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‘A portrait of devastation’
The April U.S. jobs report, released at 8:30 a.m. Eastern today, will be the first edition of the closely watched survey to fully reflect the effects of pandemic lockdowns. Unlike the weekly jobless claim figures that have recently made headlines, these monthly numbers are based on surveys of both households and businesses, making them more comprehensive.
Expect a “portrait of devastation,” Neil Irwin of The Times’s Upshot writes in his preview. In the worst month of the last recession, March 2009, the U.S. lost 800,000 jobs. Analysts’ estimate for April is 22 million. “It’s hard to even fathom what we’re going to learn, or what kinds of words can capture the human pain beneath the eye-popping numbers,” Neil writes.
• If the forecasters are right, a decade’s worth of job growth will be erased in a month. This chart drives home the swiftness of the decline:
What to watch for. The Times’s Ben Casselman has a primer for how to interpret the numbers.
• The report shows how hiring at companies like Amazon has offset losses elsewhere. It also collects data on working time, revealing the extent to which people who kept their jobs have had their hours cut.
• The monthly data breaks down employment by race, gender, age, industry and other factors, showing who is bearing the brunt of the downturn.
• The unemployment rate is expected to jump to 16 percent in April, from 4.4 percent in March. This probably understates the true rate, because people have to be actively looking for a job to be counted, and many aren’t (not least because of stay-at-home orders).
Is there anything to be hopeful about? Perhaps.
• The numbers distinguish between people who lost their jobs permanently and those on furlough who might return to work more quickly. A Morning Consult survey found that one-third of laid-off workers say their employer has kept in touch, and two-thirds of those think they will be rehired.
• The industry breakdown of job losses is important, because if declines are concentrated in sectors directly affected by the virus, like restaurants, the damage might be contained. If they’re also in remote-work-friendly businesses in finance and professional services, digging out of the hole might take a lot longer.
Today’s DealBook Briefing was written by Andrew Ross Sorkin in Connecticut and Michael J. de la Merced and Jason Karaian in London.
State reopenings may not revive the economy
States like Georgia, Oklahoma and South Carolina have begun lifting their lockdowns in a bid to get their economies up and running. Data shows that’s no guarantee that economic activity returns.
Economic stats in those states show only meager signs of life, Emily Badger and Alicia Parlapiano of The Times’s Upshot note. The share of small businesses operating in Georgia, and the hours worked in them, hasn’t changed much since the state eased restrictions on April 24.
• The Small Business Administration has reportedly capped loans from its Economic Injury Disaster Loan program to $150,000, down from $2 million, and blocked nearly all new applications.
The shaky sharing economy
The coronavirus pandemic was always going to be bad for businesses that rely on movement and travel, like Uber, Lyft and Airbnb. This week showed just how bad.
Ride-hailing all but collapsed in March. Lyft said that rides tumbled nearly 80 percent late in the month. Uber said rides were down 80 percent in April. Those numbers have improved only a bit in recent days. Both companies reported steep losses in the first quarter.
Airbnb laid off 25 percent of workers earlier this week and slashed its revenue forecast. “While we know Airbnb’s business will fully recover, the changes it will undergo are not temporary or short-lived,” Brian Chesky, the co-founder and C.E.O., wrote in an internal memo.
Analysts predict long-term gloom for the gig economy. “Based on our analysis of the gig economy and the overall pie of consumers, unfortunately, there’s a slice that — until there’s a vaccine — will not get in a ride-sharing vehicle or use an Airbnb,” the analyst Daniel Ives of Wedbush Securities told The Times.
• There are some bright spots. Uber said its Uber Eats food delivery service grew 89 percent year-on-year, excluding India. And it felt confident enough to lead a $170 million investment in Lime, the shared-scooter company.
Melinda Gates gives Trump a ‘D-minus’ on pandemic efforts
Bill and Melinda Gates have been careful not to say too much about the Trump administration’s response to the coronavirus. But Ms. Gates, the co-chair of their philanthropic foundation, took a direct shot at the president yesterday.
It’s a sharpening of the Gates family’s critiques, after Mr. Gates last month called Mr. Trump’s decision to suspend funding for the World Health Organization “dangerous.” (Mr. Gates has since joined other tech billionaires like Eric Schmidt to push governments to give more money to international groups like the W.H.O.) Until that point, the Gateses’ criticisms of the administration had been more oblique.
Bret Stephens on the politics of the pandemic
The Times Opinion columnist joined us yesterday for a wide-ranging DealBook Debrief call about the pandemic’s economic, geographic and political fault lines. Listen to the full recording here. Some highlights:
🇺🇸 “Trump expected to ride to re-election on the strength of a very robust economy.”
Despite what looks like a deep recession, Bret thinks that the president’s re-election chances are good, based on his “formidable” advantage in fund-raising and the power of incumbency.
That said, if the economy fails to recover quickly, a second Trump term would be radically different from the first. “History might remember that it was left to the Trump administration to fulfill Bernie Sanders’ agenda of completely socializing the economy,” Bret said. “If Trump gets a second term, we may be inevitably forced to move toward a Medicare-for-all system as a majority of the population — or a huge number of people — are left without health benefits.”
🇺🇸 “Here’s a governor who really knows what he’s doing.”
“As much as I can find fault with the decisions that Andrew Cuomo has made,” Bret said of New York’s governor, his performance during the pandemic has been praiseworthy. “He has seized the national stage in a way that few other governors have with a combination of almost fatherly authority and a sense of empathy. That is, at least in terms of presentation, if not in terms of policy, what leadership looks like.”
🇺🇸 “It’s not just simply life versus money.”
An ideological split on attitudes toward risk underlies disagreements about when and how to reopen the economy. “A lot of conservatives would say that I ought to be free to take risks with my health because other things matter to me as much as my health does,” Bret said. “Of course the liberal answer is you’re not just taking risks with your health, but also with other people’s health.”
“It’s unfortunate that people have begun speaking about this in terms of lives versus the economy, as if the word economy doesn’t contain within it real questions of public health and not just livelihood, but life itself,” he added.
The speed read
• Neiman Marcus became the first big U.S. department store to file for bankruptcy protection during the pandemic, letting creditors take control of the business. (NYT)
• Liberty Global and Telefonica struck a $39 billion deal during the pandemic with lots of videoconference calls and working around advisers contracting the coronavirus. (Bloomberg)
Politics and policy
• Trade negotiators for the U.S. and China pledged to meet the objectives of the phase-one trade deal. (WSJ)
• Paul Tudor Jones is stocking up on Bitcoin. (Bloomberg)
• As YouTube becomes overrun with misinformation and extreme content, Susan Wojcicki, the chief executive, is trying to clean it up. Listen to our interview with her on the “Rabbit Hole” podcast. (NYT)
Best of the rest
• The annual charity auction for lunch with Warren Buffett has been postponed. (Bloomberg)
• You know Zoom. But what about Xoom, Zoomd, Züm and Zume? Also, Erin, are you OK? (NYT)
Thanks for reading! We’ll see you next week.