing. The company said it was advising riders to check with their embassies before traveling, and to consult the company’s website for the latest information.
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Universal Orlando Resort in Florida updated its coronavirus precautions on its website to to note that there will no longer be temperature checks on entry and that social distancing has been reduced to three feet, but that masks are still required. Gov. Ron DeSantis, a Republican, suspended all Covid-19 restrictions in the state earlier this month and has also barred businesses from requiring proof of Covid-19 vaccination.
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Fox News, the cable news giant controlled by Rupert Murdoch, kept its parent company flush in the first three months of the year, notching a slight gain in profit and sales despite a drop in viewers. Altogether, Fox Corporation beat Wall Street expectations with a sevenfold increase in profit to $567 million and a 6.5 percent drop in revenue to $3.2 billion compared with the same period a year prior. But revenue at most of its businesses dropped as fewer viewers tuned into the company’s cable channels and the Fox broadcast network, in part because Fox did not host the Super Bowl this year. Total advertising sales fell 24 percent to $1.2 billion.
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Uber said its business was recovering from the slowdown caused by the pandemic, although it continued to lose money. The company said on Wednesday that revenue was $2.9 billion in the first three months of the year, down 11 percent from the same period a year ago. Excluding money earmarked for a settlement with drivers in Britain, Uber’s revenue was $3.5 billion, an 8 percent increase from the previous year that outpaced Wall Street expectations of $3.28 billion.
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The New York Times Company recorded its smallest gain in new subscribers in a year and a half. The Times reported a total of 7.8 million subscribers across both print and digital platforms, with 6.9 million coming for online news or its Cooking and Games apps. The company added 301,000 digital customers for the first three months of the year, the lowest increase since the third quarter of 2019. The company reported adjusted operating profit of $68 million, a 54 percent jump from last year, as it generated more dollars from each subscriber, partly because of the expiration of promotional rates as the new year rolled over. Total revenue rose modestly, about 6.6 percent, to $473 million.
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