The coronavirus crisis threw at least 2.1 million Americans out of work last week despite the gradual reopening of businesses around the country, stoking fears Thursday that the scourge is doing deep and potentially long-lasting damage to the U.S. economy.
Amid a few glimmers of hope, most of the latest economic news from around the globe was likewise grim, as some of the world’s most populous countries continued to report rising infections and deaths.
The confirmed U.S. death toll topped 100,000, the highest in the world, on Wednesday.
The latest job-loss figures from the U.S. Labor Department bring to 41 million the running total of Americans who have filed for unemployment benefits since the coronavirus shutdowns took hold in mid-March.
There were some encouraging signs: The overall number of Americans currently drawing jobless benefits dropped for the first time since the crisis began, from 25 million to 21 million. And first-time applications for unemployment have fallen for eight straight weeks, as states gradually let stores, restaurants and other businesses reopen and the auto industry starts up factories again.
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0:58 Coronavirus outbreak: Brazil’s COVID-19 death toll surprasses the United States’
Coronavirus outbreak: Brazil’s COVID-19 death toll surprasses the United States’
But the number of U.S. workers filing for unemployment is still extraordinarily high by historical standards, and that suggests businesses are failing or permanently downsizing, not just laying off people until the crisis can pass, economists warn.
“That is the kind of economic destruction you cannot quickly put back in the bottle,” said Adam Ozimek, chief economist at Upwork.
The U.S. unemployment rate was 14.7 per cent in April, a level not seen since the Depression, and many economists expect it will be near 20 per cent in May.
The figures come amid an intensifying debate in Congress over whether to extend $600 in extra weekly federal unemployment benefits, provided under rescue legislation passed in March but set to expire July 31.
Democrats have proposed extending the payments, while Republicans have argued that the extra money could discourage laid-off workers from returning to jobs that pay less than they are getting on unemployment.
2:25 Major outbreaks in countries that first downplayed the crisis
Major outbreaks in countries that first downplayed the crisis
Kelly Kelso, a 30-year-old roadie from Nashville for the rock group Foreigner, got her first unemployment check last week after more than eight weeks of waiting. She said she is still receiving far less in benefits than the $1,250 per week or more that she made on tour.
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Though she is reluctant to leave the music industry, she said, “I have a cosmetology license. If all else fails, I could go back to doing hair.”
Another looming storm cloud: Economists say the sharp loss of tax revenue for state and local governments is likely to compound the damage from the shutdowns by forcing additional public-sector layoffs in the coming weeks.
Those layoffs have just recently started showing up in the weekly jobless claims report. Washington state, for example, reported layoffs of government employees.
Job cuts are also appearing far beyond the initially hit industries such as restaurants and stores, a sign that the damage is spreading even as businesses reopen. Washington state said it saw layoffs in insurance, and New York state reported job cuts by information technology companies.
Economists say many of the jobs lost are never coming back, and double-digit unemployment could persist through 2021.
And as discouraging as the numbers are, the real picture may be worse. The government counts people as unemployed only if they’re actually looking for a job, and many Americans probably see no point in trying when so many businesses are shut down.
Airlines and aircraft manufacturers are struggling after air travel plummeted early in the outbreak. Boeing is cutting more than 12,000 U.S. jobs through layoffs and buyouts, many expected to be in the Seattle area. European budget airline Easyjet said it will cut up to a third of its 15,000 employees. American Airlines plans to eliminate about 5,100 jobs.
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1:50 What the theme park experience could look like in our new reality
What the theme park experience could look like in our new reality
Amtrak likewise announced it will lay off about 20 per cent of its 18,000 workers amid a collapse in train ridership.
A number of European countries have strong safety-net programs that are underwriting the wages of millions of workers and keeping them on the payroll instead of adding them to the ranks of the unemployed. But the economic damage is mounting there, too.
Nissan is rolling back production in Spain in a move the government said could lead to 3,000 direct job cuts and thousands more losses at the automaker’s suppliers. And French unemployment claims jumped 22 per cent in April, with 843,000 more people seeking work.
Elsewhere around the world, India saw another record daily jump in coronavirus cases. Russia reported a steady increase in its caseload, even as the city of Moscow and provinces across the vast country moved to ease restrictions in sync with the Kremlin’s political agenda.
And South Korea reported its biggest jump in infections in more than 50 days, a setback that could erase some of the hard-won gains that have made it a model for the rest of the world.
Worldwide, the virus has infected more than 5.7 million people and killed over 355,000, with the U.S. having the most confirmed cases and deaths, according to a tally by Johns Hopkins University. Europe has recorded about 170,000 deaths.
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The true dimensions of the disaster are widely believed to be significantly greater, with experts saying many victims died without ever being tested.
Associated Press reporters from around the world contributed to this report.
TOKYO (AP) — Japanese technology group SoftBank swung back to profitability in the July-September quarter, boosted by positive results in its Vision Fund investments.
Tokyo-based SoftBank Group Corp. reported Tuesday a fiscal second quarter profit of nearly 1.18 trillion yen ($7.7 billion), compared with a 931 billion yen loss in the year-earlier period.
Quarterly sales edged up about 6% to nearly 1.77 trillion yen ($11.5 billion).
SoftBank credited income from royalties and licensing related to its holdings in Arm, a computer chip-designing company, whose business spans smartphones, data centers, networking equipment, automotive, consumer electronic devices, and AI applications.
The results were also helped by the absence of losses related to SoftBank’s investment in office-space sharing venture WeWork, which hit the previous fiscal year.
WeWork, which filed for Chapter 11 bankruptcy protection in 2023, emerged from Chapter 11 in June.
SoftBank has benefitted in recent months from rising share prices in some investment, such as U.S.-based e-commerce company Coupang, Chinese mobility provider DiDi Global and Bytedance, the Chinese developer of TikTok.
SoftBank’s financial results tend to swing wildly, partly because of its sprawling investment portfolio that includes search engine Yahoo, Chinese retailer Alibaba, and artificial intelligence company Nvidia.
SoftBank makes investments in a variety of companies that it groups together in a series of Vision Funds.
The company’s founder, Masayoshi Son, is a pioneer in technology investment in Japan. SoftBank Group does not give earnings forecasts.
Shopify Inc. executives brushed off concerns that incoming U.S. President Donald Trump will be a major detriment to many of the company’s merchants.
“There’s nothing in what we’ve heard from Trump, nor would there have been anything from (Democratic candidate) Kamala (Harris), which we think impacts the overall state of new business formation and entrepreneurship,” Shopify’s chief financial officer Jeff Hoffmeister told analysts on a call Tuesday.
“We still feel really good about all the merchants out there, all the entrepreneurs that want to start new businesses and that’s obviously not going to change with the administration.”
Hoffmeister’s comments come a week after Trump, a Republican businessman, trounced Harris in an election that will soon return him to the Oval Office.
On the campaign trail, he threatened to impose tariffs of 60 per cent on imports from China and roughly 10 per cent to 20 per cent on goods from all other countries.
If the president-elect makes good on the promise, many worry the cost of operating will soar for companies, including customers of Shopify, which sells e-commerce software to small businesses but also brands as big as Kylie Cosmetics and Victoria’s Secret.
These merchants may feel they have no choice but to pass on the increases to customers, perhaps sparking more inflation.
If Trump’s tariffs do come to fruition, Shopify’s president Harley Finkelstein pointed out China is “not a huge area” for Shopify.
However, “we can’t anticipate what every presidential administration is going to do,” he cautioned.
He likened the uncertainty facing the business community to the COVID-19 pandemic where Shopify had to help companies migrate online.
“Our job is no matter what comes the way of our merchants, we provide them with tools and service and support for them to navigate it really well,” he said.
Finkelstein was questioned about the forthcoming U.S. leadership change on a call meant to delve into Shopify’s latest earnings, which sent shares soaring 27 per cent to $158.63 shortly after Tuesday’s market open.
The Ottawa-based company, which keeps its books in U.S. dollars, reported US$828 million in net income for its third quarter, up from US$718 million in the same quarter last year, as its revenue rose 26 per cent.
Revenue for the period ended Sept. 30 totalled US$2.16 billion, up from US$1.71 billion a year earlier.
Subscription solutions revenue reached US$610 million, up from US$486 million in the same quarter last year.
Merchant solutions revenue amounted to US$1.55 billion, up from US$1.23 billion.
Shopify’s net income excluding the impact of equity investments totalled US$344 million for the quarter, up from US$173 million in the same quarter last year.
Daniel Chan, a TD Cowen analyst, said the results show Shopify has a leadership position in the e-commerce world and “a continued ability to gain market share.”
In its outlook for its fourth quarter of 2024, the company said it expects revenue to grow at a mid-to-high-twenties percentage rate on a year-over-year basis.
“Q4 guidance suggests Shopify will finish the year strong, with better-than-expected revenue growth and operating margin,” Chan pointed out in a note to investors.
This report by The Canadian Press was first published Nov. 12, 2024.
TORONTO – RioCan Real Estate Investment Trust says it has cut almost 10 per cent of its staff as it deals with a slowdown in the condo market and overall pushes for greater efficiency.
The company says the cuts, which amount to around 60 employees based on its last annual filing, will mean about $9 million in restructuring charges and should translate to about $8 million in annualized cash savings.
The job cuts come as RioCan and others scale back condo development plans as the market softens, but chief executive Jonathan Gitlin says the reductions were from a companywide efficiency effort.
RioCan says it doesn’t plan to start any new construction of mixed-use properties this year and well into 2025 as it adjusts to the shifting market demand.
The company reported a net income of $96.9 million in the third quarter, up from a loss of $73.5 million last year, as it saw a $159 million boost from a favourable change in the fair value of investment properties.
RioCan reported what it says is a record-breaking 97.8 per cent occupancy rate in the quarter including retail committed occupancy of 98.6 per cent.
This report by The Canadian Press was first published Nov. 12, 2024.
