The extent of the challenges facing the American economy will become clearer Thursday morning when the government reports the latest data for new claims for unemployment benefits.
Despite the rollout of coronavirus vaccines and a second federal relief package signed into law in December, applications for unemployment insurance have been extraordinarily high by historical standards.
Few economists expect a significant reduction in layoffs when the data is released Thursday, buttressing what they see as a strong case for further stimulus efforts.
“The labor market is still struggling,” said Gregory Daco, chief U.S. economist at Oxford Economics. “It’s quite feeble.”
President Biden and congressional Democrats are pushing ahead with a $1.9 trillion aid package that includes $1,400 in direct payments to many Americans as well as help for states and cities, which are major employers.
Last week, the government reported that the economy grew by only 1 percent in the fourth quarter of 2020, a subdued finish to a volatile year. Although stronger growth is expected for 2021, most forecasters say the economy won’t really move into recovery mode until mass inoculations cover the bulk of the population.
On Friday, the Labor Department will release figures for hiring and unemployment in January. Economists expect the report to show that employers added 100,000 jobs last month, though estimates vary widely.
“As we get more people vaccinated, the good news is that we will get a lot of these jobs back,” said Rubeela Farooqi, chief U.S. economist at High Frequency Economics. “But some jobs will be permanently lost.”
Kenneth Frazier, the chief executive of Merck who has led the pharmaceutical company for a decade, will step down from that position later this year, the company said Thursday.
Mr. Frazier will stay on after June as executive chairman during a transition period as Robert M. Davis, Merck’s chief financial officer since 2014, takes over as chief executive.
Mr. Frazier has been outspoken about racial justice issues, drawing headlines for standing up to President Donald Trump over the violent Charlottesville demonstrations in 2017.
He is one of just four Black chief executives of Fortune 500 companies, including Marvin Ellison at Lowe’s, René Jones at M&T Bank and Rosalind Brewer, who will take over at Walgreens next month.
The company said in a release announcing the transition that Mr. Frazier’s “belief in the importance of a strong, values-based culture, and his ability to attract and retain the best talent, will stand as an enduring testament to his concern and care for the people whose skill and commitment will be critical to Merck’s continued success.”
Janet Yellen, the Treasury Secretary, will meet on Thursday with officials from financial market regulators including the Securities and Exchange Commission to discuss the market volatility created by retail traders, the Treasury Department said, after the remarkable rise in prices of “meme stocks” such as GameStop.
The meeting, which will also include the heads of the Federal Reserve, the Federal Reserve Bank of New York and the Commodity Futures Trading Commission, is a sign of heightened scrutiny in Washington toward the frenzy in trading.
Shares in GameStop, a video game retailer, surged last week but have since fallen from their dizzying heights, testing the will of investors who joined in the fervor as a challenge to Wall Street investors. It shares soared 1,600 percent in January alone. Since Friday, the price of GameStop stock has plummeted to about $90 from $325.
The scrutiny in Washington comes as Gary Gensler, President Biden’s nominee to head the S.E.C., the principal overseer of capital markets, awaits Senate confirmation. Mr. Gensler served as head of the C.F.T.C. during the Obama administration and gained a reputation as a tough regulator.
Royal Dutch Shell, Europe’s largest oil company, joined other energy giants this week in reporting sharply lower earnings on Thursday as the pandemic weighed on oil and gas prices and consumption.
Shell said that its adjusted earnings, a metric followed by analysts, fell 87 percent in the 4th quarter compared with the same period a year earlier, to $393 million. By the same metric, Shell’s profit for all of 2020 fell by 71 percent to $4.8 billion.
When including enormous write-downs on oil and gas fields and other assets during the year, Shell reported a loss of $21.7 billion for 2020.
Despite the disappointing results, Shell said it would increase its dividend payout by 4 percent in the first quarter of 2021. It had already increased its dividend by a similar amount in the third quarter of 2020 after a two-thirds cut earlier in the year, the company’s first since World War II.
Shell says it is able to afford the dividend increases because it pulled in about $21 billion in cash over the year after expenditures.
Shell is one of the largest oil producers in the Gulf of Mexico, but Ben van Beurden, the chief executive, said he did not “see any economic impact” on the company from the Biden administration’s decision to pause the granting of new leases on federal property. Mr. van Beurden, on a call with reporters, said that Shell had some 300 lease positions in the Gulf, giving the company “enough running room for the rest of the decade.”.
He did suggest that the administration’s approach might be shortsighted because it could lead to the United States importing oil and gas produced with greater carbon emissions from elsewhere.
Wall Street futures signaled stock indexes would open slightly higher on Thursday, as investors awaited the latest data for new claims for U.S. jobless benefits. The S&P 500 index was set to rise 0.1 percent at the start of trading after it was little changed on Wednesday.
On Friday, the first major report on unemployment and hiring for 2021 will be released by the Labor Department. Despite the vaccine rollout, there are still signs that the labor market is struggling. This week, congressional Democrats and the Biden administration moved forward with their $1.9 trillion economic stimulus package.
Trading in “meme stocks” like GameStop and AMC Entertainment has calmed in the past few days. GameStop shares rose about 2.5 percent in premarket trading. The stock has dropped 72 percent so far this week. Later on Thursday, Treasury Secretary Janet Yellen will meet with financial market regulators to discuss the recent volatility caused by retail trading.
Elon Musk’s power to move markets was on display on Thursday. The billionaire entrepreneur posted several tweets about Dogecoin, a cryptocurrency started as a joke, and its price jumped about 50 percent.
Most European stock indexes were little changed. The Stoxx Europe 600 was flat with gains in health care stocks offset by losses in consumer and utilities companies.
Deutsche Bank posted its first annual profit in six years thanks to an increase in fixed-income trading revenue. But investors showed little interest in the beleaguered German bank’s stock, and its share price fell 1.8 percent on Thursday.
Royal Dutch Shell reported a nearly 90 percent drop in its profit in the fourth quarter, the latest in a string of big oil and gas companies that have been beaten down by the pandemic, which has sapped demand. It adds pressure to the industry’s transition to greener energy. Shell’s shares dropped 1 percent in London trading.
Oil prices rose. Brent crude, the European benchmark, gained 0.7 percent, reaching $58.84 a barrel, the highest in nearly a year.
Two of the nation’s largest airlines are warning thousands of workers that they could be out of a job on April 1, when federal aid to the industry expires.
In a letter to employees on Wednesday, the two top executives at American Airlines said that the carrier would notify 13,000 employees that they could be furloughed. Last week, United Airlines sent similar notices to 14,000 workers.
“Based on current demand outlook, we will not fly all of our aircraft this summer as planned,” American’s chief executive, Doug Parker, and president, Robert Isom, said. “Consequently, like last fall, we will have more team members than the schedule requires after federal payroll support expires April 1.”
Large employers are legally required to give employees advance notice of mass layoffs or furloughs, formally known as Worker Adjustment and Retraining Notifications. If economic conditions change or Congress and President Biden agree to provide more aid to airlines, the companies may let go fewer workers.
Airline labor unions are calling for a third round of federal aid for the industry. Congress provided passenger airlines $25 billion to pay employees as the coronavirus pandemic took hold last March and $15 billion in December. The unions are seeking another $15 billion to keep workers paid through September. The airlines support that effort but the unions are taking the lead in pushing for it in Washington. President Biden’s $1.9 trillion stimulus plan includes a call for $20 billion for public transit agencies, but includes no funding for airlines.
“Our nation’s leaders understand the vital role airline workers play in keeping the country moving,” Mr. Parker and Mr. Isom said. “They showed their support last year and we will encourage them to do the same again as the pandemic continues around the world.”
United and American are also asking employees to take buyouts, early retirement packages or voluntary leave in order to reduce the number of involuntary furloughs.
A regulator in Massachusetts wants to know if Keith Gill, an early endorser of GameStop also known as Roaring Kitty, broke any rules pertaining to his former day job when he promoted the video-game retailer on social media platforms.
Mr. Gill is a registered securities broker who worked for the insurer MassMutual as a financial wellness education director, and the company has told the state’s securities regulators that it was unaware that he had spent more than a year posting about GameStop on social media, online message boards and YouTube. The insurer also told regulators that had it known about Mr. Gill’s outside activities, it would have asked him to stop or possibly fired him, The New York Times’s Matt Goldstein reports.
Inspired in part by Mr. Gill’s cheerleading, thousands of small investors pushed stock in GameStop to as high as $483 a share and made Mr. Gill fabulously rich on paper. A picture he posted last week on the Reddit WallStreetBets forum showed his GameStop investment was worth $48 million, though his actual returns could not be independently verified.
Mr. Gill may also be summoned to testify before the House Financial Services Committee later this month, Representative Maxine Waters, the chairwoman of the committee, said on the Cheddar financial news channel on Wednesday.
Andy Jassy, the Amazon executive who will take over the company as chief executive when its founder, Jeff Bezos, steps aside later this year, spent more than two decades learning from Mr. Bezos.
In 2002, as a young executive, began following Mr. Bezos everywhere, including board meetings, and sat in on his phone calls, The New York Times’s Karen Weise and Daisuke Wakabayashi report.
The idea, said Ann Hiatt, who was Mr. Bezos’ executive assistant from 2002 to 2005, was for Mr. Jassy to be “a brain double” for Mr. Bezos so that he could challenge his boss’s thinking and anticipate his questions.
As Mr. Jassy followed Mr. Bezos, he also spearheaded Amazon’s move into a new field: cloud computing. That project became Amazon Web Services, now Amazon’s largest source of profit.