New claims for state unemployment benefits sharply increased last week as the resurgent coronavirus pandemic continued to batter the economy.
A total of 1.15 million workers filed initial claims for state unemployment benefits during the first full week of the new year, the Labor Department said. Another 284,000 claims were filed for Pandemic Unemployment Assistance, an emergency federal program for freelancers, part-time workers and others normally ineligible for state jobless benefits. Neither figure is seasonally adjusted. On a seasonally adjusted basis, new state claims totaled 965,000.
Economists had been bracing for a fresh wave of claims as the virus batters the service industry. The government reported last week that the economy shed 140,000 jobs in December, the first drop in employment since last spring’s steep losses, with restaurants, bars and hotels recording steep losses.
“We know that the pandemic is worsening, and with the jobs report last Friday, we can see that we’re in a deep economic hole and digging in the wrong direction,” said Daniel Zhao, senior economist with the career site Glassdoor.
The labor market has rebounded somewhat since the initial coronavirus wave in the spring. But of the 22 million jobs that disappeared, nearly 10 million remain lost.
“Compared to then, we are doing better,” said AnnElizabeth Konkel, an economist at the career site Indeed, referring to the spring. “But compared to the pre-Covid era, we still have so far to go.”
Still, economists and analysts see better times ahead. As more people are vaccinated, cases will begin to fall, which will ease restrictions on businesses and could lead to a resurgence in consumer activity, helping to revive the service industry.
Perhaps more immediately, President-elect Joseph R. Biden Jr. has pledged to put forward a stimulus package that would provide relief to individuals, small businesses, students, schools and local governments.
Delta Air Lines lost $755 million in the fourth quarter, bringing its losses to nearly $12.4 billion in 2020, a year in which the airline industry was battered by a pandemic that crippled air travel.
“Our December quarter results capped the toughest year in Delta’s history,” Ed Bastian, Delta’s chief executive, said in a statement Tuesday morning. “While our challenges continue in 2021, I am optimistic this will be a year of recovery and a turning point that results in an even stronger Delta.”
The airline brought in nearly $4 billion in operating revenue in the last three months of the year, a 65 percent decline from the same quarter a year earlier. But Delta also nearly halved its “daily cash burn,” an approximate measure of spending on core operations and investments, which analysts use to gauge how close a business is to taking in more cash than it is spending.
The distribution of coronavirus vaccines has given Delta and other airlines hope, but a meaningful recovery is not expected until the vaccines are widely administered, which is not expected until at least the second half of the year. During the first three months of 2021, Delta expects scheduled flight capacity to be down about a third and revenue to be 60 to 65 percent lower compared with the same quarter in 2019.
In the earnings announcement, Glen Hauenstein, Delta’s president, said the airline expected the year to unfold in three phases: choppy at first, followed by “an inflection point” and then a sustained recovery “as customer confidence gains momentum, vaccinations become widespread and offices reopen.”
Holiday travel provided some relief to the industry, but air travel is still down more than 60 percent compared with last year, according to the latest Transportation Security Administration airport security screening data.
With the incoming Biden administration pushing for more economic stimulus and multiple coronavirus vaccines already approved, some investors have been wondering whether the Federal Reserve might start to ease off its support for the economy.
Jerome H. Powell, the central bank’s chair, will have an opportunity Thursday to reassure them that the central bank will be cautious in doing so. Mr. Powell is set to take part in a webcast question and answer session at 12:30 p.m.
His remarks will come at a time when dire short-term conditions — surging virus deaths, high unemployment and partial state and local economic lockdowns — contrast sharply with the longer-term outlook. Economists think that the economy might come roaring back later in 2021 as vaccines allow normal life to restart and consumers spend money they saved during the pandemic.
That split has led some investors to worry that the Fed might speed up its plans to reduce its enormous bond purchases, or even to lift interest rates from their near-zero setting. The central bank is buying about $120 billion in Treasury and mortgage-backed debt per month to keep markets operating smoothly and to help goose the economy. But top officials have been clear that economic conditions remain well short of their twin targets — maximum employment and slow but steady price increases.
Many expect Mr. Powell to reiterate that patient message.
“We are confident he will continue to drive home the emerging message: the Fed is still a long way from its goals of broad-based full employment and 2 percent average inflation,” economists at Evercore ISI wrote in a research note on Thursday morning.
Still, analysts at TD Securities noted that “his remarks would follow recent comments by a number of Fed officials who have suggested tapering discussions could begin by the end of the year,” which will make them closely watched.
“Tapering” refers to the process of slowing bond purchases.
The French carmaker Renault, saying it does not expect auto sales to bounce back quickly from the pandemic, announced a plan on Thursday to survive and make money while selling fewer cars and shifting emphasis to electric vehicles.
The plan presented by Luca de Meo, who took over as Renault’s chief executive in July, is a sharp departure from the strategy pursued by Carlos Ghosn, the former chief executive of Renault’s alliance with Japanese automakers Nissan and Mitsubishi.
Mr. de Meo implicitly criticized Mr. Ghosn during an online briefing for journalists and analysts on Thursday, saying that Renault had “too many layers, too many silos, too many shared responsibilities. All that mattered were size and volumes.”
Under the new plan, Renault will cut production capacity, reduce the number of models it offers and simplify manufacturing by increasing the number of parts shared among vehicles. For example, all gasoline vehicles will use the same basic engine.
Mr. de Meo said his aim was to avoid job cuts beyond those already planned. The French government is a big shareholder in the company, and has resisted job cuts in the past.
“We are also here to protect the work of people,” Mr. de Meo told reporters during a conference call. “We have so many opportunities to get rid of other costs.”
During a brutal period for the auto industry, Renault was among the hardest hit. The company said Tuesday that sales fell more than 20 percent in 2020, to less than three million vehicles.
“We are not betting on a strong recovery,” Clotilde Delbos, the Renault chief financial officer, said during the presentation. “Cost reduction will be the strongest lever for our improvement.”
Electric cars are among Renault’s few bright spots. Sales of the Zoe, a two-door battery powered hatchback, doubled in 2020 despite the pandemic. The Zoe displaced the Tesla Model 3 as the best-selling electric car in Europe. However, at around 20,000 euros after subsidies, or $24,000, the Zoe costs half as much as the Model 3 and is likely to be less profitable.
Mr. de Meo mentioned Renault’s troubled but essential alliance with Japanese carmakers Nissan and Mitsubishi only in passing. But at the end of the video presentation, Makoto Uchida, the chief executive of Nissan, made an appearance to say that he endorsed the Renault plan.
“I’m happy to see Renault back on the path to profitability,” Mr. Uchida said.
Hong Kong Broadband Network said in a statement on Thursday that it had taken steps to block access to a website that featured the personal information of police officers, the first full website censorship under Hong Kong’s expansive national security law.
The site, which featured personal information about the police and pro-establishment figures in the Chinese city, first faced partial blocks in Hong Kong on Jan. 6. A technical analysis by The New York Times showed the territory’s internet service providers appeared to be interfering with access to the site.
Hong Kong Broadband, one of the city’s largest internet service providers, said it cut access to the site on Jan. 13 “in compliance with the requirement issued under the national security law.”
In the past, Hong Kong’s government had a separate process, which included issuing court orders, to go after content deemed illegal online. But the purge of the website happened without any warning or official legal notification, according to Naomi Chan, the 18-year-old high-school student who created the site.
The disruption raises the prospect that Hong Kong, long a bastion of internet freedom on the border with China’s closely censored internet, could fall under the shadow of the mainland’s Great Firewall, which blocks foreign internet sites like Google and Facebook.
Since the national security law was put in place over the summer, the police have turned to harsh digital investigative tactics reminiscent of those used by security forces in China, including hanging cameras outside the doors of politicians and forcing arrestees to give them access to smartphones.
The law was prompted by sometimes violent antigovernment protests in 2019, which alarmed Communist Party leaders in Beijing. The Chinese government has since used the law to tighten its grip on the former British colony, which operates under its own laws and has long enjoyed some degree of autonomy, including freedom of speech.
Stocks on Wall Street began the day with a small gain on Thursday and shares in Europe were modestly higher as investors anticipated President-elect Joseph R. Biden Jr.’s announcement of a multitrillion-dollar spending plan to counter the coronavirus’s impact on the U.S. economy.
Mr. Biden’s plan is expected to initially focus on expanding the country’s vaccination program and virus testing capacity, The New York Times’s Jim Tankersley reports.
Mr. Biden is to provide details in a speech Thursday evening in Delaware, hours after the latest tally of weekly unemployment claims showed a sharp rise in newly unemployed workers in the United States. Hiring remains dreadful, with employers recording a net loss of 140,000 jobs in December. Last spring, as the pandemic arrived in the United States, 22 million jobs disappeared. Nearly 10 million remain lost.
European markets were gaining, with the benchmark Stoxx Europe 600 and FTSE 100 up about half a percent.
The latest data from China shows a humming economy. Exports rose 18 percent in December from a year earlier, reflecting global demand for work-from-home devices. Imports also increased, 6.5 percent from a year earlier, a sign of a strengthening consumer economy inside the country.
Gov. Andrew M. Cuomo of New York has picked two European giants, Norway’s Equinor and BP, to supply the state with clean electricity from wind turbines planted on two large tracts in the Atlantic.
Offshore wind developers are attracted to the East Coast of the United States because of the availability of shallow water sites suitable for wind farms and the proximity of major electric power consuming centers like New York and Boston.
Until recently, offshore wind was largely a European industry but it has gained interest elsewhere as larger turbines and other innovations have brought down costs.
The deal will bring investment of nearly $9 billion, according to a news release from the state government. One of the sites is 20 miles off the south shore of Long Island, and the other is about the same distance south of Nantucket. The projects are expected to produce power late in this decade.
Equinor had already reached a $3 billion offshore power deal with New York in 2019. That wind farm plus the two just announced will have generating capacity sufficient to power 1.8 million homes.
For European oil companies like Equinor, the former Statoil, offshore wind projects provide opportunities to invest billions of dollars to advance their agenda of shifting away from oil and gas toward cleaner energy. Equinor moved early to acquire rights to ocean acreage off the United States and last year agreed to sell a 50 percent stake in its U.S. business to BP for $1.1 billion.
Equinor, other companies and the state will invest $644 million in a port in South Brooklyn and other facilities for constructing and servicing the wind farms, according to the news release.
Airlines, workplaces and sports stadiums may soon require people to show their coronavirus vaccination status on their smartphones before they can enter.
A coalition of leading technology companies, health organizations and nonprofit groups — including Microsoft, Oracle, Salesforce, Cerner, Epic Systems, the Mitre Corporation and the Mayo Clinic — announced on Thursday morning that they were developing technology standards to enable consumers to obtain and share their immunization records through health passport apps.
“For some period of time, most all of us are going to have to demonstrate either negative Covid-19 testing or an up-to-date vaccination status to go about the normal routines of our lives,” said Dr. Brad Perkins, the chief medical officer at the Commons Project Foundation, a nonprofit organization in Geneva that is a member of the vaccine credential initiative.
That will happen, Dr. Perkins added, “whether it’s getting on an airplane and going to a different country, whether it’s going to work, to school, to the grocery store, to live concerts or sporting events.”
Vaccine passport apps could fill a significant need for airlines, employers and other businesses.
In the United States, the federal government has developed paper cards that remind people who receive coronavirus vaccinations of their vaccine manufacturer, batch number and date of inoculation. But there is no federal system that consumers can use to get easy access to their immunization records online and establish their vaccination status for work or travel.
A few airlines, including United Airlines and JetBlue, are already trying out CommonPass, a health passport app from the Commons Project. The app enables passengers to retrieve their coronavirus test results from their health providers and then gives them a confirmation code allowing them to board certain international flights. The vaccination credentialing system would work similarly.