Moody’s Analytics predicts initial unemployment claims from last week could be 4.5 million, which would be the highest in history, as US businesses shutter to slow the spread of the coronavirus.
The weekly data is set to be released Thursday morning. Initial jobless claims soared to a record 3.28 million in the week ended March 21, according to the Department of Labor.
“COVID-19 has caused unemployment to surge and we look for US initial claims for unemployment insurance benefits this week to total 4.5 million, compared with the 3.283 million in the week ended March 21,” said Moody’s Chief Economist Mark Zandi in a statement.
However, Zandi said these high weekly numbers will not be reflected in this Friday’s upcoming March jobs report, which tracks job loss through the first two weeks of March.
“Though new filings surged over the past couple of weeks, the unemployment rate for March likely won’t increase that much,” he said. “The household survey, which is the basis for the unemployment rate, is conducted in the week that includes the 12th; initial claims were up around 70,000 to 281,000 during that week.”
American Airlines (AAL), which like other airlines has been encouraging employees to take unpaid leave during the current coronavirus crisis, is offering partial paid leave and enhanced retirement packages to its employees.
Those employees who take the voluntary leave will receive about 25% of their normal minimum pay, along with continued benefits. Those employees who have already agreed to unpaid leave will now receive the partial pay as well. Employees have until Friday to apply for leaves of up to 12 months.
They can also take a shortened work week with a 3- or 4-day week, with a corresponding reduction in pay.
The enhanced retirement plan will provide about 50% of guaranteed minimum pay as a benefit.
American, the world’s largest airline, had about 134,000 employees at the start of the year. It spent $12.6 billion on pay and benefits last year, by far its largest operating expense. It doesn’t need nearly as many employees as it plans to slash its April schedule by 60% and its May schedule by 80% in the face of more than 90% drop in US airline passengers overall.
Gap is the latest brand to put thousands of staffers on furlough as the coronavirus pandemic continues to decimate the retail industry.
The company, which also owns Old Navy and J.Crew, announced late Monday that it’s furloughing the “majority of its store teams in the United States and Canada.” That amounts to tens of thousands of people, according to the company.
Affected employees will still receive benefits. Gap’s leadership team will also take pay cuts.
“After taking the extraordinary measures of temporarily closing all of our company-owned stores in North America and Europe two weeks ago, we are now in a position where we must take deeper actions,” Gap CEO Sonia Syngal said in a press release.
Gap (GPS) shares are down nearly 60% for the year. Macy’s (M) and Kohl’s (KSS) both announced similar moves Monday.
US stock futures bounced back from earlier losses to trade in positive territory. Wall Street enjoyed a solid start to the week Monday, with all three major indexes posting strong closing numbers even as coronavirus concerns linger.
Here’s where they stand now:
Global stock markets moved higher Tuesday after data showed that manufacturing activity in China rebounded from record lows in March, even though the world’s second largest economy remains under huge pressure from the coronavirus.
China’s official manufacturing Purchasing Managers’ Index surged from 35.7 in February to 52 in March, surpassing the consensus estimate from analysts. Survey data also showed a rebound in other parts of the economy. A reading above 50 indicates growth compared to the previous month.
Most major indexes in Asia advanced, and European markets opened higher:
This doesn’t mean output has returned to levels seen before the coronavirus outbreak, according to Julian Evans-Pritchard, senior China economist from Capital Economics, who said it “simply suggests that economic activity improved modestly relative to February’s dismal showing.”
A sharp reduction in demand caused by the pandemic and a price war between Saudi Arabia and Russia have pushed oil prices down dramatically. US crude futures sunk below $20 on Monday, hitting their lowest intraday price since February 2002.
US oil futures rebounded slightly to $21.28 a barrel on Tuesday. Brent crude, the global oil benchmark, rose to $23.23 a barrel.