U.S. unemployment is expected to be around 20 percent in Friday’s jobs report.
The U.S. government’s employment survey for May will be released at 8:30 a.m. Eastern time. The job losses are expected to be far less than those in April — but that is small consolation.
Economists surveyed by FactSet expect the report to show that employers cut 8.5 million jobs in May, down from more than 20 million in April, and that the unemployment rate hit 19.8 percent, the highest level since the Great Depression.
Many economists expect that May will be the nadir for the job market, and that unemployment will begin to ease as states reopen and businesses call employees back to work. But it will take far longer for the economy to climb out of the hole than it did to fall into it.
Perhaps the most troubling sign for the recovery is evidence that job losses have spread beyond travel, hospitality and other sectors that were directly affected by the pandemic.
“In some ways, those jobs that were working from home were protected from the initial bomb that went off,” said Andrew Challenger, senior vice president at Challenger Gray & Christmas, an outsourcing firm that tracks layoffs. “We’ve really seen over the last five to six weeks that those jobs are now on the chopping block.”
Global stocks rise as recovery hopes return.
Global stocks rose steadily on Friday, despite widespread expectations of glum employment data from the United States and a ho-hum performance from Wall Street the day before.
European stocks were higher by about 1 percent or more in early trading, while Asian shares shrugged off a sluggish performance earlier in the day and ended higher. Prices for U.S. Treasury bonds were lower, in another sign of improved market sentiment.
Futures markets were predicting that Wall Street would open about 1 percent higher.
The global stock performance reversed a weak Thursday on Wall Street, after the U.S. government said the overall number of workers on state jobless rolls had increased last week. More bad news is expected to come later on Friday, when U.S. government releases its employment survey for May.
But investors on Friday reacted to signs around the world that businesses were slowly but steadily returning to normal, as well as positive sentiment from renewed efforts by the European Central Bank to bolster the region’s economy.
Investors also looked positively on reports that the trade war truce between the United States and China was holding, despite worsening tensions between Washington and Beijing.
Gap rushes to reopen its stores as sales plummet.
Gap, one of the biggest U.S. retailers with its namesake, Old Navy and Banana Republic chains, said on Thursday that net sales in the first quarter plummeted 43 percent to $2.1 billion and that it posted a net loss of $932 million, as it struggled with store closures because of the pandemic.
The company, which has nearly 2,800 stores in North America, said that it had reopened more than 1,500 locations and expected the “vast majority” of stores to be open by the end of June. The retailer saw major drops across most of its brands, but net sales declined only 8 percent at Athleta as customers flocked to athleisure. Casualwear was popular across brands as shoppers worked from home, the company said. That trend, however, hurt Banana Republic.
Gap said on an earnings call on Thursday that its reopened stores are operating at nearly 70 percent of their performance last year, with particular strength at Old Navy, which is “advantaged” with off-mall locations. It was also upbeat about a new collection called Gap Teen, which was introduced during the quarter and emphasizes sustainability.
Simon Property Group, the biggest mall operator in the United States, is suing Gap, the owner of retail chains including Old Navy and Banana Republic, for about $66 million in unpaid rent for April, May and June, according to a lawsuit filed in Delaware this week.
Simon Property said that it notified Gap in writing that the retail conglomerate had failed to pay $48.2 million in rent and other charges as of May 5, but that the company still had not made the payments as of Tuesday. Gap, one of the biggest specialty store operators in the world, also owns Intermix, Athleta and outlet stores.
The retailer said on the call that it was in active negotiations with landlords.
Sonia Syngal, Gap’s chief executive since March, started the call by acknowledging the protests across the country and noted that the company has the chance ”to create a world that is more inclusive.” She noted that 20 of its stores sustained “extensive damage” as part of the protests.
A tweak to a stock award adds millions to a C.E.O.’s pay package.
Raytheon Technologies, one of the country’s biggest defense contractors, recently cut salaries for thousands of employees as the pandemic crimped business. Around the same time, it also quietly made a change to the pay package of its chief executive, Gregory J. Hayes, that could increase his future income by millions of dollars.
Last Friday, after the market closed, Raytheon disclosed in a filing that it had tweaked how it calculates certain stock-related payouts owed to senior executives and employees. The filing did not state by how much Mr. Hayes or others stood to benefit.
The change led to an estimated $12.5 million gain for Mr. Hayes on his recent equity awards, Raytheon later told The New York Times. The company said the change was necessary to ensure that Mr. Hayes and 3,900 employees — about 2 percent of its work force — did not lose compensation they had already been awarded.
But some analysts said the change undermined Raytheon’s commitment to use pay to keep executives’ interests in line with those of shareholders. Publicly traded companies have come under pressure to structure stock-related compensation in a way that creates incentives for executives to improve long-term performance and not just seek to enrich themselves in the short term.
Catch up: Here’s what else is happening.
Slack, the business communication platform, said in a regulatory filing that its first-quarter revenue rose 50 percent to $201.7 million from the same period last year. The chat service reported a loss of 2 cents per share in the quarter, which ended April 30, an improvement over a loss of 23 cents a share in first quarter of 2019. But the results disappointed investors, who expected greater growth during the pandemic, and its shares plunged 15 percent in after-hours trading.
Reporting was contributed by Mohammed Hadi, Sapna Maheshwari, Peter Eavis, Anupreeta Das and Gregory Schmidt.