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New claims for unemployment fell last week, the government reported on Thursday, the latest sign that the labor market’s recovery, however slow and unsteady, is continuing.
A total of 710,000 workers filed first-time claims for state benefits during the week that ended Feb. 20, a decrease of 132,000, the Labor Department said. In addition, 451,000 new claims were filed for Pandemic Unemployment Assistance, a federal program covering freelancers, part-timers and others who do not routinely qualify for state benefits, a decline of 61,000.
Neither figure is seasonally adjusted. On a seasonally adjusted basis, new state claims totaled 730,000, a decline of 111,000.
Although initial jobless claims are nowhere near the eye-popping levels seen last spring, they are still extraordinarily high by historical standards. There are roughly 10 million fewer jobs than there were last year at this time.
Coronavirus caseloads have been dropping amid efforts to get vaccines to people who are most vulnerable. But until employers and consumers feel that the pandemic is under control, economists say, the labor market won’t fully recover.
“Until people feel this is sustained and that there’s not another huge wave coming, I can’t imagine we’re going to see big changes in jobless claims for a while,” said Allison Schrager, an economist at the Manhattan Institute.
Leaders at the Federal Reserve and Treasury Department have said that the damage to the labor market is much deeper than has been reflected in published government figures. They estimate that the true unemployment rate is closer to 10 percent than to the 6.3 percent recorded in the Labor Department’s most commonly cited measure.
Testifying before Congress this week, Jerome H. Powell, the Federal Reserve chair, said: “The economic recovery remains uneven and far from complete, and the path ahead is highly uncertain.”
Those hardest hit are in the service industry, particularly in restaurants, hospitality, leisure and travel. At the career site Indeed, job postings over all are 5 percent higher than they were a year ago, with demand greatest for warehouse and construction workers and drivers, said AnnElizabeth Konkel, an economist at the company.
“We need job postings to stay elevated above prepandemic baseline to pull people back into the labor market,” she said.
Shares in GameStop climbed 76 percent in early trading on Thursday, following another surge in the share price of the video game retailer that was at the center of a retail trading frenzy last month.
On Wednesday, GameStop’s shares doubled to $91.71 and the volume of trading was more than 10 times the level of the previous day.
Some of the popular posts on Reddit’s Wallstreetbets forum, where users have been hyping up certain stocks in memes, read “ROUND 2!” and “THE COMEBACK!!!!!” Other meme stocks also rose: AMC shares gained 18 percent and BlackBerry, Nokia and Koss were also higher.
Earlier this week, GameStop announced its chief financial officer would leave the company next month. The company is under pressure from a large shareholder to shift from a brick-and-mortar business to a digital and e-commerce firm.
Other market news
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The S&P 500 was slightly lower in early trading, a dip led by technology stocks.
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Bond yields continued to jump. The yield on 10-year U.S. Treasury notes rose 5 basis points, or 0.05 percentage point, to 1.43 percent. This month, the yield has climbed 37 basis points.
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Analysts at Bank of America raised their forecast for bond yields, expecting the 10-year yield to be at 1.75 percent at the end of the year because of stronger economic growth. Last month, they forecast 1.5 percent for year-end.
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Federal Reserve policymakers have been playing down concerns about inflation. In a second day of testimony to lawmakers on Wednesday, the Fed chair, Jerome H. Powell, reiterated his message that a short-term jump in inflation, which is expected this year, is different from sustained higher inflation. And so the central bank could keep its easy money policies for awhile. Separately, the vice chair, Richard Clarida, said monetary policy was “entirely appropriate not only now, but — given my outlook for the economy — for the rest of the year.”
Coinbase, the most valuable cryptocurrency company in the United States, filed to go public on Thursday amid a surge in prices in digital money.
It is the latest milestone for Coinbase, which was founded in 2012 as a site for buying and selling cryptocurrencies like Bitcoin and has now become a giant in the industry, with 43 million retail traders and 7,000 institutions as customers. Its fortunes have soared along with the price of Bitcoin, which was trading at more than $51,000 apiece as of Thursday.
Coinbase pulled back the curtains on its finances in a filing with the Securities and Exchange Commission, revealing that it earned $322.3 million last year, on top of $1.3 billion in revenue. That compares with a $30.4 million loss atop $533.7 million in revenue for 2019.
The company makes money from fees charged for customer trades. In a letter to prospective investors, its co-founder and chief executive, Brian Armstrong, warned that the company’s financials may be volatile, because they are tied to the sometimes whipsawing prices of cryptocurrencies.
The company drew controversy last fall when Mr. Armstrong told employees to leave their social activism out of the workplace. Current and former employees have also complained about the company’s management of Black workers.
The company is planning a direct listing, where it simply puts its privately traded shares onto a public stock market — the Nasdaq, in this case — as opposed to a traditional initial public offering.
Such deals have gained popularity among technology companies in recent years for being a simpler way to going public, especially if they do not need to raise money. Last month, Coinbase said it was pursuing a direct listing.
Michael Saylor, the chief executive of the business intelligence software firm MicroStrategy, believes deeply in Bitcoin and has urged other companies to shift their corporate cash into the cryptocurrency. That’s what MicroStrategy has been doing, in a bigger way than the others that have put Bitcoin on their balance sheets, the DealBook newsletter reports.
On Wednesday, MicroStrategy announced a $1 billion Bitcoin purchase, bringing its total spending on the cryptocurrency to more than $2 billion since the summer. MicroStrategy “remains focused on two corporate strategies,” Mr. Saylor said in a statement: expanding its software business and “acquiring and holding Bitcoin.” The company’s finance chief, Phong Le, said Bitcoin investments complemented the software business “by enhancing awareness of our brand and providing opportunities to secure new customers.”
Bitcoin’s price is currently double the average cost that MicroStrategy paid for them, implying a gain of nearly $2.5 billion. Before it started buying Bitcoin in August, MicroStrategy’s market capitalization was just over $1 billion. It is now nearly $8 billion, with its Bitcoin holdings overshadowing its software business.
“It’s amazing that a board of directors allowed this,” said Marc Lichtenfeld, a financial adviser, citing Bitcoin’s extreme volatility and its tenuous link to the company’s software business. Buying crypto in enormous amounts as a marketing tool will not affect the fundamental prospects of MicroStrategy’s business by adding to its earnings and cash flow, he noted.
“Regulators could have concerns,” said Richard Levin, a fintech lawyer at Nelson Mullins. “Any publicly traded company bringing a digital asset onto its balance sheet needs to proceed with caution.” It’s fine to buy an asset because it is appreciating, Mr. Levin said, but companies need to tread carefully to avoid the appearance that they are acquiring it to generate hype.
MicroStrategy isn’t alone in acquiring Bitcoin. The payments company Square announced a $170 million purchase this week and Tesla bought $1.5 billion worth of Bitcoin earlier this month. But money is Square’s business, and Tesla’s purchase was a much smaller share of its corporate cash, around 1 percent.
Companies that previously reoriented their businesses around cryptocurrency — beyond just buying a lot of it, like MicroStrategy — have run into trouble with the financial regulators in the past, like Overstock, the retailer and token purveyor, and Long Blockchain, the rebranded iced-tea maker that was delisted this week.
Nirav Modi, a jeweler whose designs once adorned the necks of A-list celebrities, has lost an extradition case in Britain’s high court. Mr. Modi is wanted by the Indian government to face charges of fraud, involving transactions totaling $1.8 billion with a state-run bank.
On Thursday, Judge Samuel Goozee said in a London court that there was enough evidence for Mr. Modi to face charges in India, The Associated Press reported.
The celebrity jeweler suffered a quick fall from grace a few years ago. He went from running an empire of luxury stores around the world, mingling with royalty and meeting with the Indian prime minister, Narendra Modi, to being a fugitive in early 2018 after authorities said they discovered that he used fraudulent documents to get loans from the Punjab National Bank to import diamonds and other jewels. He then fled.
Mr. Modi was eventually arrested in London in March 2019 and was denied bail. He attended the hearing on Thursday via video from prison, Agence France-Presse reported.
The case has captivated many people in India amid scrutiny of state-run banks. The Indian government has also been trying to extradite Vijay Mallya from London to face charges of fraud and money laundering. Mr. Mallya invested in airlines and alcohol brands and built a reputation as India’s “King of Good Times.” A court ruled in December 2018 that he should be extradited, but Mr. Mallya has delayed his departure through appeals.
Mr. Modi has 14 days to file an appeal the ruling. Next, Britain’s home secretary, Priti Patel, has to decide whether to order the extradition.
With the debate over raising the federal minimum wage heating up, Senator Bernie Sanders is putting the spotlight on some of the nation’s largest employers and their pay practices in a hearing on Capitol Hill on Thursday.
Walmart and McDonald’s, which have not yet raised their starting wages to $15 an hour, will be the primary focus of Mr. Sanders’s scrutiny.
Mr. Sanders, a Vermont independent, plans to highlight research by the Government Accountability Office showing that Walmart and McDonald’s are among the companies with the highest number of employees qualifying for Medicaid and food stamps in many states.
“One of the scandals in the current economy is that there are millions of workers working for starvation wages,” Mr. Sanders said in an interview this week.
The chief executives of Walmart and McDonald’s were invited to attend Thursday’s hearing of the Senate Budget Committee but declined. W. Craig Jelinek, the chief executive of Costco, which pays some of the highest wages in the retail industry, is the only top executive who agreed to testify.
“A small percentage of our work force may come to us on public assistance and we welcome them,” Walmart said in an email to Mr. Sanders’s office last week. “We hire them, train them and give them the chance to earn a paycheck. And we are immensely proud of their work and their continued efforts to successfully support themselves and their families.”
McDonald’s responded in a similar vein in a letter to Mr. Sanders’s office on Tuesday: “We appreciate the findings of the G.A.O. report that identify a small percentage of our work force that may utilize public assistance, and we work to prepare them for career opportunities both inside and outside of the McDonald’s system.”
In its letter, McDonald’s added that its average wage was nearly $12 an hour, but the company did not provide its starting wage nor respond to a follow-up request from The New York Times for the number.
Last week, Walmart said that it was raising the wages of 425,000 workers and that about half of its work force in the United States would earn at least $15 an hour. But the company’s chief executive, Doug McMillon, stopped short of saying whether the company would eventually extend a $15 minimum to all employees.
Mr. Sanders said Walmart’s profits continued to be supported by taxpayers, who are paying for the health care and food expenses of the company’s lowest-paid workers and further enriching the retailer’s founding family and large shareholders, the Waltons.
“I think the American people really should not have to subsidize through their taxes the wealthiest family in the world,” Mr. Sanders said. “We are going to make that point over and over and over again.”
A broad promotional effort to combat Covid-19 vaccine skepticism began rolling out on Thursday, backed by the nonprofit advertising group Ad Council and a coalition of experts known as the Covid Collaborative.
The campaign, “It’s Up to You,” encourages Americans to seek out facts about the available vaccines. The Ad Council commissioned research that concluded that 40 percent of the public had yet to decide whether to be vaccinated as soon as possible. In Black and Hispanic communities, which have been disproportionately affected by the pandemic, 60 percent of people do not feel fully informed, according to the study.
Public service announcements will appear in English and Spanish on television, social media and other platforms. More than 300 companies, community groups and public figures — including Facebook, iHeartMedia, the National Association for the Advancement of Colored People and Dr. Sanjay Gupta of CNN — contributed to the $52 million push, as did the Centers for Disease Control and Prevention.
Several spots point viewers toward a landing page, GetVaccineAnswers.org, using messages such as “Getting back to the moments we missed starts with getting informed” and this one: “You’ve got questions. That’s normal.” A punchy video from Google shows animated arms with colorful post-vaccination bandages coalescing into the shape of the United States, while an offering from Verizon juxtaposes scenes of human connection with images of weddings and graduations conducted over video chat.
The Ad Council endeavor is one of several concurrent campaigns aimed at raising awareness and acceptance of the vaccines, including efforts from vaccine producers such as Pfizer and Moderna.
NBCUniversal built a vaccination push around the informational site PlanYourVaccine.com, while the #ThisIsOurShot campaign features health care workers who have been vaccinated. In Britain, an ad debunking myths about the vaccine was broadcast simultaneously across several television channels this month, focusing on ethnic minority communities.
The Biden administration is hoping that its nominee for U. S. trade representative, Katherine Tai, who is scheduled to appear for her confirmation hearing on Thursday morning before the Senate Finance Committee, can serve as a consensus builder and help bridge the Democratic Party’s varying views on trade, Ana Swanson reports for The New York Times.
Ms. Tai, the chief trade counsel to the House’s powerful Ways and Means Committee, has strong connections in Congress, and supporters expect her nomination to proceed smoothly. But if confirmed, she will face bigger challenges, including filling in the details of what the Biden administration has called its “worker-focused” trade approach.
As trade representative, Ms. Tai will be a key player in restoring alliances strained under former President Donald J. Trump, as well as formulating the administration’s China policy, where she is expected to draw on prior experience bringing cases against China at the World Trade Organization during her time working in the office of the United States Trade Representative, from 2007 to 2014.
She will also take charge on matters that divide the Democratic Party, like whether to keep or scrap the tariffs Mr. Trump imposed on foreign products, and whether new foreign trade deals will help the United States compete globally or end up selling American workers short.
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Target said on Thursday that it would roll out Apple shops within its stores, starting with 17 locations with plans for more later this year. The areas will be overseen by Target tech consultants “who will receive specialized training from Apple,” Target said, and the chain will carry more Apple products online. Target has also struck new deals with Levi Strauss & Company and Ulta as malls and department stores continue to struggle.
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