April Jobs Data to Show Epic Losses And Soaring Unemployment
WASHINGTON (AP) — The economic catastrophe caused by the viral outbreak likely sent the U.S. unemployment rate in April to its highest level since the Great Depression and caused a record-shattering loss of jobs. With the economy paralyzed by business closures, the unemployment rate likely jumped to at least 16% — from just 4.4% in March — and employers cut a stunning 21 million or more jobs just in April, economists have forecast. If so, it would mean that nearly all job growth in the 11 years since the Great Recession had vanished in a single month. Yet even those breathtaking figures won’t fully capture the magnitude of the damage the coronavirus has inflicted on the job market.
U.S. Firms Return Virus Loans as Treasury Threatens Penalties
WASHINGTON (AP) — More than 40 public companies are pledging to return money to the government’s small business coronavirus fund. Treasury Secretary Steven Mnuchin is threatening criminal prosecutions for violating the rules of the program, which was intended to help small employers keep their workers during the pandemic. No company has explicitly mentioned the possibility of criminal prosecution as a reason for its decision. Other companies aren’t giving up the money quietly, and they blame the administration for what they call shifting and confusing rules. The administration has given companies until May 14 to give back money without penalty.
Uber Lays Off 3,700 as Virus Upends Sharing Economy
NEW YORK (AP) — The coronavirus pandemic has turned social distancing into a new way of life and companies whose business models bank on people’s willingness to share their personal space are now struggling. San Francisco-based Uber said Wednesday it’s cutting 3,700 full-time workers, or about 14% of its workforce, as people fearful of infection either stay indoors or try to limit contact with others when they do venture out. Rival Lyft announced last month it would lay off 982 people, or 17% of its workforce. Meanwhile home-sharing service Airbnb announced it was cutting a quarter of its workforce, or some 1,900 people. The San Francisco-based company expects its revenue to drop by more than half this year.
Small Businesses Cut Jobs While Waiting for Government Loans
NEW YORK (AP) — While thousands of small businesses waited for coronavirus relief money to arrive, they were shutting down and laying off workers. Two reports issued this week show the crisis that business owners have been struggling through since the coronavirus hit. Payroll provider ADP has said Wednesday its small business customers slashed more than 11 million jobs in April as they were forced to close or suffered steep revenue losses amid the virus outbreak. And nearly 30% of businesses questioned for a U.S. Chamber of Commerce-MetLife report said they had closed during April, a statistic that helps explain the big drop in payrolls last month.
NYT Says It Can ‘Ride Out’ Virus As Subscriber Numbers Boom
NEW YORK (AP) — The New York Times Co. added new digital subscribers at a record rate in the first quarter as the coronavirus spread, helping offset shrinking ad revenues. The newspaper publisher says it can ride out the effects of the pandemic because of its shift to relying more on digital reader revenue. Many news organizations are cutting pay, jobs or even shutting down as advertising craters. The Times says it expects a severe drop in ad revenue as well and says it will still have to cut jobs but will not do so in the newsroom.
With Factories Dark, GM Profit Slumps 88%; 2Q Likely Worse
DETROIT (AP) – General Motors’ first-quarter net income fell 88%, but it still managed to make $247 million despite the arrival of the global coronavirus pandemic.
U.S. automakers suspended production in much of the world in late March. For GM, that clipped revenue for the quarter by 6%, to $32.7 billion, but that’s not as bad as industry analysts had been expecting.
The company essentially has been without revenue since early March, meaning that the second quarter almost certainly will be worse.
However, GM plans to reopen most of its U.S. and Canadian factories starting May 18, and Chief Financial Officer Dhivya Suryadevara said there are signs that demand for cars and trucks exists despite the pandemic.
EU Forecasts ‘Recession of Historic Proportions’ This Year
BRUSSELS (AP) – The European Union predicted Wednesday “a recession of historic proportions this year” due to the impact of the coronavirus with a drop in output of more than 7%, as it released its first official forecast of the damage the pandemic is inflicting on the bloc’s economy.
The 27-nation EU economy is predicted to contract by 7.5% this year, before growing by about 6% in 2021. The group of 19 nations using the euro as their currency will see a record decline of 7.75% this year, and grow by 6.25% in 2021, the European Commission said in its Spring economic forecast.
“Europe is experiencing an economic shock without precedent since the Great Depression,” EU Economy Commissioner Paolo Gentiloni said in a statement.