Jobless Claims Expected to Reflect New Round of Layoffs: Live Business Updates - 14 minutes read

Live Updated Oct. 1, 2020, 1:12 p.m. ET Oct. 1, 2020, 1:12 p.m. ET Job Cuts Continue at Staggering Pace: Live Updates RIGHT NOW Nancy Pelosi and Steven Mnuchin plan to continue talks on a relief package.

Nancy Pelosi and Steven Mnuchin plan to continue talks on a relief package. Speaker Nancy Pelosi is scheduled to speak with Treasury Secretary Steven Mnuchin again on Thursday. Credit... Chip Somodevilla/Getty Images Speaker Nancy Pelosi on Thursday refused to rule out the chance of reaching an agreement with Treasury Secretary Steven Mnuchin on another coronavirus relief package, even as she outlined several critical differences with the Trump administration and signaled that House Democrats would press ahead with their own legislation. “We’re hopeful that we can reach an agreement because the needs of the American people are great,” Ms. Pelosi said at her weekly news conference. “But there has to be a recognition that it takes money to do that, and it takes the right language to make sure it’s done right.” Ms. Pelosi and Mr. Mnuchin are scheduled to speak on the phone at 1 p.m., according to a person familiar with the discussion. The two remain at odds over the scope of the package, with Democrats pushing a new $2.2 trillion plan unveiled earlier this week and Mr. Mnuchin bringing a $1.6 trillion offer to a 90-minute meeting in Ms. Pelosi’s Capitol Hill suite on Wednesday. The stalemate comes as several industries, notably airlines, are running into severe financial constraints as the virus persists and people continue to shy away from traveling. United Airlines and American Airlines began furloughs of 30,000 workers on Thursday after Congress was unable to come up with a fresh aid package for the industry. House Democrats, under pressure from rank-and-file lawmakers eager to return to their districts with news of a deal, are expected to vote on the $2.2 trillion plan on Thursday. Democratic leaders had delayed plans to vote on the legislation on Wednesday, in an effort to give the talks between Ms. Pelosi and Mr. Mnuchin time to produce an agreement. Ms. Pelosi insisted that approval of the House Democratic plan did not signal the end of negotiations, telling reporters, “It just says, you asked, here’s what it is — this is how we came down” from their initial $3.4 trillion proposal approved in May. On Wednesday evening, Mr. Mnuchin said the talks had been “productive,” adding that a deal would include direct payments to Americans that would be similar in size to the previous round of payments. But he and other administration officials warned that the Democratic offer in its current form was unacceptable. And in a sign of the ongoing acrimony, Kayleigh McEnany, the White House press secretary, on Thursday placed blame on Ms. Pelosi for layoffs in the airline industry. “Nancy Pelosi is not being serious” when it comes to the negotiations, she said. Ms. McEnany confirmed that the White House offered a relief proposal that would cost $1.6 trillion, including $150 billion for schools and $250 billion for states and municipalities. She suggested that no additional offer was immediately forthcoming and suggested that Democrats should pass legislation on the items that the two sides already agree on. — Emily Cochrane and

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Wall Street climbs as investors watch for developments on a stimulus plan. Stocks on Wall Street edged higher on Thursday as investors watched for developments in Washington for a new government spending plan to bolster the U.S. economy. Democrats and Republicans have been unable to reach an agreement on the appropriate level of financial support for small businesses, workers, state governments and the broader economy, though Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin have held talks this week. House Democrats abruptly postponed a planned vote Wednesday evening on a $2.2 trillion plan, putting off action until Thursday to leave time for last-ditch negotiations with the Trump administration.

Speaking at her weekly news conference on Thursday, Ms. Pelosi held out hope for an agreement, even both sides remained at odds over the scope of the package. Mr. Mnuchin has floated a $1.6 trillion plan. The two are scheduled to speak again Thursday, according to a person familiar with the discussion.

But Wall Street analysts said they did not expect any additional fiscal stimulus before the November election, and major airlines began to furlough workers on Thursday after financial support from Washington ended the day before.

“We’re hearing a lot of hope out of Speaker Pelosi and Secretary Mnuchin that a deal will get done, but we wonder if this chatter is merely something to drown out all of the layoff announcements we’ve heard this week out of companies,” Matt Maley, chief market strategist at Miller Tabak, wrote in an email to clients on Thursday.

American Airlines and United Airlines told employees on Wednesday night that they would proceed with more than 32,000 furloughs, though both companies said they would reverse course if lawmakers provided the funding the industry had sought. Earlier in the week, the Walt Disney Company said it would lay off about 28,000 park workers, and Allstate announced plans to lay off approximately 3,800 employees.

The S&P 500 was about half a percent higher on Thursday, while shares in Europe ended slightly higher. —

Airlines furlough tens of thousands of workers as aid deal expires. Unions and airline executives had pushed Congress for a new aid package to avoid job cuts, but were unable to get past the gridlock. Credit... Hiroko Masuike/The New York Times Tens of thousands of airline workers were furloughed starting Thursday after a widely supported effort to renew federal stimulus funding for the industry failed to overcome a congressional stalemate. American Airlines and United Airlines told employees on Wednesday night that they would proceed with more than 32,000 furloughs, though both companies said they would reverse course if lawmakers provided the funding the industry had sought. “I am extremely sorry we have reached this outcome,” Doug Parker, American’s chief executive, said in a letter to staff. “It is not what you all deserve.” Passenger airlines received $25 billion in payroll funding under the March stimulus law known as the CARES Act, on the condition that they refrained from broad job cuts until Oct. 1. Unions representing airline workers had garnered bipartisan support in Congress for another round of aid in recent weeks, but the effort was caught in the deadlock over a broader stimulus package, even after airline executives pleaded their case in Washington. The pandemic’s toll on air travel and the industry has been so severe that tens of thousands of airline employees have already volunteered to take pay cuts, unpaid leave for an extended period, buyouts or early retirement. —

Google commits $1 billion to license content from news publishers. Sundar Pichai, the chief executive of Google, said the company’s licensing partnership with news publishers would start in Germany and Brazil and expand to other countries later. Credit... Max Whittaker for The New York Times Google said on Thursday that it would spend more than $1 billion to license content from international news organizations, after years of criticism that it was not providing fair compensation for articles and other content linked to by its internet search products. The program is part of a new Google product called News Showcase that will present news from around the world in short snippets that readers can quickly browse on a phone or other device. The company will pay publishers to curate the material that will be presented. The program was starting on Thursday in Germany and Brazil, and would be rolled out to additional countries in the months ahead, Sundar Pichai, Google’s chief executive, wrote in a blog post. Partnerships have been signed with nearly 200 publications, including in Argentina, Australia, Britain and Canada, Google said. The papers include Der Spiegel and Handelsblatt in Germany and Folha de S.Paulo in Brazil. Google has faced years of criticism around the world for not doing enough to support news organizations whose content it links to. In the Europe Union, new copyright rules give publishers stronger rights to negotiate with aggregators like Google. In Australia, Google and Facebook are facing new regulations that could require them to pay local publishers for news they carry. The European Publishers Association, a trade group, criticized Google’s program as an attempt to undermine government actions. “By launching a product, they can dictate terms and conditions, undermine legislation designed to create conditions for a fair negotiation, while claiming they are helping to fund news production,” Angela Mills Wade, the group’s executive director, said in a statement. —

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H&M will close stores and ramp up digital efforts as online sales rise 7 percent. The Swedish retailer H&M said it would close 250 stores globally next year. Credit... Mike Segar/Reuters Shares in the Swedish retailer H&M rose more than 7 percent after the company said online sales were growing strongly and the company had already returned to profit in the third quarter. H&M also announced that it would close 250 stores globally next year as part of its plans to consolidate stores and ramp up digital offerings to meet the needs of customers who are increasingly choosing to shop online. ”More and more customers started shopping online during the pandemic, and they are making it clear that they value a convenient and inspiring experience in which stores and online interact and strengthen each other,” the company’s chief executive, Helena Helmersson, said in a statement. The company also said that it was working to improve its supply chain to increase the availability of inventory and the speed of deliveries. The coronavirus pandemic has hit retailers particularly hard. Many clothing stores shut their doors during the lockdowns, leading to unpaid rents and staff furloughs. H&M reported that in the beginning of the third quarter, roughly 900 of its 5,000 stores were temporarily closed. At the end of the quarter, which ended on Aug. 31, just over 200 stores were still temporarily shut. “Although the challenges are far from over, we believe that the worst is behind us and we are well placed to come out of the crisis stronger,” Ms. Helmersson said. —

Boeing plans to move all Dreamliner production to South Carolina. Boeing has cut production of the Dreamliner repeatedly over the last year. Credit... Eric Johnson/Reuters Boeing plans to consolidate production of its 787 Dreamliner jet at its factory in South Carolina, dealing a blow to workers in the Seattle area where the plane is also manufactured. The move won’t take place until mid-2021 at the earliest and comes as Boeing contends with a steep decline in air travel that has devastated the aviation business. Over the past year, the company has repeatedly slashed production of the Dreamliner, a twin-aisle jet designed for long flights, and it warned this summer that it was exploring producing the plane in just one place. “To ensure we can be effective in a market that will be smaller in the near-term, and one that will have different demands from our customers long-term, we made a decision earlier this morning to consolidate 787 production in South Carolina after months of detailed and thorough study,” Stan Deal, president and chief executive of Boeing Commercial Airplanes, said in a message to employees. The company did not say how many workers in the Seattle area might lose their jobs because of the decision. About 900 people work on the Dreamliner in Washington, Boeing said, and at least some may be reassigned to other planes. The union representing machinists in Washington State had accused Boeing of using the crisis as a cover to move production to the company’s factory in North Charleston, S.C., where workers are not unionized. Another union, the Society of Professional Engineering Employees in Aerospace, criticized Boeing for abandoning its members. “We believe Boeing is making a mistake,” Ray Goforth, the society’s executive director, said in a statement. “SPEEA’s immediate focus is supporting the members who will be laid off. Long term we will partner with community stakeholders to attract new aerospace jobs to the state by marketing the aerospace talent pool Boeing is walking away from.” Boeing had cut production of the plane from 14 to 10 a month in April. In July, it announced plans to drop production to six per month next year. The company is also working to address quality concerns that have slowed delivery of the jet. Boeing and the Federal Aviation Administration are looking into the issues, which could affect nearly 900 planes. The company started producing the Dreamliner in Everett, Wash., in 2007 and in South Carolina in 2010, but only the South Carolina factory is equipped to build the larger variant of the plane. Boeing’s Washington work force will continue to work on the 737, 747, 767 and 777. The troubled 737 Max appears to be moving toward a return to service by early next year after being grounded worldwide last year following two fatal crashes. —

Catch up: Irish court says Subway’s bread is not bread after all. The Supreme Court of Ireland ruled that the bread Subway used in its sandwiches was not in fact bread. With a sugar content five times that of the country’s legal limit, the bread served at U.S. sandwich food chain could no longer be considered bread or a “staple product” but a confectionary, the court said. The ruling stems from a case that questioned whether the bread counted as a staple food and was therefore exempt from taxes. Subway has nearly 2,500 stores in England and Ireland.

Carnival Cruise Line has canceled cruises from all of its U.S. home ports except Miami and Port Canaveral for November and December, following a decision from the Centers for Disease Control and Prevention to extend its no-sail order for cruise operations. “As we have said throughout this pause, our return to operations will be gradual and phased in,” Christine Duffy, president of Carnival Cruise Line, said in a statement. “And while we are not making any presumptions, once cruising is allowed, we will center our initial start-up from the homeports of Miami and Port Canaveral.”

The Federal Reserve on Wednesday said it would extend its ban on share buybacks by big banks as well as its cap on dividend payouts through the end of the year, a move the central bank said was an effort “to ensure that large banks maintain a high level of capital resilience” as pandemic-spurred economic uncertainty persists. The limitations apply to only the largest banks — those with more than $100 billion in total assets, which include firms like Bank of America, Citigroup and Wells Fargo .

The National Association of Theater Owners, a trade organization for cinemas in the United States and beyond, pleaded with Congress for financial help. “Absent a solution designed for their circumstances, theaters may not survive the impact of the pandemic,” it said in a letter. The letter said that “69 percent of small and midsize theater companies will be forced to file for bankruptcy or close permanently” without government help.

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Subsidized furlough programs keep a lid on eurozone unemployment. A jobseeker interviewing at a job fair in Barcelona, Spain, in September. The unemployment rate in the eurozone ticked up to 8.1 percent in August, from 8 percent the month before. Credit... David Ramos/Getty Images The unemployment rate in the eurozone edged up to 8.1 percent in August from 8 percent in July, the European Union said Thursday, as government support cushioned much of the economic impact of the pandemic. But economists fear that the jobless rate could surge when the programs expire, or employers go bankrupt or are forced to lay off workers permanently. Germany, France and many other countries compensate workers for some of the income they lose when their employers put them on furlough or reduced hours. That has a led to relatively modest increases in the jobless rate, which was 7.2 percent in March when the pandemic hit Europe. In the United States, which does not have a comparable program, unemployment shot from 3.5 percent in February to 14.7 percent in April, though the rate has since declined to 8.4 percent. In theory, people on Europe’s short-work programs will get their jobs back when the economy improves. But as the pandemic lingers and surges in some places, restaurants and other small businesses may go under, while companies such as airlines may lay off workers permanently because they don’t expect revenue to rebound for several years. “Short-time work schemes have managed to flatten the curve substantially,” Bert Colijn, a senior economist at ING Bank, said in a note. But he added that surges in the number of new infections creates “a lot of uncertainty about the growth environment.” —

Source: New York Times

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