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The state of the job market will become clearer on Thursday morning, when the Labor Department reports the latest data on new claims for unemployment benefits.
Last week, the number of initial claims for unemployment benefits dropped below one million for the first time since the coronavirus pandemic hit in March. Another decline would suggest that layoffs are receding and that the labor market is stabilizing in states with recent virus surges.
Economists on Wall Street are looking for new filings to total 920,000, compared with 963,000 a week ago. Despite the improvement, the recovery in the labor market has a long way to go. Before the pandemic, new weekly claims hovered in the 220,000 range.
“This is not a sign of a healthy labor market,” said Carl Tannenbaum, chief economist at Northern Trust in Chicago.
If claims drop, it will be the third consecutive weekly decline. That’s a contrast to July, when the number of people filing for unemployment jumped amid a resurgence of the virus in many parts of the country.
Either way, employers seem hesitant to rapidly add to payrolls.
“We won’t see a renewal of hiring until the pandemic is under much better control,” Mr. Tannenbaum added. “We have made substantial and rapid improvement in the last three months, but improvement from here will prove slower and more difficult.”
Wall Street was set to follow stock indexes in Europe and Asia lower on Thursday, a day after minutes from the Federal Reserve’s last meeting revealed concerns that the U.S. economy needed more financial support from Congress.
Futures for the S&P 500 were slightly lower, predicting a small drop at the start of trading in New York. France’s CAC 40, down about 1 percent, led the European indexes lower. Asian indexes broadly lost ground.
U.S. 10-year Treasuries were rising in price as investors sought a less-risky option than stocks. Oil prices were lower, while gold was up 2.5 percent.
A new measure of the health of the U.S. job market will be released later today: the weekly tally of new claims for state unemployment benefits. The tally has fallen for two consecutive weeks, and last week it fell below one million for the first time since the pandemic hit in March.
The concerns expressed by Fed policymakers at their late-July meeting came as coronavirus infections were surging in the United States, and much of the federal government’s emergency support for unemployed workers was expiring. “Uncertainty surrounding the economic outlook remained very elevated,” the minutes noted.
Since then the incidence of new cases in the United States has trended downward, but the White House and Congress have failed to agree on a new plan to support workers and distressed businesses.
The minutes rattled Wall Street, which has been soaring lately, and the S&P 500 closed lower. But earlier in the day, Apple briefly reached a valuation of $2 trillion, another milestone for the maker of iPhones, Mac computers and Apple Watches, punctuating how the pandemic has been a bonanza for the tech giants.
Work sharing programs are extraordinarily popular among economists, Republican and Democratic policymakers, employers and workers — at least those who have heard of them. The problem is that few have, even though economists say work sharing is one of the best ways to strengthen the labor market during a downturn.
Of the roughly 30 million people receiving unemployment benefits, only 451,000 — just 1.5 percent — are getting them through a shared work program.
Congress sweetened the program’s appeal during the pandemic, promising as part of the CARES Act that the federal government would pick up the cost from the states through the end of the year, without an overall cap, but nearly half of all states still don’t have such a program.
“I’m sick of this being the ‘best kept secret,’” Suzan LeVine, commissioner of Washington’s Employment Security Department, said of the program, officially titled short-time compensation. “It is the diamond in the rough of the unemployment benefits system.”
Washington State, which started its program in 1983, has vastly expanded participation since the pandemic. From March to August last year, 688 businesses took part; now 3,560 are doing so. One in nine Washington workers receiving state jobless benefits is getting them through work sharing.
Ted Brown Music is one business taking part. Although program rules can vary by state, companies must apply individually, and file a separate plan for each unit or category of workers. Ted Brown Music was approved within two weeks.
Now 150 of its employees are taking part. They are paid an hourly wage for the time they work, and receive state unemployment benefits for the hours they don’t.
Jim Stevens, who joined the company in 1970 and knew its founder, was laid off for six weeks after the pandemic hit. “That was just terrible,” said Mr. Stevens, a salesman in the flagship Tacoma store that his wife, Ellie, manages. “I’ve never been unemployed for any major period in my life.” He was later brought back to work 28 hours a week under the work sharing program.
Qantas Airways, Australia’s national carrier, swung to a loss of 1.96 Australian dollars, or $1.4 billion, for the 2020 financial year, as the pandemic devastated the airline industry worldwide. The loss was driven primarily by a write-down of assets, including its A380 fleet, and restructuring costs intended to help it survive during the pandemic, the airline said in a statement on Thursday. “The impact of Covid on all airlines is clear,” the company’s chief executive, Alan Joyce, said in the statement. “It’s devastating and it will be a question of survival for many.”
Estée Lauder Companies said Thursday that it would cut about 1,500 to 2,000 jobs globally and close 10 to 15 percent of its stores. It reported that in the fourth quarter net sales fell to $2.43 billion from $3.59 billion a year ago. The company operates cosmetic and skin care brands like MAC Cosmetics, La Mer and Jo Malone London.