More Than 4 Million Filed Unemployment Claims Last Week – The New York Times

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The Federal Reserve will disclose the names of companies that benefit from its lending programs, it announced Thursday, a sign that the central bank is willing to provide the kind of transparency lawmakers have been urging.

The central bank will release the names and details of participants in each of its programs, the amount borrowed and interest rate charged, and overall costs, revenues and fees, it said. The Fed will publish program reports on its website at least every 30 days.

Congress has handed the Treasury Department $454 billion to back up Fed lending facilities, which either make loans or buy bonds to keep credit flowing in key market segments. With that layer of taxpayer insurance, the Fed has announced programs that are meant to help midsize businesses, state governments and large corporations.

But the backing came with some reporting requirements, as do the Fed’s emergency lending authorities in general: Jerome H. Powell, the Fed chair, and Treasury Secretary Steven Mnuchin must regularly report to Congress on the programs, for instance. It was unclear how detailed those explanations would be until Thursday’s release laid out the parameters.

“The Federal Reserve is committed to transparency and accountability,” Mr. Powell said in the release.

L Brands, the owner of Victoria’s Secret, shot back at the private equity firm that has been trying to terminate its acquisition of the retail chain

The effort on the part of the firm, Sycamore Partners, to end the deal because of the coronavirus outbreak is “invalid” and “pure gamesmanship” after it failed to renegotiate the price, L Brands said in a Delaware court filing on Thursday

The dispute has become the most prominent example of a buyer trying to back out of a deal because of the pandemic.

Sycamore said on Wednesday that L Brands had violated terms of its February transaction agreement and that a “material adverse effect” occurred because of the pandemic, allowing it to terminate the deal to buy 55 percent of Victoria’s Secret for about $525 million.

L Brands said on Thursday that when the deal was negotiated, “the world was already well aware of the existence of Covid-19, and the parties agreed that Sycamore would bear the risk of any adverse impacts stemming from such a pandemic.” The definition of a “material adverse effect” explicitly carved out impacts from pandemics, the company said.

The company called Sycamore’s stance “pure gamesmanship.” Sycamore sent L Brands a letter on April 13 saying that it wanted to renegotiate the purchase price and other terms of the deal because of the coronavirus outbreak, according to L Brands. When the company declined to renegotiate — because the agreement “expressly allocates the risk of pandemics to Sycamore” — the private equity firm sent a termination notice and filed the subsequent lawsuit, according to the filing.

The United Automobile Workers union said on Thursday that it was opposed to companies restarting auto production next month, saying it is not yet safe for its members to return to work.

“At this point in time, the U.A.W. does not believe the scientific data is conclusive that it is safe to have our members back in the workplace,” the union’s president, Rory Gamble, said in a statement. “We have not done enough testing to really understand the threat our members face.”

The union represents more than 400,000 workers and is an influential voice in the labor movement and manufacturing industry.

Mr. Gamble added the union supported an extension of the stay-at-home order in effect in Michigan. That order, by Gov. Gretchen Whitmer, expires on April 30 but she has said she expected an extension was warranted.

“We strongly suggest to our companies that an early May date is too soon and too risky to our members, their families, and their communities,” Mr. Gamble said.

General Motors, Ford Motor and Fiat Chrysler have been discussing with the union when and how they will reopen plants.

The union’s statement comes as some nonunion automakers announce plans to resume production in southern states that have not been hit as hard by the virus as Michigan, where 3,000 people, including more than two dozen U.A.W. members, have died from the coronavirus.

Earlier on Thursday, Toyota Motor said it was preparing to restart operations at its U.S. plants on May 4. Volkswagen has said it would begin phasing in production at its U.S. plant on May 3.

Stocks on Wall Street ended virtually unchanged on Thursday as an early rally, fueled by a surge in oil prices, faded.

The S&P 500, which rose as much as 1.6 percent earlier in the day, was flat by the close of trading. The ups and downs came as investors absorbed more grim economic news: Millions more workers claimed unemployment benefits in the United States and data from Europe highlighted the heavy toll of shutdowns to prevent the spread of coronavirus.

Investors have been shrugging off such data in recent weeks, as the shock of the economic devastation caused by the coronavirus pandemic fades and they begin to expect an eventual recovery.

Governments have started to discuss measures to return to normal. Businesses in Europe and the United States have begun to detail their plans to reopen businesses. Major airlines have already aggressively advertised the precautions they are taking to lure back passengers, from fogging cabins with disinfectant to restricting food service to blocking out middle seats.

The grim economic toll from the coronavirus pandemic jumped on Thursday when the government reported another 4.4 million people filed new unemployment claims last week, bringing the five-week total to more than 26 million.

The report is likely to intensify the debate over when to lift restrictions that have helped fight the virus’s spread but placed the economy in a stranglehold, reports Patricia Cohen of The Times.

“At all levels, it’s eye-watering numbers,” said Torsten Slok, chief international economist at Deutsche Bank Securities. But as large as the figures have been, they do not capture the full extent of layoffs — or the cascade of economic troubles that they have set in motion.

Problems responding to the waves of jobless claims now will affect the shape of the recovery when the pandemic eases, Mr. Slok said. Laid-off workers need money quickly to pay for rent, groceries and credit card bills. If they cannot do so, he said, the hole that the larger economy has fallen into “gets deeper and deeper, and more difficult to crawl out of.”

The Trump administration warned big companies on Thursday that they must prove they were in need of emergency small business loans to keep their operations running and had no other option to get financing or repay the funds.

The new guidance from the Treasury Department came amid an uproar over bigger companies taking loans through the Paycheck Protection Program while smaller businesses have been left out.

The Treasury Department updated its “Frequently Asked Questions” page about the P.P.P. to urge “large companies with adequate sources of liquidity” to think twice before applying for loans backed by the Small Business Administration.

The S.B.A.’s $349 billion fund to support these loans ran out last week and is expected to be replenished with another $310 billion this week. Backlash over the program has been escalating after some big restaurant chains took out multiple $10 million loans for their subsidiaries.

Treasury Secretary Steven Mnuchin warned businesses that they would be investigated and could face penalties if they improperly accept small-business money. He has urged such businesses to return those funds. The guidance released on Thursday said borrowers that repaid loans in full by May 7, 2020, would be deemed by the S.B.A. to have made their certifications in good faith, leaving them in good standing with the government.

At least five companies have already given back the funds: Shake Shack, Sweetgreen, Kura Sushi USA, ItWorks! and the owner of Ruth’s Chris Steakhouse, have all disclosed that they have returned the P.P.P. loans.

Another publicly traded company, Wave Life Sciences USA, announced on Thursday it was returning $7.2 million in a loan from JPMorgan Chase, one of the banks that handled aid applications using a two-tiered system that heavily favored larger companies and wealthy clients over the smallest businesses.

“We made this decision after the S.B.A. issued new guidance that states, in effect, that public companies are not appropriate recipients of these loans,” ” a spokeswoman for the company, Alicia Suter, said in an email.

A Memphis food tour company joined with local restaurants to offer a special meal and video tour to locals. The owners of a Detroit bar and scent shop froze cocktail mixers into ice cubes so patrons could just add liquor at home to mix the perfect drink. A laundry service for Airbnb rentals in Minneapolis started a curbside business for people stuck inside their homes.

Small-businesses owners across the country are looking for ways to survive the coronavirus pandemic, even as they fill out paperwork for federal stimulus funds that they no longer believe they can count on. They are adapting their business models and innovating products so that they, and their employees, can get back to work.

“Small businesses are really great at staying nimble,” said Laura Huang, associate professor at Harvard Business School and author of “Edge: Turning Adversity Into Advantage.” The ones that succeed, she said, “understand that even though they are looking to do new, innovative things, they need to grow where they are planted.”

That means that small-business owners should not completely change what they do but find new ways to deliver their product, dust off old ideas, experiment with existing strengths, search for new customers or change their story.

When Mayor Bill de Blasio of New York said on Wednesday that Macy’s and its chief executive, Jeff Gennette, were committed to holding its annual Fourth of July fireworks display, he called the gesture “generous” and “really patriotic.”

But critics questioned the expense at a time when most of Macy’s 123,000 employees have been furloughed. The retailer, which also owns Bloomingdales and Bluemercury, is facing intense financial pressure with the temporary closure of its stores.

“Macy’s should not be spending millions on fireworks displays while its own work force is out of work,” Stuart Appelbaum, president of the Retail, Wholesale and Department Store Union, said in a statement on Thursday. The company should be spending the money on health care coverage for employees instead, he added.

Macy’s does not disclose the cost of the show, though Mr. de Blasio suggested in a briefing on Thursday that this year’s display might be more modest. Macy’s said the display dates to 1976 and that this year’s show “will be a celebration of the strength and resilience of New York City and will honor frontline workers across America.”

Mr. de Blasio defended the plans to proceed with the pyrotechnics show. “I don’t think it’s an either-or,” he said. “Macy’s put aside the resources to provide this celebration.” The cost of the show, he added, was “small compared to the needs of working people.”

• Intel, one of the world’s largest computer chip makers, said Thursday that revenue climbed 23 percent to $19.8 billion during the quarter ending in March, an indication that parts of the computer industry are thriving amid the coronavirus pandemic. The company expects revenue to be $18.5 billion in the current quarter — up $2 billion from last year.

• Besieged by the economic tumult created by the coronavirus, the private equity giant Blackstone swung to a loss of $2.6 billion in the first quarter, a steep slide from the same period last year, when the company reported $1.1 billion in profit.

• Starting Friday, all 25,000 United Airlines flight attendants will be required to wear masks while on duty, the airline said. United is the first major U.S. airline to mandate masks. The union that represents flight attendants there and at more than a dozen other airlines separately asked the Transportation Department and Health and Human Services Department to mandate the same industrywide.

• Exxon Mobil said on Thursday it would produce medical-grade hand sanitizer in Louisiana. The company plans to initially make 160,000 gallons, enough for nearly five million bottles, which will be donated to health care providers in Louisiana, New Jersey, New Mexico, New York, Pennsylvania and Texas.

• The beef and pork subsidiary of Tyson Foods will halt production at its beef facility in Pasco, Wash., while local health officials test more than 1,400 workers there for the coronavirus. Workers will continue to be paid while the plant is closed. Tyson is working with health officials on a plan to resume production. Tyson also said it would close its meat plant in Shelbyville, Tenn., on Monday to do a deep cleaning.

• The German airline Lufthansa warned Thursday that it would require government bailouts after plummeting sales led to a loss of more than a billion euros in the first quarter. Passenger traffic has fallen to almost nothing and the second quarter will be even worse, Lufthansa said in a statement.

• Target reported Thursday that sales since February were up 7 percent, with in-store sales falling slightly and online purchases jumping 100 percent. The retailer also extended its $2 an hour emergency pay rate for workers through May 30.

Reporting was contributed by Amy Heimerl, Sapna Maheshwari, Kate Kelly, Emily Flitter, Clifford Krauss, David Yaffe-Bellany, Jason Karaian, Cade Metz, Gregory Schmidt, Patricia Cohen, Ben Dooley, Jeanna Smialek, Conor Dougherty, John Eligon, Karen Weise, Su-Hyun Lee, Vindu Goel, Niraj Chokshi, Jack Ewing, Carlos Tejada, Neal E. Boudette, Stanley Reed, Daniel Victor and Kevin Granville.