A jump in virus cases in states like Texas and California may spook consumers.

Retail Sales Rose and Jobless Claims Held Steady: Live Updates

Retail Sales Rose and Jobless Claims Held Steady: Live Updates

Retail Sales Rose and Jobless Claims Held Steady: Live Updates

Credit…Nitashia Johnson for The New York Times

Retail sales climbed 7.5 percent in June after a sharp rebound in May, the Commerce Department said Thursday, as federal stimulus checks and tax refunds continued to fuel a burst of summertime spending at newly reopened stores and restaurants. But the good news may be petering out as that money dries up and the coronavirus pandemic surges around the United States.

The jumps in deaths and cases in Florida, Texas and California, in particular, are putting the specter of another shutdown on the horizon and may spook consumers who were beginning to emerge from “lockdown fatigue.” That may be a blow for retailers that just reopened and were already facing the significant challenge of bringing customers back into stores that are now outfitted with safety measures like plexiglass barriers, face masks and tape markings to signify social distancing protocols.

The June data followed a May jump that was the largest monthly surge on record, even before it was revised up to 18.2 percent — but that had followed two months of record declines. While overall sales are within 1 percent of where they were in February, that figure masks major shifts that have taken place in what people are buying and whether they are shopping from home.

Change from

Feb. 2020 level

Monthly retail and food sales

In June, categories like restaurants and bars, electronics and appliance stores and clothing and clothing accessories saw jumps, but still tumbled overall from a year earlier. There was also a surge in spending for sporting goods and books, with sales in that category increasing 27 percent from May. Grocery stores experienced a slight decline in sales, as people started to eat more meals outside their homes. Spending on motor vehicles increased from May and was up from last year.

Change in June

retail sales from:

Sporting goods/



Food service/

drink places

Building materials/

garden supplies

Change in June

retail sales from:

Sporting goods/hobbies/

musical instruments/books

Food service/drink places

Building materials/

garden supplies

“When people feel safe about their health, there is a real desire to shop again,” said Michelle Meyer, head of U.S. economics at Bank of America.

But shoppers pulled back as soon as the virus began surging in parts of the country that had been largely spared from the pandemic early on, Ms. Meyer said.

“Looking ahead to July or August it starts to become more challenging to repeat the gains we have been seeing,” she said.

Economists at Morgan Stanley said in a note last week that the resurgence of Covid-19 cases in the southern and western parts of the U.S. “keeps us cautious on the durability of the consumer recovery in the near-term.” Even without new state and local measures, they wrote, more risk aversion and voluntary social distancing could cause the spending rebound in May and June to deteriorate.

Many retailers that were deemed nonessential reopened in May and June and now face the prospect of a second closure. Apple, for example, has re-closed about 100 U.S. stores in the past month based on rising case counts in certain states.

As coronavirus cases surged in many parts of the country and new restrictions on business were imposed, 1.3 million new claims for state unemployment benefits were filed last week, virtually the same number as the week before, the Labor Department reported Thursday.

Initial weekly unemployment claims,

both regular and those under the Pandemic Unemployment Assistance program

Initial weekly unemployment claims, both regular and those under the Pandemic Unemployment Assistance program

It was a slight drop from 1.31 million in the week ending July 4.

Although weekly claims have plunged from late March and early April, when they twice topped six million, they have exceeded one million for 17 weeks.

New claims for Pandemic Unemployment Assistance, the government’s emergency program for laid-off freelancers, the self-employed and others not covered by traditional unemployment benefits, fell to 928,000 from slightly over one million a week earlier. That number, unlike the figure for state claims, is not seasonally adjusted.

Experts have been watching closely to see what economic impact the renewed coronavirus outbreak in states like California, Texas and Florida will have on the overall economy.

The latest figures come as a key element of financial support for the unemployed — the $600 weekly supplemental payments from the federal government — is set to expire this month.

Low-wage workers have been especially hard hit by the pandemic, accounting for more than half the total decline in employment, according to new research from Oxford Economics.

“The labor market is not as bad as it was a couple of months ago, but we are still in a very deep hole,” said Gus Faucher, chief economist at PNC Financial Services Group in Pittsburgh.

Credit…Zack Wittman for The New York Times

In some of the states hardest hit by the resurgence in the coronavirus, initial jobless claims jumped last week, a sign of the renewed economic toll wrought by the pandemic.

Florida saw an increase of 62,467 new claims, nearly double the new filings a week earlier. Georgia recorded a jump of 31,176, while new claims in California rose by 22,941. Unlike the overall numbers for filings nationwide, this data is not seasonally adjusted.

Washington State, another new hot spot, reported 12,272 new claims.

One exception to the trend was Texas, where claims fell by 11,509, despite a resurgence in the virus. New filings had risen by more than 20,000 the previous week.

As caseloads have rebounded, state authorities have wrestled with the proper response. The increases in the week ending July 11 suggest that as businesses like restaurants and bars close again, workers find themselves confronting unemployment for a second time this year.

States that have been better able to control the spread of the virus posted healthier figures in terms of the jobs market. In New York, where outdoor dining has returned and many businesses have reopened, new claims fell by 2,157, while initial filings sank by 10,055 in New Jersey.

Credit…Nitashia Johnson for The New York Times

The federal government’s $600 weekly supplemental payment to unemployed Americans has been a major boost both for recipients and for the economy, according to research landing as Congress debates whether to extend the payments past July.

An analysis by economists at the JPMorgan Chase Institute and the University of Chicago found that workers quickly increased their spending once unemployment payments began to arrive in their bank accounts. In fact, they spent about 10 percent more than they did before the pandemic.

That’s not surprising given estimates that as many as two-thirds of workers on unemployment have been receiving more money than they earned in their jobs, thanks to the federal supplement. Should that benefit expire as scheduled at the end of the month, the analysis suggests, there would be abrupt consequences not only for millions of households, but also for the corners of the economy where they’ve been spending this money.

Congress and the White House have yet to agree on extending the payments, or whether to cap them at a less generous payout as the economic crisis stretches deeper into summer.

The economists’ analysis was based on about 60,000 Chase customers in 10 states whose checking accounts show a loss of wages earlier in the crisis and then the deposit of weekly unemployment payments.

Unemployment benefits for many workers are sent on prepaid debit cards, not deposited into bank accounts, so those captured in the study are likely on average to be more financially stable than typical jobless workers. That means the results may even underestimate the effect of the expanded unemployment benefits on increasing consumption.

Monthly rank of sales across retail sectors from highest to lowest

Food service/drink places

Building materials/garden


Sporting goods/hobbies/

musical instruments/books

Monthly rank of sales across retail sectors from highest to lowest

Food service/drink places

Building materials/garden supplies

Sporting goods/hobbies/musical


The psyche of the American shopper is volatile. Just ask Andrew Moquin, who reopened his jewelry store early last month, after three months of lockdown.

He predicted customers, flush with money they had not been spending on trips, restaurants and shopping during the pandemic, would come charging back. But business was slower than he expected at his store, Andrews Jewelers, in a suburb of Buffalo, N.Y.

“During those first few weeks out of the gate, consumers were in disbelief,” he said. “They were calling me daily asking me ‘Are you really open again?’”

But over the past two weeks, it was like a switch flipped and sales have “been on fire.” With the number of coronavirus cases declining in New York, and businesses staying open, Mr. Moquin’s customers are back in force, buying “anything with diamonds.”

“I feel like the consumers are just fed up,” he said. “They are moving on with their lives and they are saying, ‘I can’t solve these problems,’ whether it be Covid-19 or the divisiveness in the political arena. They want to be happy or they want their loved ones to be happy. You can only contract for so long before something expands.”

Connie Medina has seen no such expansion since she reopened her shop, Your CBD Store, in Albany, N.Y., on June 3.

“I figured people would be coming out in droves to purchase what they needed,” Ms. Medina said.

At first, a few stalwart customers did return to buy up CBD oils and edible products that are used for healing and wellness. But the foot traffic along her street and to nearby restaurants has been sparse.

“It’s been very very slow,” said Ms. Medina, whose store sits on New Scotland Avenue. “I think with the economy, people are saving their money and not waiting to shop or to be out and about. If they do shop, they are doing it online. Mom-and-pop stores are not on people’s minds right now.”

Credit…George Etheredge for The New York Times

Stocks on Wall Street slipped on Thursday, following global markets lower, as the market’s turbulent week continued with investors assessing new reports on the world’s two largest economies.

Data on U.S. retail sales in June and unemployment claims for last week showed the economy was continuing to limp out of a coronavirus-driven slump as several states eased lockdowns from May. That recovery, however, is already threatened by a recent surge in domestic coronavirus cases that have forced states to shut down again.

Retail sales climbed 7.5 percent in June after a sharp rebound in May, the Commerce Department said, a surge in spending fueled in part by federal stimulus checks and tax refunds. About 1.3 million new claims for state unemployment benefits were filed last week, virtually the same number as the week before, the Labor Department reported.

Earlier, China reported that its economy grew 3.2 percent in the second quarter, after contracting 6.8 percent in the first three months of 2020, but its retail sales numbers were weak.

The S&P 500 fell about half a percent in early trading. Stock markets in Europe and Asia were also lower. In a reversal of Wednesday’s trading, stocks that are likely to benefit most from a return of travel when the pandemic eventually recedes — airlines, hotel operators and travel websites like Expedia Group — were the worst performers in the S&P.

Also weighing on markets: The White House said on Wednesday it had not ruled out further sanctions on top Chinese officials to punish China for its handling of Hong Kong. The United States also said it was studying the national security risks of social media applications including China’s TikTok and WeChat.

Oil prices fell after OPEC and allies such as Russia agreed to taper record supply curbs from August, though the drop was cushioned by hopes for a swift pickup in U.S. demand after a big drawdown from the country’s crude stocks.

  • The number of hours people worked in Britain dropped to its lowest level in more than two decades, official statistics showed on Thursday. Hours worked between March and May fell by nearly 17 percent from a year earlier, the steepest decline since estimates began in 1971. The outlook is worsening. A survey by the British Chamber of Commerce found that 29 percent of businesses expected to lay people off in the next three months.

  • American Airlines told employees on Wednesday that it could furlough as many as 20,000 people starting Oct. 1, after federal stimulus funds expire. Despite planning to send out legally required warnings to 25,000 employees, American said it expects to be overstaffed by about 20,000 workers this fall. The warnings, which the airline started sending on Wednesday, will go to nearly 10,000 flight attendants, 3,200 maintenance workers, 2,900 passenger service employees and 2,500 pilots, among others.

  • J.C. Penney, the 118-year-old retailer that filed for bankruptcy in May, said on Wednesday that it would cut 1,000 corporate, field management and international jobs, as the company shrinks and closes 152 stores. The layoffs are separate from job cuts tied to the retailer’s first round of store closures, where most liquidation sales have started. A spokeswoman for J.C. Penney has said that the retailer plans to close up to 250 locations over all, which would leave it with roughly 600 stores.

Credit…Scott McIntyre for The New York Times

Economists see both hopeful and worrying signs about the health of the American consumer in Thursday’s retail sales figures.

The 7.5 percent increase in retail sales in June from the previous month is “clear evidence that people are returning to stores,” said Michelle Meyer, head of U.S. economics at Bank of America.

But Ms. Meyer said that much of the rebounding sales came in the first part of the month before new infections began spreading rapidly through states like Texas, Florida and California. She says that toward the end of last month and in the first few weeks of this month, consumers retreated again, even before states imposed new lockdowns.

“There was a real difference between the start and the end of the month,” she said.

The reality is that huge swaths of the retail, service and entertainment economy were still shut down in June, including movie theaters and many indoor malls. And even as some venues and stores reopened in states like New York, their closure in the states with rising infections is diminishing those gains.

The end of the supplemental unemployment benefits, totaling $600 a week, later this month could also deflate spending later in the summer. Back to school spending is also a question mark because so many schools have not decided whether they will require students to work remotely again in the fall.

Looking ahead, Beth Ann Bovino, chief U.S. economist at S&P Global, said there were growing questions about whether the bounce in retail sales in May and June would be fleeting.

“People are scared that this recovery bounce might be one and done,” said Ms. Bovino.

Credit…Spencer Platt/Getty Images

Bank of America said Thursday that it had added $4 billion to the pool of funds it keeps to cover credit losses as it prepares for customers to default on their loans at an increasing rate once the government programs designed to support Americans through the coronavirus crisis come to an end.

The bank’s key performance measures remained fairly steady, despite the broader economic slowdown. Revenue for the quarter was $22 billion, compared to $23 billion during the same period a year ago. The bank earned $3.5 billion for the quarter, compared to $7.3 billion during the second quarter of 2019. It now has $21 billion set aside for credit losses.

Bank officials expect unemployment to remain in the double digits for the rest of the year and then fall to around 7 percent in 2021. But even though they are prepared for loan losses to rise, the officials said they were encouraged by recent customer activity.

“We’re seeing early signs of cautious optimism,” Paul D’Onofrio, Bank of America’s chief financial officer, said on a call with journalists on Thursday. Mr. D’Onofrio said that spending by bank customers had risen and the bank’s commercial clients were starting to repay the money they had quickly taken from revolving credit lines during the height of the lockdowns in March and April.

Credit…Jeenah Moon for The New York Times

Most American banks have held up reasonably well during the pandemic. And then there is Morgan Stanley.

The firm reported $3.2 billion in profit for the second quarter, up 45 percent from the same time last year and a record for the Wall Street institution. Sales also set a new high, reaching $13.4 billion as its primary business lines — investment banking, trading, lending and wealth management — reported robust results, despite the circumstances.

Morgan Stanley’s results may be the envy of the financial sector, which has been weighed down by increasing reserves for potential loan losses. Huge hikes in provisions hurt results at major lenders like Citigroup, JPMorgan Chase and Wells Fargo, but were less of a drag on earnings for Morgan Stanley or its chief rival, Goldman Sachs, which make most of their money from arranging deals and managing clients’ investments.

“The second quarter tested the model and we performed exceedingly well,” James P. Gorman, Morgan Stanley’s chief executive, who contracted Covid-19 earlier this year, said in a statement.

Morgan Stanley’s results outshone those of Goldman, which on Wednesday reported a big rise in revenue but flat earnings for the quarter. Goldman’s results were still praised by one market observer, in the context of the pain elsewhere in corporate America, as “too good — almost indecent.” So, what does that make Morgan Stanley’s?

Credit…Netflix, via Getty Images

Netflix will report quarterly earnings after the market closes on Thursday, and investors are anticipating a surge in subscribers. (The company’s first-quarter performance blew away expectations.)

Netflix said it expected 7.5 million more customers in the second quarter, based on “mostly guesswork.” (The company concedes its guidance is often wrong and encourages investors to ignore it.) In a note last week, Goldman Sachs predicted 12.5 million. There’s a chance that some people signed sooner because they’re still stuck at home, can’t figure out TikTok and don’t care for Quibi.

Netflix said its slate was on track, but that fresh programming would most likely slow in the current quarter. That’s important, because new shows drive new subscriptions. (Tip: “The Old Guard,” a smart, humane action epic starring Charlize Theron.)

Netflix had positive free cash flow last quarter, and it’s likely to keep it up in its latest results — but not for the rest of the year. Expect it to burn about $1 billion in 2020.

Credit…Kevin Frayer/Getty Images

China’s economy expanded 3.2 percent in the second quarter compared with the same period last year, officials said on Thursday. The recovery is a sign, with caveats, of the authoritarian government’s success in bringing the outbreak under control with widespread testing and travel restrictions.

By contrast, economies in Europe and the United States are still languishing as the pandemic forces cities to shut down and shoppers to stay home.

China’s growth from April through June is an abrupt turnaround from first quarter, when its economy shrank 6.8 percent, the first contraction that the government has acknowledged in nearly half a century.

The new figures partly reflect the restrictions that China imposed after its early missteps delayed the response to the outbreak and fed public anger, as well as the government’s continued reliance on infrastructure spending instead of domestic consumption.

But all the recent spending on highways and rail lines raises questions about whether China’s economic turnaround is sustainable and whether it can become the engine needed to drive the global economy out of a slump.

Factories in China are already cranking out furniture, consumer electronics and mass-market cars more quickly than consumers at home or abroad want to buy them.

“It looks like there is still a mismatch there — people are not consuming as much as previously,” said Sara Hsu, a visiting scholar in economics at Fudan University in Shanghai.

Sales of groceries and other essentials have stayed strong in China throughout the pandemic, but people’s willingness to spend money on restaurant meals and other nonessential goods and services has still not fully bounced back. Tens of millions of Chinese, particularly young people, also remain out of work, and the slowdown caused by the pandemic has widened the gap between the rich and the poor.

Asian stocks were down on Thursday after China released its economic data. Chinese equities fell about 1.5 percept, and markets slipped in Australia, Hong Kong, Japan and South Korea.

The official China Film Administration also said in a notice on Thursday that movie theaters in the Chinese mainland would gradually reopen starting next Monday. Bookings will be limited, and theaters will be regularly disinfected, the notice said.

Credit…Nicolas Ortega

Before the pandemic, end-of-life start-ups — companies that help clients plan funerals, dispose of remains and process grief — had experienced steady to moderate growth. Their founders were mostly women who hoped a mix of technology, customization and fresh thinking could take on the fusty and predominantly male funeral and estate-planning industries.

Still, selling death to people in their 20s and 30s wasn’t easy. Since the pandemic, this has changed. Millennials are newly anxious about their mortality, increasingly comfortable talking about it and more likely to be grieving or know someone who is.

“The stigma and taboos around talking about death have been way reduced,” said Suelin Chen, 38, a co-founder of Cake, a free service that catalogs users’ end-of-life wishes, instructions and documents.

This has driven conversation across social media, spurred interest in deathfluencers (they will discuss how funeral homes are responding to the coronavirus but also whether your pet will eat your eyeballs) and increased traffic to end-of-life platforms. From February to June, people signed up with Cake at five times the normal rate.

Another new company, Lantern, which calls itself “the single source of guidance for navigating life before and after a death,” saw a 123 percent increase in users, most of them under 45.

It’s a tricky opportunity for these start-ups to navigate. “When you have a brand that’s directly interfacing with people in the throes of loss and grief, you have to walk a fine line,” said Liz Eddy, 30, Lantern’s co-founder and chief executive.

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