Job trouble? Wave of rehiring after economy reopened to fade in July after viral spiral


The engine of the U.S. economy may have gotten clogged again — no thanks to the recent acceleration in coronavirus cases. That’s bad news for Americans hoping to return to their old jobs.

Just how much damage has been done will become more evident this week, especially from the U.S. employment report for July due next Friday. The number of jobs regained last month is unlikely to match the huge increases in May and June that totaled a combined 7.5 million.

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economists predict the U.S. added about 1.5 million jobs in July.

Even that estimate may be inflated though by seasonal changes in educational employment at the state and local level, Morgan Stanley contends. Private-sector jobs could increase by less than one million, the investment bank calculated.

See: MarketWatch Economic Calendar

Whatever the case, a much smaller increase in hiring or rehiring in July would bode ill for the U.S. recovery from the coronavirus pandemic. The government last week reported that gross domestic product sank a whopping 32.9% in the second quarter on an annualized basis, the biggest decline since World War Two.

Read: Economy suffers titanic 32.9% plunge in 2nd quarter, points to drawn-out recovery

Also:‘A massive welfare economy’ – federal aid prevents even steeper GDP collapse

“The big question hovering over next week’s employment report is whether the two-month surge in job gains stopped in July,” says David Donabedian, chief investment officer of CIBC Private Wealth Management. He thinks that’s exactly what happened.

It will be hard for the economy to make up a lot of lost ground in the third quarter unless hiring snaps back even faster.

See:MarketWatch Coronavirus Recovery Tracker

The U.S. lost a record 22 million jobs in March and April, according to Labor Department data. So far the economy has recovered less than one-third of those jobs.

The weekly tally of jobless claims, meanwhile, showed an even higher 30 million unemployed people were collecting benefits as of mid-July, representing about one in five Americans who said they were working before the pandemic, according to a Labor Department survey of households.

Robert Frick, corporate economist at Navy Federal Credit Union, said many people who expect to return to work are going to find they have no jobs or businesses to which they can return, a “grim reminder” of how much long-term damage the pandemic has caused.

“In the long run we are going to see a sobering slowdown in job growth,” he said.

The still-high level of unemployment, the viral spiral, and the uncertainty over whether Washington will provide more financial aid has understandably made Americans feel less confidence. On Friday Congressional lawmakers were still at odds on the next relief package with many benefits set to expire at the end of July.

A variety of measures that monitor consumer attitudes show a clear deterioration in July that’s likely to bleed over into August. That will make a recovery even harder.

Read:Consumer confidence wanes in July and points to rockier economic recovery

And:Consumer sentiment falls as coronavirus cases rise and federal aid set to expire

The news might not all be negative next week, however.

Manufacturers — auto makers in particular — have shown more resilience than the service side of the economy. The closely followed ISM manufacturing survey could show improvement for the third straight month.

The housing industry has also snapped back faster than expected amid a surge in home sales. Prospective buyers with secure jobs are taking advantage of record-low interest rates to buy new homes, a trend that may have been fueled by people fleeing the closed spaces of cities with a high number of coronavirus cases.

Even that potential bit of good news, however, has been overshadowed by the broader damage to the economy from the latest spike in coronavirus cases in many American states.

A full recovery can’t take root and blossom, economists say, until the disease is brought under control.

See: Pandemic will continue for some time, experts tell Congress as U.S. case tally nears 4.5 million



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No stopgap to preserve $600 jobless benefit add-on, White House’s Meadows says


White House chief of staff Mark Meadows leaves a Republican policy luncheon on Capitol Hill on Tuesday.


AFP via Getty Images

A senior White House official said Wednesday that a temporary extension of the extra $600 beneficiaries of unemployment insurance now receive weekly is not in the cards, as Republicans continued to work on a new COVID-19 aid bill.

“We’re really looking at trying to make sure that we have a comprehensive bill that that deals with the issues. Any short-term extensions would defy the history of Congress, which would indicate that it would just be met with another short-term extension,” Mark Meadows, the White House chief of staff, told reporters after leaving a late-day meeting with Senate Republican appropriators at the U.S. Capitol.

The $600 add-on, paid weekly on top of a state’s regular unemployment benefits, has provided much-needed support for poorer workers without jobs and boosted consumption, according to some economists. Many congressional Republicans, though, have said it encourages idleness because the amount can outweigh the wages earned in the old job.

While this week is the last for which the jobless are eligible for the payment, next week will be the final time it is disbursed. But labor experts say the inability of state departments to reprogram their systems quickly means even a small lapse, if it is not renewed by Friday, will result in a two- to four-week gap for recipients.

Mindful of the coming cliff, some Republican senators said Wednesday there had been discussion of a short-term extension of the unemployment insurance add-on. An extension raised concerns on both sides of the aisle, though, as Rep. Steny Hoyer, the second-ranking Democrat in the House, on Tuesday said it would be the “least advisable” option.

Meadows and Treasury Secretary Steven Mnuchin were on the Hill on Wednesday to help Senate Republicans come up with a bill as a counteroffer to the House’s $3.4 trillion coronavirus aid bill passed in May. A significant step was achieved Wednesday when top Senate Republican appropriators said they’d reached agreement with the White House on the part of the bill dealing with congressional spending.

“We’ll have a package tomorrow,” said Sen. Richard Shelby, the chairman of the Senate Appropriations Committee.

Sen. Roy Blunt, a Missouri Republican, said he hoped to see other parts of the GOP coronavirus bill come together Thursday as well. “The goal is tomorrow to get all of those bills out there. So we’ll have one aappropriating bill. We’ll have several authorizing bills that explain in more detail how that appropriated money would be spent,” he said.

Blunt said agreement between Senate Republicans and the White House had been reached on money for elementary and secondary schools dealing with coronavirus. He said the total amount would be $70 billion, evenly split between money paid out to schools on a per capita basis and money paid to schools that reopen with in-person classes, which Blunt said would require more money to operate.



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White House’s Kudlow floats cutting U.S. corporate tax rate in half By Reuters


© Reuters. Larry Kudlow participates in coronavirus economic “relief update” virtual event at the White House in Washington

WASHINGTON (Reuters) – White House economic adviser Larry Kudlow on Friday floated the idea of cutting the corporate tax rate in half for U.S. companies who bring their operations back from other countries.

“Why not provide a 50% discount for the corporate tax rate if you’re moving from outside the U.S. to the U.S.?” Kudlow told reporters at the White House, emphasizing that this was a thought, not a policy.

“So, the rate is 21%. Why not try for a couple of years or longer, a 10.5% rate, which would make us extremely competitive and hospitable to new investments here?”

With the coronavirus pandemic sapping retail sales, the labor market and industrial production, President Donald Trump’s administration and lawmakers are eager to find ways to shore up the U.S. economy.

Republicans are rejecting Democrats’ attempt to send more money to states and first responders, as well as additional cash payments to individuals and families, through a $3 trillion spending bill. Trump has said he would veto the legislation should it reach his desk.

Kudlow told Fox Business network in an interview that “we’re not going to spend our way out of” a coronavirus-related downturn, contradicting Federal Reserve Chairman Jerome Powell’s push this week for the government to spend more during the pandemic.

Trump’s administration, currently talking informally with Democrats, wants to look at incentives such as a payroll tax cut instead, Kudlow said. Alongside slashing the corporate tax rate, the government could look into the possibility of suspending capital gains taxes on assets bought between now and the end of the year, he added.

The administration will probably begin negotiating further coronavirus relief in a few weeks, Kudlow said.

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NYC’s rich are paying limo drivers to deliver their mail to their Hamptons beach houses


Talk about first-class mail.

A Manhattan limousine company has found a way to drive up some revenue now that the COVID-19 pandemic has pumped the brakes on car service around New York City: Have its drivers chauffeur their elite clientele’s mail and packages from their posh city penthouses to their Hamptons beach houses, where they’ve fled to self-isolate in style.

“I had to be innovative,” Mark Vigliante, the president of M&V Limousine Limited, told Vice. “There wasn’t a choice. This was it. I had to work. Plus, you can only have so much family time, you know?”

Vigliante, who also owns Hampton Luxury Liner, an upscale bus service that would normally be ferrying people between Manhattan and Long Island, said that for “hundreds of dollars,” his drivers will pick up customers’ mail from their Upper East Side and Upper West Side apartments, and bring them to their homes out on the shore.

“It’s a limo service for your things.”

He told Vice that this pop-up pandemic Tony Express now makes up 30% of Hampton Luxury Liner’s business, which has allowed him to keep up to 15% of his drivers employed — even as millions of Americans have lost their jobs, particularly in the travel, hospitality and service industry, as social-distancing guidelines have closed bars, restaurants, gyms and retailers for the foreseeable future.

“It’s a lot of mail and a lot of packages. It’s a lot of groceries, too, and luggage,” Vigliante said. “Some of it’s more odd. One dude had us transport a bicycle.”

Now he’s got his limousines and Cadillacs offering same-day delivery on anything that can fit in the trunk. His drivers wear gloves, he says, and the cars are also sanitized.

“To be honest with you, if it keeps going well, we’ll probably keep doing it after things get better,” he added.

Perhaps the rich don’t realize that the United States Postal Service already offers this service — and for just $1.05?

A quick Google search for “how to forward your mail” takes you to the USPS site, where with just a few clicks, and forking over a buck and change, you can redirect your mail and your packages to a permanent or temporary new address. You can use this “regular” forwarding service for as short as 15 days, or as long as one year. It can take a seven to 10 business days to process your mail-forwarding request, however, so there could be a couple of weeks where your mail will continue going to the old address, and it would indeed be useful to have someone pick it up for you.

Or you can lay out some extra money for the “premium” USPS forwarding service; the post office will hold your mail for a week at a time, package it, and then ship the bundle to you each week via its Priority Mail service. There’s a $21.90 enrollment fee in person ($20.10 if you enroll online), and then you pay $21.90 for each week of service; it’s still a bargain compared to the “hundreds” spent to get it delivered by limo. You can use this service for a minimum of two weeks up to a maximum of one year.

And if you move while you’re still expecting some online orders to come in, you can sometimes change the address on your Amazon

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Walmart

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 and Target

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 deliveries if they haven’t been fully processed or shipped yet.

The USPS also shared a coronavirus update last week, noting it has a dedicated COVID-19 Command Response team that’s focused on keeping the mail service running, and while keeping postal workers safe. It also assured the public that there is currently no evidence from the World Health Organization or CDC that COVID-19 is being spread through the mail.



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Bill Gates on Trump call for quick end to lockdown: It’s tough to tell people ‘keep going to restaurants, go buy new houses, ignore that pile of bodies over in the corner’


‘There really is no middle ground, and it’s very tough to say to people, “Hey, keep going to restaurants, go buy new houses, [and] ignore that pile of bodies over in the corner. We want you to keep spending because there’s maybe a politician who thinks GDP growth is all that counts.” ’


Bill Gates

That’s billionaire Bill Gates, the co-founder of Microsoft

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and noted philanthropist, sharing in a TED interview as described by the Vox Media site Recode his view on the drumbeat, notably from President Donald Trump, for an earlier end to public health policies aiming to mitigate the spread of a deadly pandemic that has brought much of the world’s business activity to a screeching halt.

Most of the U.S., including New York, New Jersey, Illinois and California, are under rules that limit movement and travel. Those efforts to dull the impact of the outbreak of COVID-19 are putting the U.S. economy into a recession and have tanked U.S. equity markets that were just a month ago at record highs.

See: Governors reject Trump’s timeline to reopen economy; ‘Job one has to be save lives,’ Cuomo says

The illness that is carried by the novel strain of coronavirus first identified in China in December has been contracted by some 622 ,000 people and killed more than 28,000 across the globe, according to data compiled by Johns Hopkins University, as of Saturday late morning.

In the U.S., where the epidemic is likely still in its nascence, more than 105,000 have been infected and 1,710 killed.

Trump, however, said on Tuesday during a Fox News interview in the White House Rose Garden that he hopes to have the country reopened as early as Easter on April 12, though most countries have taken months to achieve some semblance of managing the infection.

Trump has argued that a longer U.S. shutdown would make it more difficult for the economy to rebound from a recession. “The longer it takes, the longer we stay out, the longer that is to do,” he explained.

Read: Do you need to change and wash your clothes after visiting the grocery store?

An early end to the lockdown in the U.S. has been viewed as ill-advised by many experts and politicians who fear that lives would be sacrificed in the bid to resume business-as-usual, and achieve a stock-market rebound, before the virus subsides.

New York Gov. Andrew Cuomo, whose updates on the virus’s impact on the Empire State have been closely followed, expressed views similar to those of Gates on Tuesday. “No American is going to say, accelerate the economy at the cost of human life, because no American is going to say how much a life is worth. Job [No. 1] has to be save lives,” the governor said.

See: ‘You pick the 26,000 people who are going to die’: New York’s Cuomo, in plea to Trump administration for ventilators

Gates told TED, according to Recode, that “it’s very irresponsible for somebody to suggest that we can have the best of both worlds,” referring to mitigating the impact of the deadly pathogen on human lives and keeping the economy whirring.

U.S., and global, stock markets have been in turmoil due to the viral outbreak, with some at least partly attributing Tuesday’s biggest percentage gain since 1933 by the Dow Jones Industrial Average

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, up 11.4%, to a belief that Trump’s administration may push forward with reopening the U.S. economy, despite public health experts indicating that such a move would likely be premature. Noted infectious-diseases specialist Anthony Fauci suggested at a late-afternoon news conference at the White House that it might be worth exploring an idea floated by Trump that some sections of the country could have restrictions eased ahead of others.

The Dow surged 2,112 points on Tuesday, while the S&P 500 index

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soared 9.4%, and the technology-heavy Nasdaq Composite Index

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finished Tuesday’s session up 8.1%. All three indexes finished out the week lower but booked strong weekly gains, as President Trump signed a $2.2 trillion coronavirus rescue package into law.

Gates, who boasts a net worth of $94.6 billion, according to Forbes (making him the second wealthiest man in the world behind Amazon.com’s

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Jeff Bezos) is among a group of billionaire philanthropists who have said they would give away at least half their wealth to charities under terms of the Giving Pledge. The Bill and Melinda Gates Foundation has donated $100 million to pandemics science and testing.

Check out: Man who scored big wins during the 2008 financial crisis says the stock market could be ‘near a bottom’ if U.S. gets a coronavirus recovery plan



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