Initial U.S. jobless claims
Initial unemployment claims tumbled last week to their lowest point since 1969, the Labor Department reported Wednesday.
New filings for state benefits totaled 199,000 on a seasonally adjusted basis, a decline of 71,000 from the previous week.
The drop marks a milestone in the economy’s recovery from the pandemic. Weekly claims peaked at more than six million in April 2020 as the coronavirus forced businesses and consumers alike to shut down. As recently as early January, amid a winter resurgence of the coronavirus, new state claims exceeded 900,000 in one week.
Filing for unemployment benefits has come down sharply since then, but remained well above prepandemic levels until very recently.
Unemployment insurance was a key source of relief after the pandemic threw more than 20 million people out of work. To buttress state payments, emergency benefits were funded through federal pandemic relief bills, although those payments ceased in September, cutting off aid to 7.5 million people.
Despite a summer lull, the economy has been showing signs of life lately. Employers added 531,000 jobs in October, and most economists expect growth to pick up in the final quarter of the year, boosted by healthy consumer spending.
“Today’s data reinforce the historic economic progress we are making and the importance of building on that progress in the weeks ahead,” President Biden said in a statement about the unemployment claims report.
As one measure of progress, Mr. Biden pointed to the most recent tally of unemployment benefits of all sorts, from early November, which showed the number of people with continuing claims — those filing for benefits who have already filed an initial claim — at 2.4 million. The figure right before Thanksgiving last year was more than 20 million.
The biggest economic worry lately hasn’t been joblessness but inflation, which has been surging amid labor shortages, supply chain disruptions and higher energy prices.
In a separate report Wednesday, the Commerce Department said that household spending rose 1.3 percent in October, while personal income jumped 0.5 percent, before adjusting for inflation. It also showed that prices climbed by 5 percent in the 12 months through October.
The data for unemployment claims, although certainly welcome news, may not be quite as good as it seems. On an unadjusted basis, state claims rose last week. And employment remains 4.2 million below its level in February 2020, before the pandemic.
“While the labor market is recovering, we think the latest drop in claims may be overstated,” said Gregory Daco, chief U.S. economist at Oxford Economics. “We suspect the decline last week may have been exaggerated by quirky seasonal adjustment factors and think we might see a bounce-back in the weeks ahead.”
Stocks on Wall Street drifted lower on Wednesday, as technology stocks tumbled again amid a rise in interest rates.
The drop came even as the government said weekly claims for state unemployment benefits tumbled to their lowest even in decades. Initial claims for jobless benefits fell by 71,000 to 199,000 last week, the Labor Department said.
The drop marks a milestone in the economy’s recovery from the pandemic, which saw weekly claims peak at more than six million in April 2020 as the coronavirus forced businesses and consumers alike to shut down. It also comes at a time when many employers have reported that they have been having trouble filling openings even as pandemic restrictions have been lifted.
But the weekly data was also potentially overstated by seasonal factors and could rise in the weeks ahead, said Gregory Daco, the chief U.S. economist at Oxford Economics.
“Whether it’s the end of the school year or the start of the new year, there are a number of factors that influence how companies hire and fire,” he said.
The weekly unemployment data comes after a string of positive reports on the state of the economy, showing that hiring is robust and consumers are spending even as prices rise at the fastest pace in decades. Prices climbed by 5 percent in the 12 months through October, according to one measure of inflation released Wednesday.
The weekly unemployment data comes after a string of positive reports on the state of the economy, showing that hiring is robust and consumers are spending even as prices rise at the fastest pace in decades. Household spending in October rose 1.3 percent from September, the Commerce Department said Wednesday.
Stock investors, however, are reacting mostly to a rise in government bond yields this week. The yield on 10-year Treasury notes has climbed to 1.68 percent, a gain that partly reflects the positive economic news. But rising bond yields discourage investment in riskier assets like stocks, and technology stocks have been particularly hard hit.
Stocks have swung between gains and losses this week, and the S&P 500 is poised to end the week with a loss — dampening gains posted in recent weeks from robust corporate earnings reports.
Investors are also reacting to the latest earnings reports from retailers, who are contending with staffing shortages and supply chain snarls.
Gap plunged about 22 percent Wednesday after the retailer said the day before that supply chain constraints hampered the company’s sales in the three months ending October. Gap’s reported that quarterly sales were down 1 percent compared with the same period last year.
Nordstrom stock also fell, sliding 28 percent, after the company released a disappointing financial report for its latest quarter. The retailer reported a $64 million profit for the three months ending October, a 1 percent decrease compared with the same period in 2019.
Minutes from the Federal Reserve’s latest meeting are also set to be released later Wednesday. The Fed has said it would begin to slow its bond-buying program, winding down the $120 billion in monthly Treasury bond and mortgage-backed security purchases, but the minutes could show if there are any disagreements among Fed officials about the outlook for the program and the threat of inflation.
Read moreCredit…Ricky Rhodes for The New York Times
Ryan Mac and
Adam Mosseri, the head of Instagram, has agreed for the first time to testify before Congress, as bipartisan anger mounts over harms to young people from the app.
Mr. Mosseri is expected to appear before a Senate panel during the week of Dec. 6 as part of a series of hearings on protecting children online, said Senator Richard Blumenthal, who will lead the hearing.
Mr. Mosseri’s appearance follows hearings this year with Antigone Davis, the global head of safety for Meta, the parent company of Instagram and Facebook, and with Frances Haugen, a former employee turned whistle-blower. Ms. Haugen’s revelations about the social networking company, particularly those about Facebook and Instagram’s research into its effects on some teenagers and young girls, have spurred criticism, inquiries from politicians and investigations from regulators.
In September, Ms. Davis told Congress that the company disputed the premise that Instagram was harmful for teenagers and noted that the leaked research did not have causal data. But after Ms. Haugen’s testimony last month, Mr. Blumenthal, a Connecticut Democrat, wrote a letter to Mark Zuckerberg, the chief executive of Meta, suggesting that his company had “provided false or inaccurate testimony to me regarding attempts to internally conceal its research.”
Mr. Blumenthal asked that Mr. Zuckerberg or Mr. Mosseri testify in front of the consumer protection subcommittee of the Senate’s Commerce Committee to set the record straight.
“He’s the top guy at Instagram, and the whole nation is asking about why Instagram and other tech platforms have created so much danger and damage by driving toxic content to children with these immensely powerful algorithms,” said Mr. Blumenthal, who chairs the subcommittee. “The hearing will be critically significant in guiding us to develop laws that can have an impact on making platforms safer.”
Dani Lever, a Meta spokeswoman, said in a statement: “We continue to work with the committee to find a date for Adam to testify on the important steps Instagram is taking.”
Mr. Blumenthal said he would question Mr. Mosseri about how Instagram’s algorithms can send children into dangerous rabbit holes. Since Mr. Blumenthal’s subcommittee began its series of hearings, lawmakers have heard from hundreds of parents and children who have shared personal anecdotes, including stories of how posts on fitness devolved into recommendations for content related to extreme dieting, eating disorders and self-harm.
Mr. Blumenthal said he would seek a commitment from Mr. Mosseri to make Instagram’s ranking and recommendation decisions transparent to the public and to experts who can study how the app amplifies harmful content. Mr. Blumenthal said that executives at Snap, TikTok and YouTube, who all testified in a previous hearing, have committed to algorithmic transparency.
While Mr. Zuckerberg has become accustomed to being hauled in front of U.S. lawmakers, this will be the first time Mr. Mosseri will testify to them under oath. A trusted lieutenant to Mr. Zuckerberg who was chosen to lead Instagram in 2018, Mr. Mosseri has become the photo-sharing app’s public face, hosting regular video announcements about new features and appearing on morning television shows.
In September, before Ms. Davis’s Senate hearing, Mr. Mosseri appeared on NBC’s Today Show to announce that Instagram would pause the development of a version of the app designed for children following public backlash and renewed lawmaker interest sparked by Ms. Haugen’s leaks. BuzzFeed News first reported in March that the company was working on a version of Instagram for children under 13.
Mr. Mosseri’s scheduled appearance is the latest fallout from Ms. Haugen’s leaked files, which were first reported by The Wall Street Journal. Those documents, called The Facebook Papers, have formed the basis for multiple complaints to the Securities and Exchange Commission that Meta misled investors about its efforts to protect users.
Last week, a bipartisan group of 11 state attorneys general announced that it had opened an investigation into whether Meta had failed to protect the mental well-being of young people on its platforms including Instagram.
Read moreCredit…Brittany Greeson for The New York Times
Madeleine Ngo and
A key measure of inflation showed consumer prices rising at the fastest pace in three decades, as energy prices and demand for goods and services soared, posing a challenge to both the White House and the Federal Reserve.
Prices climbed by 5 percent in the 12 months through October, according to Personal Consumption Expenditures price index data released Wednesday. That was the fastest pace of increase since 1990.
The gauge was lifted by a 30.2 percent annual increase in the price of energy and a 4.8 percent increase in the price of food. Prices rose 0.6 percent from September to October, as supply chain disruptions continued to clamp down on the availability of certain products and components.
The increases were in line with what analysts had expected, but the rise in the Federal Reserve’s preferred inflation gauge will only add pressure on the central bank to take quicker action to maintain stable prices.
Price increases have shown few signs of fading, as some officials in the Biden administration and at the Fed argued they would earlier this year. The central bank is facing growing calls to hasten plans to end their stimulative bond-buying program and to begin to raise interest rates, a process that could risk slowing job gains and economic growth.
While inflation has soured consumer sentiment and weighed on Mr. Biden’s approval ratings, those price increases have been spurred in part by a strong economic recovery. Separate data released by the Labor Department on Wednesday found that initial jobless claims dropped to their lowest point since 1969, falling by 71,000 to 199,000 last week.
Mr. Biden hailed the drop in unemployment claims on Wednesday but conceded that the country was still far from a full recovery and that it had to address rising inflation.
“We have more work to do before our economy is back to normal, including addressing prices increases that hurt Americans’ pocketbooks and undermine gains in wages and disposable income,” Mr. Biden said in a statement on Wednesday.
In an attempt to drive down gas prices, the United States and five other world powers announced a coordinated effort on Tuesday to tap into their national oil stockpiles. Mr. Biden has ordered the Energy Department to release 50 million barrels of crude in the Strategic Petroleum Reserve, lower than what traders had expected from the emergency stockpile, which is the biggest in the world with 620 million barrels.
Consumers have grown increasingly concerned about the spike in prices. A survey from the University of Michigan released on Wednesday found that consumers expressed less optimism in November than at any other time in the past decade about prospects for their finances and the overall growth of the economy. The decline in consumer sentiment was a result of the rapid increase in inflation and the lack of federal policies that would address the damage to household budgets, according to the report.
Read moreCredit…Andrew Caballero-Reynolds/Agence France-Presse — Getty Images
In a coordinated effort with five other world powers, the United States on Wednesday tapped its Strategic Petroleum Reserve, a 620-million-barrel stockpile meant to be used in times of crisis. Dipping into this reserve for economic reasons has become more common, but a globally coordinated reserve release is rare.
The move was meant to reduce oil prices, which had drifted lower in anticipation of a reserve release, but oil prices rose on the news, gaining 2 percent, and have held most of that gain in trading on Wednesday. The steady rise in crude prices has pushed the price of gasoline higher — the U.S. average is $3.40 a gallon, up from $2.11 a year ago — presenting a political problem for President Biden.
Here’s why the effort to stop the rise in energy prices may not have the intended effect:
The reserve release was less than anticipated: Analysts expected 100 million barrels, but just over 65 million barrels are predicted to be released, with China and other countries contributing lower volumes than expected.
Much of the oil will have to be returned: More than half of the U.S. contribution is a loan, and that may restrict supply in the next year or so, when the United States buys those barrels back.
OPEC Plus could retaliate: The oil cartel and its allies have favored a slow increase in supply during the pandemic, and they may respond to the reserve release by restricting their production. “There are good odds that OPEC Plus will offset this, and they have a bigger fire hose than we do,” said Robert McNally of Rapidan Energy Group.
Where are oil prices headed next? Many economists think it will be hard to keep prices down for long. “Using strategic stocks to defend an oil price level set in a global market is pure folly,” Mr. McNally said.
Helima Croft of RBC Capital Markets told clients in a note that the Biden administration wanted to keep oil prices below $80 a barrel, so more releases could be coming. The president has also tried to tame prices in other ways, like asking trustbusters at the F.T.C. to investigate the conduct by large oil companies in the gasoline market.
Read moreCredit…Brian Snyder/Reuters
JPMorgan Chase’s chief executive, Jamie Dimon, expressed remorse on Wednesday for saying the bank would outlast China’s Communist Party.
“I regret and should not have made that comment,” Mr. Dimon said in a statement. “I was trying to emphasize the strength and longevity of our company.”
At a Boston College event on Tuesday, Mr. Dimon relayed a recent joke he had made comparing the longevity of the multibillion-dollar bank and China’s ruling party. “I made a joke the other day that the Communist Party is celebrating its 100th year,” he said at the event. “So is JPMorgan. I’d make a bet that we last longer.”
He added: “I can’t say that in China. They are probably listening anyway.”
On Wednesday, Mr. Dimon provided an additional comment through a statement from his spokesman.
“I regret my recent comment because it’s never right to joke about or denigrate any group of people, whether it’s a country, its leadership, or any part of a society and culture,” Mr. Dimon said. “Speaking in that way can take away from constructive and thoughtful dialogue in society, which is needed now more than ever.”
The spokesman for the bank said that Mr. Dimon, who was in Hong Kong last week, “acknowledges he should not speak lightly or disrespectfully about another country or its leadership.”
Chinese companies that trade their shares in the United States are an important source of revenue for banks. And Chinese authorities are loosening rules to allow U.S. banks to expand their businesses in China.
In August, JPMorgan got permission from the Chinese government to take full ownership of its investment banking and trading business in the country — a century after it first opened up shop there.
But banks have to consider the fraught relationship between the United States and China, the world’s largest economies. China was America’s largest trading partner for goods last year and the third-largest market for exported U.S. goods.
China has cracked down on tech companies including the ride-hailing giant Didi, the internet powerhouse Tencent and the e-commerce giant Alibaba. Recently, questions have been raised about its response to the star tennis player Peng Shuai’s accusations of sexual assault by a powerful former vice premier.
[Read more: Wall Street is finally getting access to China. But for how long?]
In JPMorgan Chase’s recent annual letter in May, Mr. Dimon made note of the country’s rising influence in the global economy. “China’s leaders believe that America is in decline,” he wrote. “Unfortunately, recently, there is a lot of truth to this.”
Lananh Nguyen contributed to this report.
Read moreCredit…Ted Shaffrey/Associated Press
Many retail giants have opted to close on Thanksgiving Day during the coronavirus pandemic, citing safety concerns and gratitude for their employees.
Retailers also have expanded their online offerings, as well as their pickup and delivery services, to meet customer demand amid lockdowns and pandemic restrictions.
For the second year in a row, Walmart and Target will close on Thanksgiving, repeating the move as retailers across the country scramble to hire or retain employees, with millions fewer Americans working than before the pandemic and more people quitting their jobs than ever before.
Here are some retailers’ plans for Thursday and Friday hours:
Walmart will spread out its Black Friday discounts to three events throughout November.
Target stores will close for Thanksgiving every year from now on. Most will reopen at 7 a.m. local time on Friday.
On Friday, hours may vary by store, and Nordstrom encouraged customers to search for holiday hours in its store locator online.
Most Costco stores will reopen as early as 9 a.m. on Friday.
On Friday, store hours vary, with some stores opening earlier than usual. Customers can view their local store’s hours on Apple’s website.
Friday hours may vary from normal operation, with some stores opening as early as 5 a.m. Customers can view their local store’s hours with Best Buy’s store locator.
T.J. Maxx, Marshalls, HomeGoods, Sierra and HomeSense stores will be closed on Thanksgiving. Most stores are scheduled to reopen at 7 a.m. on Friday.
Stores will reopen at 5 a.m. on Friday and close at midnight.
Stores will operate regular business hours on Friday and throughout the weekend.
On Friday, stores will open earlier than usual. Most are set to open at 6 a.m.; Home Depot recommends using its store locator to verify hours.
Stores will reopen at 6 a.m. on Friday and stay open till midnight.
Pandora will close its stores on Thanksgiving Day for the second year in a row.
Most locations will close by 5 p.m. On Friday, most will open an hour later than usual.
Hours may vary by location, with some closing as early as 5 p.m.
Most stores will have adjusted hours from 9 a.m. to 6 p.m.; 24-hour locations and 24-hour pharmacies will remain open.
Most locations, including 24-hour locations, will have regular hours on Thanksgiving and Friday. The company recommends calling ahead or visiting cvs.com to confirm local hours, as some locations will reduce hours or close for the holiday.
Stores will open an hour earlier than usual, at 7 a.m., and close an hour later, at 10 p.m. Regular hours resume on Friday.
Read moreCredit…Eli Durst for The New York Times
Samsung will build a $17 billion semiconductor factory in Taylor, Texas, it said on Tuesday, giving a big boost to a bipartisan effort in Washington to persuade chip makers to build more of the components in the United States.
The company’s decision came after months of deliberation over possible locations in the United States and South Korea. The company, one of the world’s largest makers of computer chips, considered a site in Austin, which is about forty minutes from Taylor, as well as locations in Arizona and New York.
As Washington has urged chip makers to build more in the United States, cities have raced to get a piece of the potential boom. Taylor went to great lengths to lure the Samsung plant. The city, its independent school district and the surrounding county promised the company hundreds of millions of dollars in tax breaks. Semiconductor plants require abundant water and reliable power, so they reached a deal to transport water from the adjacent county for the facility.
Samsung’s decision comes during a major shortage of semiconductors, which are critical to products as diverse as Ford F-150s, medical devices and iPhones.
Lawmakers and the Biden administration have grown concerned that not enough of the vital components are made in America. China has invested heavily in incentivizing production of computer chips inside its borders, and Taiwan and South Korea both produce a major share of the semiconductors. Policymakers worry that leaves the United States at an economic and national security disadvantage.
The plant in Taylor will be the latest to be built in America in recent years. Intel broke ground this year on two new factories on an existing campus in Arizona. Taiwan Semiconductor Manufacturing Company is also building a new plant in the state.
Read moreCredit…Jim Wilson/The New York Times
Taking the stand in her own defense for a third day, Elizabeth Holmes delivered her most substantial arguments to rebut the 11 counts of fraud that prosecutors have charged her with. She made eye contact with jurors and tilted her head to the side while making the case that she could not have intentionally deceived anyone about Theranos’s technology.
Ms. Holmes, 37, alternated between giving authoritative descriptions of Theranos’s scientific research and presenting herself as a naïve and ambitious founder who believed her company’s technology worked. She tried to reframe past incidents as misunderstandings about her intentions. She implied that her board should have given her better counsel. She suggested that she had been too trusting of the doctors, scientists and engineers who worked at Theranos.
And she painted herself as an entrepreneur who cared deeply — maybe too much — about protecting her company’s brand and financial future, to the point that she made decisions that were later skewered by the prosecution as fraudulent. READ THE ARTICLE →
Apple sued the NSO Group, the Israeli surveillance company, in federal court on Tuesday, another setback for the beleaguered firm and the unregulated spyware industry.
The lawsuit is the second of its kind — Facebook sued NSO in 2019 for targeting its WhatsApp users — and another consequential move by a private company to curb invasive spyware by governments and the companies that provide their spy tools.
Apple, for the first time, seeks to hold NSO accountable for what it says was the surveillance and targeting of Apple users. Apple also wants to permanently prevent NSO from using any Apple software, services or devices, a move that could render the company’s Pegasus spyware product worthless, given that its core business is to give government clients full access to a target’s iPhone or Android smartphone. READ THE ARTICLE →
Credit…Stefani Reynolds for The New York Times
The Commerce Department on Wednesday announced new restrictions on exports of American technology to 27 foreign entities and individuals in China, Japan, Pakistan and Singapore, saying that they were engaged in activities contrary to the interests of the United States.
Gina M. Raimondo, the secretary of commerce, said the actions would help prevent the diversion of American technology to the military advancement of China and Russia, as well as the proliferation of nuclear weapons and ballistic missiles in Pakistan.
“Global trade and commerce should support peace, prosperity and good-paying jobs, not national security risks,” she said.
The Commerce Department said it was adding eight organizations based in China to its “entity list” to prevent American technology from being used for quantum computing efforts that support military applications. The companies and institutes include Hangzhou Zhongke Microelectronics Company, Hunan Goke Microelectronics, New H3C Semiconductor Technologies Company, Xi’an Aerospace Huaxun Technology and QuantumCTek Company.
Sixteen entities and individuals in China and Pakistan were added to the list for contributing to Pakistan’s “unsafeguarded nuclear activities or ballistic missile program,” the agency said, including Poly Asia Pacific, Peaktek Company, Broad Engineering and Al-Qertas.
Organizations and individuals on the entity list are restricted from purchasing certain sensitive American products, unless an exporter obtains a special license to sell them the goods.
The Commerce Department also added three affiliates of Corad Technology, a Chinese entity that was added to the list in 2019, and placed the Moscow Institute of Physics and Technology on a separate list of “military end users” that also face restricted exports.
Read moreVideoCreditCredit…By Irene Suosalo
Today in the On Tech newsletter, Shira Ovide talks to a Biden administration official about what can be done to make government tech less awful.