U.S. unemployment claims are expected to approach 40 million, and counting.
The coronavirus pandemic has produced a somber Thursday ritual: the tally of unemployment claims across the United States.
In its report at 8:30 a.m. Eastern, the Labor Department is expected to put the figure for last week at 2.5 million, according to a consensus of analysts cited by Bloomberg. That would mean new claims are leveling off, but not declining, and would bring the nine-week total to about 39 million.
A recent household survey from the Census Bureau suggests that the pain is widespread: Almost 50 percent of adults said they or a member of their household had lost employment income since mid-March. Nearly 40 percent expected the loss to continue over the next four weeks.
And there is increasing concern that many jobs are not coming back, even for those who consider themselves laid off temporarily.
Nicholas Bloom, a Stanford University economist who is a co-author of an analysis of the pandemic’s effects on the labor market, estimates that 42 percent of recent layoffs will result in permanent job losses. “I hate to say it, but this is going to take longer and look grimmer than we thought,” he said of the path to recovery.
Asian markets traded flat on Thursday despite another exuberant day on Wall Street, while other indicators suggested investor enthusiasm was waning.
Major markets in Tokyo, Shanghai and Hong Kong teetered between gains and losses at midday, despite a jump of 1 to 2 percent in Wall Street indexes on Wednesday.
Further clouding the outlook, futures markets were predicting Wall Street would open lower. Prices for U.S. Treasury bonds rose, which is a sign of negative investor sentiment, as wary investors like to park their money in American debt.
Wall Street rose Wednesday on continued signs of a coronavirus recovery, but Asian investors woke up to more negative news. Japanese trade figures underscored the weakness of demand for the goods that its factories make. Heated rhetoric in Washington against China raised the prospect that relations between the world’s two biggest economies would deteriorate further. Investors also worried about worsening tensions between China and Australia, a country that depends on Chinese demand to fuel big parts of its economy.
Investors are awaiting word on China’s government spending plans, which are set to be disclosed on Friday when the country’s lawmakers meet for their annual conclave. While China’s economy is showing signs of emerging, its consumers remain reluctant to spend. Beijing faces growing pressure to increase spending to keep growth chugging along.
In other markets, oil continued to rise on futures exchanges amid signs that major producing countries are sticking with plans to curb output.
New economic data from Japan on Thursday showed the depth of the slump in global demand, a further bleak sign for a country that depends on exports for much of its growth.
Japan’s exports as measured by value slumped by more than one-fifth in April compared with a year earlier, the nation’s finance ministry reported. The slump was broad, with shipments to both the United States and Europe down by roughly one-third.
The drop was widely in line with economists’ estimates, according to surveys by Bloomberg and Reuters. But it was still the largest since 2009, as the world grappled with the financial crisis.
Japan never went as far as other countries that locked down their economies to stop the spread of the coronavirus. But its economy has nevertheless been hit hard by the pandemic, as well as by a typhoon late last year and a badly timed tax increase on consumers. On Monday, Japanese officials said the country’s gross domestic product shrank for the second straight quarter, making it the largest economy to fall into recession thus far amid the outbreak.
The rest of the world’s troubles are also weighing on Japan’s fortunes. The country is a major exporter of finished manufactured goods as well as key components, including the cameras in smartphones, sensors, high-end circuits and precision steel. As stores and factories remain closed around the world, exports will remain a weak spot for the world’s third largest economy.
Trade data offered one partial bright spot: Japan’s exports to China, its largest trading partner, fell only about 4 percent. Still, it underscores how much Japan will depend on China’s own recovery from the outbreak.
Stocks rose on Wednesday, rebounding from a late drop the day before, as investors were cheered by some strong results from retailers and another jump in oil prices lifted shares of energy producers.
Markets have been volatile this week, with stocks rallying Monday and then falling on Tuesday, mostly as investors assessed a drugmaker’s claim of progress on a coronavirus vaccine. The drugmaker, Moderna, said that a very small early-stage trial of the vaccine had shown potential.
But reporting that questioned the specificity of that claim knocked stocks back in the final hour of trading on Tuesday.
On Wednesday, more retailers reported better than expected results that encouraged investors. Lowe’s, the home supplies chain, reported an increase in comparable store sales in the first three months of the year. Target reported that digital sales in the first quarter had surged by 141 percent, though its shares fell slightly. Walmart, which had reported soaring sales the day before, added to its recent gains.
Delta Air Lines and United Airlines both jumped. Delta’s chief executive said in a television interview that the airline was likely to increase flight capacity during the summer as travel started to pick up, and United said it was working on a plan with Clorox and the Cleveland Clinic to reduce points of contact and promote social distancing for travelers.
The S&P 500 rose nearly 2 percent, and stocks in Europe also ended higher.
Oil prices continued their recent rally, with the U.S. crude benchmark climbing more than 5 percent above $33 a barrel. A number of energy stocks also rallied. Chevron and Exxon were each up about 3 percent.
After sinking to once unthinkable lows, oil prices have rebounded this month after oil producing nations cut output and consumption also picked up.
A week before Britain came to a standstill in mid-March, the Wessex Mill found itself fielding nearly 600 calls a day requesting one of the country’s hottest commodities: flour.
The mill in Oxford has produced nearly 13,000 small bags of flour each day during the coronavirus pandemic, a fourfold increase. Demand led Emily Munsey, a flour miller who runs the business with her father, to hire more staff and add afternoon and night shifts to keep the mill running 24 hours a day, seven days a week, for the first time in its 125-year history.
“It’s been very challenging as a company. The amount of work we’ve all had to do has increased a huge amount,” said Ms. Munsey, who has since scaled back to five days a week, though still around the clock, to give employees a weekend break. “Demand remains consistently obscene.”
Commercial mills produce nearly four million tons of flour each year in Britain, according to the National Association of British and Irish Flour Millers. With much of the country stuck at home, baking has surged, and retail-size flour bags have become scarce on grocery shelves.
“We’re an artisan flour mill,” said Ms. Munsey, whose customers include wholesalers and bakeries across Britain that order up to 10 tons of flour a week. “We’re not someone who has previously produced vast quantities of flour, and now people just want lots and lots and lots of flour.”
Catch up: Here’s what else is happening.
L Brands, the owner of Victoria’s Secret and Bath & Body Works, posted a first-quarter net loss of nearly $300 million on Wednesday and said that net sales fell 37 percent in the quarter to $1.65 billion. Sales at Victoria’s Secret fell by almost half, while Bath & Body Works was slightly better with an 18 percent decline, even though most of the company’s stores have been closed since March 17. The company, which recently scuttled a deal to sell Victoria’s Secret to a private equity firm, will hold its earnings call on Thursday morning.
Reporting was contributed by Patricia Cohen, Mohammed Hadi, Sapna Maheshwari, Carlos Tejada and Daniel Victor.