The Latest Business News: Live Updates
The Latest Business News: Live Updates
A fresh snapshot of the labor market and the state of the economic recovery will arrive on Thursday when the Labor Department issues its weekly report on unemployment claims.
Amid a persistent drop in coronavirus cases, economists expect to see that new claims for state benefits ticked down again last week even as they remained extraordinarily high. While the economic crisis has probably peaked, they say, the lasting damage to the labor market is uncertain. That could become clearer in the coming months.
Unemployment claims “really have been at an elevated level for a long time,” said Diane Swonk, chief economist for the accounting firm Grant Thornton. “What’s going to be key going forward is do they plummet at some point in time or are there some longer-term issues?”
One marker that economists are watching is the number of people filing for extended benefits, an indication that they have exhausted their regular unemployment benefits, which last in many states for 26 weeks.
“What we’re concerned about is that more people who are falling out of regular claims are moving into extended claims,” said Gregory Daco, chief U.S. economist at Oxford Economics. “That is not a good sign.”
Congress continues to work on a $1.9 trillion relief package proposed by President Biden, but adding to the urgency is the expiration of supplemental unemployment benefits in mid-March. The Biden proposal would extend them through September.
There have been some positive signs for the job market in recent days. Retail sales surged 5.3 percent in January, a bigger gain than expected, most likely powered by the latest round of stimulus checks.
AnnElizabeth Konkel, an economist for the career site Indeed, said retail job postings on Indeed were 2.6 percent higher than in February 2020. Over all, job postings on the site are up 3.9 percent.
But the economy is still weak. The Labor Department’s employment report for January, which showed a gain of just 49,000 jobs, reaffirmed the pandemic’s devastation. Of the 22 million jobs that disappeared, roughly 10 million remain lost.
Thursday’s hearing about the recent GameStop trading mania, to be held at noon by the House Committee on Financial Services, will probably feature populist anger from both parties, directed at both the popular trading app Robinhood and the short sellers who targeted the video game retailer.
Representative Alexandria Ocasio-Cortez, a New York Democrat and a member of the financial services panel that is holding the hearing, called Robinhood’s decision amid the frenzy to halt some trades of GameStop “unacceptable.” Representative Rashida Tlaib, a Michigan Democrat who is also on the committee, called the decision “beyond absurd” and accused the app of “blocking the ability to trade to protect” hedge funds.
The frustration with Robinhood and the hedge funds reflects a national backlash against the power of the nation’s largest corporations. In the last decade, a growing number of lawmakers from both political parties have charged that American business has failed their constituents, setting off a political reckoning from Wall Street to Silicon Valley.
The anger against Robinhood is bipartisan. Senator Ted Cruz, Republican of Texas, shared Ms. Ocasio-Cortez’s comments in agreement in January. “Free the traders on @RobinhoodApp,” Senator Marsha Blackburn, Republican of Tennessee, said in a tweet of her own.
Return at noon for video and live coverage of the hearing.
Keith Gill, the former MassMutual wellness education director who advocated for shares of GameStop in his free time, is prepared to tell a House committee on Thursday that he never provided investment advice for a fee and did not “solicit anyone to buy or sell the stock for my own profit.”
The statement made no mention of the fact that Mr. Gill was a registered securities broker and a chartered financial analyst while he was posting online about GameStop under the alias Roaring Kitty and another pseudonym that included a vulgarity.
In the five-page statement, Mr. Gill described himself as a true believer in the fortunes of GameStop, a video game retailer, and said his postings online about the company had nothing to do with his job at MassMutual. He portrayed himself as a one-person operation doing battle with wealthy hedge funds, some of which were shorting shares of GameStop and betting on its collapse.
“The idea that I used social media to promote GameStop stock to unwitting investors is preposterous,” Mr. Gill said in the statement, which his lawyer provided to the House Committee on Financial Services in advance of Thursday’s hearing into the speculative and aggressive trading last month in shares of GameStop. “I was abundantly clear that my channel was for educational purposes only, and that my aggressive style of investing was unlikely to be suitable for most folks checking out the channel.”
He said he had shared his investment ideas online because he “had reached a level where I felt sharing them publicly could help others.”
Mr. Gill described himself as an average guy who earned a modest income and was effectively out of work for two years before landing at MassMutual in April 2019. The statement skirted over how much money he had made trading shares of GameStop — though he said he had told his family at one point that “we were millionaires.” He also did not mention that Massachusetts securities regulators are investigating whether he violated any securities industry rules and regulations with his social media postings.
On Tuesday, Mr. Gill and his former employer were named as defendants in a proposed class-action lawsuit that claimed he misled retail investors who bought shares of GameStop during its 1,700 percent rally only to suffer losses when the stock quickly gave back most of those gains. The lawsuit contends that MassMutual and its brokerage arm did not properly supervise Mr. Gill, who was an employee until a few weeks ago.
Mr. Gill’s lawyer, William Taylor, declined to comment on the lawsuit. A spokeswoman for MassMutual said the company was reviewing the matter with Mr. Gill.
Mr. Gill is one of a half-dozen witnesses scheduled to testify at the hearing, which will focus on the impact of short selling, social media and hedge funds on retail investors and market speculation.