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Retail Sales Jump and Jobless Claims Drop in New Signs of Recovery: Live Updates

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filed first-time claims for state unemployment benefits last week, the Labor Department said Thursday, a decrease of 153,000 from the previous week.

In addition, 132,000 filed for Pandemic Unemployment Assistance, a federal program that covers freelancers, part-timers and others who do not routinely qualify for state benefits. That was a decline of 20,000 from the previous week.

Neither figure is seasonally adjusted.

In another sign of the recovery underway, retail sales surged in March, the Commerce Department said on Thursday, as Americans spent their latest round of government stimulus checks and the continued roll out of coronavirus vaccines lured more people back into stores.

The 9.8 percent increase last month was a strong comeback from the nearly 3 percent drop in February.

With the pandemic’s end seemingly in sight, the economy is poised for a robust comeback. But weekly applications for unemployment claims have remained stubbornly high for months, frustrating the recovery even as businesses reopen and vaccination rates increase.

“The job market conditions for job seekers have really improved extremely quickly between January and now,” said Julia Pollak, a labor economist at the job site ZipRecruiter. “But there are still huge barriers to returning to work.”

Jobless claims for the next few months could remain much higher than they were before the pandemic as the labor market adjusts to a new normal.

Concerns about workplace safety persist, especially for workers who are not yet vaccinated. Many children are still attending schools remotely, complicating the full-time work prospects for their caregivers.

But there is hope on the horizon as those barriers begin to fall. President Biden moved up the deadline for states to make all adults eligible for vaccination to April 19, and every state has complied. Students who have been learning remotely will begin to return to the classroom in earnest.

“This was the deepest, swiftest recession ever, but it’s also turning into the fastest recovery,” Ms. Pollak said. “And I don’t think we should lose sight of that just because some of the measures are a little stubborn.”

A store in Lower Manhattan. Retail sales rebounded in March, highlighting the importance of stimulus payments to consumer spending.
Credit…Gabby Jones for The New York Times

Retail sales surged in March, the Commerce Department said on Thursday, as Americans spent their latest round of government stimulus checks and the continued roll out of coronavirus vaccines lured more people back into stores.

The 9.8 percent increase last month was a strong comeback from the nearly 3 percent drop in February, when previous stimulus money had dissipated and a series of winter storms made travel difficult across much of the United States.

The rebound in March sales shows how, a year after the nation’s economy locked down to prevent the spread of the virus, consumer spending remains highly dependent on government support. It also reflects that many areas of consumption frozen by the pandemic have bounced back. Sales of clothing and accessories rose 18 percent, while restaurants and bars saw a 13 percent increase.

President Biden’s $1.9 trillion American Rescue Plan, which was signed into law last month, provides direct payments of $1,400 to lower-income Americans. Many of these checks began arriving in households toward the end of last month, when economists saw signs that spending was ramping up again, such as increased hotel occupancy and travel through airports.

Economists at Morgan Stanley had predicted that core retail sales would jump 6.5 percent in March, driven by the stimulus checks that started arriving in people’s bank accounts around March 17. The investment bank said 30 percent of consumers tend to spend their checks within the first 10 days, suggesting that many other consumers have yet to spend their checks, which could strengthen April sales.

More broadly, American consumers are also feeling increasingly optimistic as more people become vaccinated and venture out more frequently. One measure of consumer confidence, tabulated by the Conference Board, said confidence increased about 20 points in March from February, fueled by increased income and stronger business and employment expectations.

The Thomson Reuters offices in Times Square. The company’s media organization will begin charging for access to its website.
Credit…Andrew Kelly/Reuters

Reuters will begin charging for access to its website as it tries to capture a slice of the digital subscription business.

The company, one of the largest news organizations in the world, announced the new paywall on Thursday, as well as a redesigned website aimed at a “professional” audience wanting business, financial and general news.

After registration and a free preview period, a subscription to Reuters.com will cost $34.99 a month, the same as Bloomberg’s digital subscription. The Wall Street Journal’s digital subscription costs $38.99 a month, while The New York Times costs $18.42 monthly.

Reuters.com attracts 41 million unique visitors a month. Months of audience research showed that those readers were divided in two separate groups: those wanting breaking news and professionals looking for context and analysis about how news affected their industry, Josh London, chief marketing officer at Reuters, said in an interview.

Reuters will roll out new sections on its website for subscribers in coming weeks that include coverage of legal news, sustainable business, energy, health care and the auto industry. It also plans to introduce industry-specific newsletters.

Mr. London described the new website as “the largest digital transformation at Reuters in a decade.” He declined to provide specifics on digital subscription goals but said that it represented “a major opportunity for us.”

Arlyn Gajilan, the digital news director at Reuters, said she expected to expand the digital team working on the revamped website.

On Monday, Reuters announced that Alessandra Galloni, a global managing editor, would become its next editor in chief. Ms. Galloni, who will be the first woman to helm the news agency in its history, starts her new role on Monday. She takes over from Stephen J. Adler, who retired after running Reuters for a decade.

Ms. Gajilan said that Ms. Galloni had been closely involved in the new direction of Reuters.com.

“She’s a very strong advocate for all things digital at Reuters,” Ms. Gajilan said.

Coinbase’s market debut was displayed on the Nasdaq tower in Times Square on Wednesday.
Credit…Gabby Jones for The New York Times

U.S. stocks are set to rise when trading begins on Thursday as more companies report first-quarter earnings and retail sales data is expected to show a big increase in spending in March.

The S&P 500 was expected to open 0.5 percent higher, futures indicated.

After a bumper market debut, Coinbase shares rose 11 percent in premarket trading. On Wednesday, the cryptocurrency exchange ended its first day of trading at $328.28 a share, valuing the company at nearly $86 billion — more than 10 times its last valuation as a private company.

Shares in Bank of America rose 2.5 percent in premarket trading after the company reported better-than-expected revenue from sales and trading. The bank joins its peers in reporting a jump in earnings. On Wednesday, executives at Goldman Sachs, JPMorgan Chase and Wells Fargo all delivered upbeat economic forecasts.

Retail sales rose 5.8 percent in March, according to economists surveyed by Bloomberg, rebounding from a 3 percent drop the previous month.

  • Yields on 10-year U.S. Treasury notes dropped to 1.61 percent. On Wednesday, Jerome H. Powell, the chair of the Federal Reserve, reiterated the central bank’s intention of keeping monetary policy accommodative for a long time. He said the bank would probably slow its bond-buying program “well before” it lifts its policy interest rate.

  • European stock indexes also rose. The Stoxx Europe 600 index increased for a third straight day. It was up 0.3 percent to a record high.

  • The Russian ruble dropped 1.2 percent against the dollar on Thursday. The Biden administration is expected to announce a string of measures against Russia, including financial sanctions for the hacking of government and private networks and a range of other activity.

Dan Rozycki, president of the Transtec Group in Texas, is looking at alternatives for his semiconductor supplies.
Credit…Ilana Panich-Linsman for The New York Times

Shortages of semiconductors, fueled by pandemic interruptions and production issues at multibillion-dollar chip factories, have sent shock waves through the economy. Questions about chips are reverberating among both businesses and policymakers trying to navigate the world’s dependence on the small components.

Most attention has focused on temporary closings of big U.S. car plants. But the chips are in everything from cash registers and kitchen appliances, and the problem is affecting many other sectors, particularly the server systems and PCs used to deliver and consume internet services that became crucial during the pandemic, Don Clark reports for The New York Times.

“Every aspect of human existence is going online, and every aspect of that is running on semiconductors,” said Pat Gelsinger, the new chief executive of the chip maker Intel who attended the meeting with the president on Monday. “People are begging us for more.”

The chip shortage potentially affects just about any company adding communications or computing features to products. Many examples were described in 90 comments filed by companies and trade groups to a supply chain review by President Biden, including a laundry list of needs from industry giants like Amazon and Boeing.

Dan Rozycki is the president of a small engineering firm, that sells small sensors used to monitor construction sites to ensure concrete is hardening properly. His firm is for now among the lucky chip users. It planned ahead and has enough chips to keep making the roughly 50,000 sensors it supplies each year to construction sites. But his distributor has warned him it might not be able to deliver more of them until late 2022, he said.

“Is that going to halt those projects?” Mr. Rozycki asked. He is scouring the market for other distributors that might have the two needed chips in stock. Other possibilities include redesigning the sensors to use different chips.

Instagram is developing a service for children as a way to keep those under 13 off its main platform.
Credit…Jenny Kane/Associated Press

An international coalition of 35 children’s and consumer groups called on Instagram on Thursday to scrap its plans to develop a version of the popular photo-sharing app for users under age 13.

Instagram’s push for a separate children’s app comes after years of complaints from legislators and parents that the platform has been slow to identify underage users and protect them from sexual predators and bullying.

But in a letter to Mark Zuckerberg, the chief executive of Facebook — the company that owns the photo-sharing service — the nonprofit groups warned that a children’s version of Instagram would not mitigate such problems. While 10- to 12-year-olds with Instagram accounts would be unlikely to switch to a “babyish version” of the app, the groups said, it could hook even younger users on endless routines of photo-scrolling and body-image shame.

“While collecting valuable family data and cultivating a new generation of Instagram users may be good for Facebook’s bottom line,” the groups, led by the Campaign for a Commercial-Free Childhood in Boston, said in the letter to Mr. Zuckerberg, “it will likely increase the use of Instagram by young children who are particularly vulnerable to the platform’s manipulative and exploitative features.”

The coalition of nonprofit groups also includes the Africa Digital Rights’ Hub in Ghana; the Australian Council on Children and the Media; the Center for Digital Democracy in Washington; Common Sense Media in San Francisco; the Consumer Federation of America; and the 5Rights Foundation in Britain.

Stephanie Otway, a Facebook spokeswoman, said that Instagram was in the early stages of developing a service for children as part of an effort to keep those under 13 off its main platform. Although Instagram requires users to be at least 13, many younger children have lied about their age to set up accounts.

Ms. Otway said that company would not show ads in any Instagram product developed for children younger than 13, and that it planned to consult with experts on children’s health and safety on the project. Instagram is also working on new age-verification methods to catch younger users trying to lie about their age, she said.

“The reality is that kids are online,” Ms. Otway said. “They want to connect with their family and friends, have fun and learn, and we want to help them do that in a way that is safe and age-appropriate.”

  • A former editor at Vanity Fair has been working to create a new digital publication, in which writers will share in subscription revenue — Vanity Fair meets Substack. The new company behind the publication, Heat Media, hopes to unveil it in the coming months, four people with knowledge of the matter said. The start-up is partly the brainchild of Jon Kelly, a former editor at Vanity Fair. One of the backers is the private equity firm TPG, which would take three seats on the Heat Media board, the people said. Another investor is 40 North, a related investment arm of Standard Industries, a global industrials company, the people said. Heat Media has raised around $7 million so far, according to the people.

  • Kimberly Godwin, a veteran CBS News executive, was named the next president of ABC News on Wednesday, making her the first Black woman to lead a major broadcast network’s news division. Ms. Godwin succeeds James Goldston, who announced his departure from ABC in January. She will begin in her job in early May. Ms. Godwin most recently served as CBS’s executive vice president of news.

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Amid a chip shortage, the White House gathers business leaders to discuss supplies.

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The White House convened a meeting of business executives on Monday to discuss semiconductor supply chains amid a global chip shortage, with President Biden using the moment to pitch his $2.3 trillion infrastructure plan, which aims in part to bolster high-tech domestic manufacturing.

“China and the rest of the world is not waiting, and there’s no reason why Americans should wait,” Mr. Biden said.

At one point, he held up a silicon wafer and declared, “This is infrastructure.”

Participants in the meeting, described by the White House as a “virtual C.E.O. summit on semiconductor and supply chain resilience,” included executives from AT&T, Ford Motor, General Motors, Google, Intel, Samsung and Taiwan Semiconductor Manufacturing Company. The meeting was closed to the news media, aside from a brief portion when Mr. Biden gave remarks.

The global semiconductor shortage has disrupted auto production in the United States and elsewhere, underscoring both a short-term and long-term challenge for the Biden administration with economic and national security implications.

signed an executive order directing his administration to conduct a 100-day review of supply chains for semiconductors and several other types of critical goods.

His infrastructure plan also seeks to strengthen supply chains for chips and other important products.

It includes $50 billion for semiconductor research and manufacturing, and another $50 billion to create an office at the Commerce Department focused on the country’s industrial capacity and support for the production of critical products. It also includes $50 billion for the National Science Foundation, where Mr. Biden would create a technology directorate focused on areas like semiconductors.

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The Agency at the Center of America’s Tech Fight With China

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“When you start cutting off capital profits that can flow into R&D, many of them coming from the huge Chinese market, you really undermine our ability to stay at the tip of the spear in terms of semiconductor innovation,” Mr. Neuffer said.

“The sense of urgency in recent years inclined our leadership to make decisions without reference to what industry thought,” said Daniel H. Rosen, a founding partner of Rhodium Group. “We’re not going to serve the American interests if we don’t consider commercial interests and national security interests at the same time.”

The Biden administration has already run into the political minefield surrounding the bureau. In her confirmation hearing in January, Gina Raimondo, the new secretary of commerce, attracted criticism from Republicans when she declined to commit to keeping Huawei on the bureau’s entity list. Ms. Raimondo later said that she would use the entity list “to its full effect,” and that Huawei and ZTE should be on the list.

With Ms. Raimondo sworn in to her post this month, the Biden administration is considering candidates to lead the Bureau of Industry and Security. It has become a contentious process, a kind of proxy battle among trade advisers, industry groups and lawmakers of both parties for the future of the United States’ tech strategy.

One early contender, Kevin Wolf, a partner in the international trade group at the law firm Akin Gump, has run into resistance from some China hawks in Washington over his industry ties. Mr. Wolf, who was previously assistant secretary at the bureau, issued the sanctions against ZTE. He has consistently argued that restrictions that are unclear and unpredictable can backfire, “harming the very interests they were designed to protect.”

But critics have found fault with his work on behalf of industry since leaving the government, including counseling clients on what is permitted under Mr. Trump’s regulations, and trying to obtain licenses for his clients to supply products to Huawei and S.M.I.C.

Mr. Wolf said that he had merely helped companies understand the new rules, as other export control lawyers do, and that it was the Trump administration that was responsible for creating a new process to grant companies licenses to supply products to listed entities.

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The U.S.-China Talks: A Meeting of Friends and Foes

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The Biden administration has not exactly been rolling out the red carpet for this meeting. Yesterday it announced subpoenas against top Chinese companies suspected of threatening national security, and last week Blinken told the House Foreign Affairs Committee that he believed the Chinese government was committing “genocide” against Uyghur Muslims in Xinjiang. What does this tell us about how the administration plans to approach diplomacy toward China?

It tells you that the Biden administration is, so far, sounding a lot tougher on China than many expected. That should be no surprise. While the Republican talking point during the campaign was that Biden would give away the store to the Chinese, the history of Biden and his top foreign policy aides, Blinken and Sullivan, suggests a very different approach. They are focused on the technological competition with China, the threat of continuing cyberattacks (and China is believed to be behind one of the biggest in recent weeks, aimed at Microsoft systems), and new forms of military competition.

As Sullivan pointed out in an essay published last year, it’s possible that China is looking to follow the American model from 130 years ago, building up its navy and expanding its reach, to push us farther and farther east in the Pacific. But it is equally possible that its strategy is to deploy its 5G networks around the world, make nations dependent on its aid, its infrastructure projects and its vaccines, and spread influence that way. Or it may try both. In any case, we now have a full-scope competitor — an economic and technological competitor and a military adversary.

The subpoenas that Biden’s Commerce Department served to the Chinese companies were sent out under a Trump administration policy, which allows the executive branch to intervene on sales of foreign-made communications equipment if national security is seen as at risk. Would you say U.S.-China relations represent a rare area in which Biden is not seeking a hard break from his predecessor’s policies?

Certainly the Biden team has not walked away from the instruments of power exercised by Trump; I think it realizes that Trump accurately identified the importance of addressing the China challenge. The Biden camp just believes he confronted it the wrong way. Trump thought he could ban Chinese technologies, and impose sanctions on the country until it came to the bargaining table.

But China is too big to sanction effectively. And at the end of the day, the U.S. has to innovate and produce competitive products. To the Biden team, that means we need our own answer to 5G networks, because right now there is no American-made alternative. It means we need to make advances in semiconductors and artificial intelligence, even if that requires some innovative, government-backed industrial policy.

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Jobless Claims Climb as Pandemic Continues to Wreak Economic Havoc: Live Updates

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Policymakers at the Federal Reserve said on Wednesday that they expected the unemployment rate to fall to 4.5 percent by the end of the year, a significant improvement from the 5 percent they forecast three months ago.

Ford, which has its main campus in Dearborn, Mich., will transition to a model in which some employees work from home part of the time.
Credit…Rebecca Cook/Reuters

Many of Ford Motor’s employees to continue to work remotely at least some of the time after the pandemic is over.

The company said on Wednesday that it would transition to a “flexible hybrid work model” that will allow workers to stay home for focused work and come into the office for collaboration-based activities, such as team-building exercises.

In the United States, Ford currently has more than 30,000 employees working remotely because of the pandemic. The new system will go into effect in July, when the company, which has its main campus in Dearborn, Mich., expects to gradually start bringing more employees back to the office, it said.

“Every non-place-dependent employee, from our leadership team on down, will participate in the hybrid approach,” Kiersten Robinson, the company’s chief people officer, wrote in a handbook distributed to employees. “While we recognize this will take different skill sets and resources, we see it as a great accelerator and competitive advantage for the company. It will enable us to be agile and nimble, and to unleash the full potential of our team.”

Ford is the latest company to announce that remote work will continue even after the pandemic ends.

In February, San Francisco-based Salesforce said it would not require the majority of its global work force to return to the office after the pandemic is over, adopting a “Work From Anywhere” plan that would give its employees flexibility in how, when and where they work. Target also has said it would transition to a partial-remote model and would shed some of its office space.

The Commerce Department said on Wednesday that it had served subpoenas to multiple Chinese companies asking them to provide the government with more information on their use and transfers of American data, to ensure that sensitive information was not being shared with China.

The department did not clarify which Chinese companies were affected.

“In issuing subpoenas today, we are taking an important step in collecting information that will allow us to make a determination for possible action that best protects the security of American companies, American workers and U.S. national security,” Gina Raimondo, the commerce secretary, said in a statement.

“The administration is firmly committed to taking a whole-of-government approach to ensure that untrusted companies cannot misappropriate and misuse data and ensuring that U.S. technology does not support China’s or other actors’ malign activities,” she said.

The subpoenas are part of a review of company activities connected to an executive order issued by the Trump administration on the information and communications technology and services industry.

The order would give the Commerce Department sweeping powers to police transactions by companies in the industry that are owned by foreign nations and pose a risk to American national security. The measure, which was first issued in May 2019, has been criticized for its vague wording and for leaving so much discretion to the commerce secretary.

Wages at plants that have successfully avoided unionization have tended to be substantially higher than the typical wage in their areas. At Amazon’s Bessemer, Ala., facility, workers make nearly $3 less than the median income in the area.
Credit…Bob Miller for The New York Times

The most recent figure for the median wage in the greater Birmingham, Ala., was nearly $3 above Amazon’s pay at its warehouse in Bessemer, despite Amazon promoting that most rank-and-file workers there make around $15.50 an hour.

It is common for employers facing a union vote to emphasize the generosity of their wages and to suggest that workers could be worse off if they unionize, Noam Scheiber reports for The New York Times.

The catch is that wages at plants that have successfully avoided unionization have tended to be substantially higher than the typical wage in their areas, reinforcing workers’ sense that they had something valuable to lose.

  • Veteran production workers made $23.50 an hour at a Volkswagen plant in Chattanooga, Tenn., in 2019 when unionization was considered there.

  • The comparable figure was $23 at Boeing’s South Carolina facility when workers voted on a union.

  • At Nissan’s Mississippi plant during the vote there, also in 2017, the number was $26.

The union lost in all three cases.

By contrast, unions have been successful when companies have held down wages. During the first half the 2010s, workers unionized at several auto parts suppliers in Alabama and elsewhere in the South, often citing low pay and benefits as the impetus.

In 2015, employees at Commercial Vehicle Group in Piedmont, Ala., which made seats for trucks, voted to join the United Automobile Workers union by a roughly two-to-one ratio. Workers at the plant complained of wages that started as low as $9.70 an hour for temporary workers and topped out at $15.80 for full-time employees.

“Workers always say this: It’s about respect, recognition,” said Gary Casteel, the U.A.W.’s former second-ranking official, who helped oversee much of its organizing in the South. “That’s not the case. It is about the money. Everybody wants to get paid more.”

  • The Internal Revenue Service will give Americans until May 17 to file their taxes, the agency said Wednesday. The I.R.S. emphasized that the extra time is only for federal returns, not state returns, so taxpayers should check with their state tax agencies about any deadline changes. It also does not apply to estimated tax payments that are due on April 15, which are still due on that day.

  • The Federal Reserve’s latest projections showed that the central bank’s policymakers don’t anticipate an increase in interest rates at least until 2023. The Fed is also buying $120 billion in bonds per month — $80 billion in Treasury securities, plus $40 billion in mortgage-backed debt. Jerome Powell, the Fed chair, indicated on Wednesday that the Fed was not ready to even start talking about when it might reduce that support. “We’ll be carefully looking ahead,” he said. “When we see that we’re on track” then “we’ll say so, and we’ll say so well in advance of any decision to actually taper.”

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In Between Stimulus Payments, Retail Sales Decline

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President Biden signed into law a nearly $1.9 trillion relief plan last week, and direct payments of $1,400 per person are already making their way to the bank accounts of low- and middle-income Americans.

The law, known as the American Rescue Plan, also extends $300 weekly federal jobless benefits through Sept. 6 and provides billions of dollars to distribute coronavirus vaccines and relief for schools, states, tribal governments and small businesses struggling during the pandemic.

“Some of that money is bound to flow into retail — it just has to,” Mr. Chadha said.

The major changes in consumer habits during the pandemic have been on display in recent weeks as retailers have reported their holiday and full-year earnings results. (Most retailers end their fiscal year at the close of January to fully capture holiday spending.)

For example, Walmart reported fourth-quarter revenue that hit a record of $151 billion, up 7.3 percent from a year earlier, while Target also reported an increase in the same period, including a surge in digital sales. Consumers have gravitated to the chains in the past year, both in person and online, and increasingly used services like curbside pickup.

But the story was different at Macy’s and Gap, one of the country’s biggest operators of mall stores, which posted sales declines in the fourth quarter and grim annual revenue drops as many consumers stayed away from malls and had fewer reasons to buy new clothes in an isolated environment. Gap, which also owns Old Navy and Banana Republic, pointed to stay-at-home restrictions and store closures as reasons for its tumbles.

Still, Gap had a positive outlook for the back half of this year. “As vaccines roll out and stimulus checks begin, we currently view the second half of 2021 favorably, reflecting a likely return to a more normalized prepandemic level,” Katrina O’Connell, Gap’s chief financial officer, said on an earnings call this month.

Jeff Gennette, Macy’s chief executive, said in an interview this month that the company was looking for “clues on what’s going on with wedding dates, what’s going on with restaurant reservations, what are the signs that communities are starting to open up.” That would help the company determine how consumers were planning “wearing occasions” this year, he said.

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