Unemployment Claims Show Continued Pressure on Economy

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Starbucks announced Thursday that it would require all customers to wear facial coverings while visiting any of its 9,000 store locations across the United States. The rule will go into effect on July 15.

The order may supersede local ordinances in states and cities that do not require mask wearing in public. In those locations, customers who do not want to wear masks will still be allowed to use Starbucks drive-throughs or use curbside pickup and delivery services.

“The company is committed to playing a constructive role in supporting health and government officials as they work to mitigate the spread of Covid-19,” Starbucks said in a statement.

The move comes as Covid-19 cases surge throughout the United States. Starbucks has required all company employees to wear masks since April in an effort to contain the spread of the virus. — Gillian Friedman

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The personal computer market shook off the effects of supply chain disruption caused by the coronavirus pandemic, posting growth of 3 percent to 11 percent in the second quarter compared with the same period in 2019, the research companies Gartner and IDC said on Thursday.

Between 64 million and 72 million PCs were shipped worldwide as distributors and retailers restocked. Sales of mobile computers rose strongly because more people were working or learning remotely and needed devices to entertain themselves, the researchers said.

Factory closures in China, caused by the spread of the coronavirus, had led to a weak first quarter for the PC market. But the latest numbers told a story of recovery — at least temporarily. Researchers cautioned that the bump in sales might not last.

“This uptick in mobile PC demand will not continue beyond 2020, as shipments were mainly boosted by short-term business needs due to the impact of the COVID-19 pandemic,” said Mikako Kitagawa, a Gartner analyst. — Kellen Browning

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More than 117,000 people filed for unemployment benefits in Texas last week, a jump of more than 20,000 from a week earlier. It was the second straight weekly increase and the highest number of new filings since late May, although still below the peak in early April.

Economists are watching Texas closely because it is one of several states where a jump in coronavirus cases has led to a new round of business closings and other restrictions. A wide range of indicators recently have suggested that the economic rebound is losing momentum in states where virus cases are rising quickly.

Thursday’s unemployment data didn’t paint a clear picture, however. New filings fell in Oklahoma, Florida and other virus hot spots, and rose only slightly in Arizona. Claims rose in New Jersey and New York, states where the virus is comparatively under control. And economists caution against reading too much into week-to-week changes in state filings, which can be volatile. — Ben Casselman

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The Federal Reserve’s Main Street loan program for medium-size businesses was destined to be a challenge.

The central bank has never tried lending to midsize companies before and it is difficult to help a very diverse group of businesses without putting taxpayer money at risk. The Fed, the Treasury Department and members of Congress have also at times appeared to be on different pages about what they want the program to achieve.

The central bank and the Treasury, which is providing money to cover any loans that go bad, spent months devising the program, negotiating over credit risk and vetting terms. Many officials within the Fed wanted to create a program that businesses would actually use, but some at Treasury saw the program as more of an absolute backstop for firms that were out of options. Steven Mnuchin, the Treasury Secretary, has resisted taking on too much risk, saying at one point that he did not want to lose money on the programs as a base case.

What has emerged after three months, two overhauls and more than 2,000 comments filed with the Fed is a program that seems to be incapable of pleasing much of anyone.

Executives at La Colombe, a Philadelphia-based purveyor of fancy coffee and canned draft lattes, thought that the program would be their best shot at getting help. But when the central bank announced the details in early April, it was clear that La Colombe would not qualify. The company has too much debt relative to earnings to meet the Fed’s leverage restrictions.

“That just doesn’t make sense for companies like La Colombe, because we’re growing so quickly,” said Aren Platt, who leads special projects for the company. — Jeanna Smialek

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As rising coronavirus cases pushed some states to reverse course and reimpose shutdown orders on businesses, 1.3 million workers filed new claims for state unemployment benefits last week, the government reported on Thursday.

The number of new claims has been declining since early April, but the weekly total is still far above records from previous downturns.

Another one million new claims were filed last week under the federal Pandemic Unemployment Assistance program, which is designed to funnel jobless benefits to freelancers, self-employed and other workers normally ineligible for state unemployment insurance.

Hiring nationwide has picked up in recent weeks, and the overall jobless rate dipped in June to 11.1 percent from a peak of 14.7 percent in April. But most of the payroll gains were because of the rehiring of workers temporarily laid off. The pool of workers whose previous jobs have disappeared and who must search for new ones has grown.

“Their circumstances may be more challenging to rectify than those who were laid off because of a temporary closure,” said Elizabeth Akers, who was a staff economist with the Council of Economic Advisers under President George W. Bush. “Finding new jobs will be more difficult. There’s been scarring in the economy.” — Patricia Cohen

Credit…Tamir Kalifa for The New York Times

Emergency government assistance in the form of expanded jobless benefits and loans to small businesses has been critical in keeping the economy afloat, said Lisa D. Cook, a professor of economics and international relations at Michigan State University. But she worries what will happen when expanded jobless benefits expire at the end of this month and other assistance programs dry up.

“At the heart of this is job loss,” said Ms. Cook, who testified before a congressional committee this week. State and local governments are laying off health care and education workers, eviction bans are expiring even though a significant chunk of household renters and businesses are having trouble making payments.

“I just worry about this all piling up in the system,” she said, “and if we don’t have an eye on it right now, we can wind up with something worse than 2008.”

Airlines announced this week that they could lay off or furlough tens of thousands of employees in October despite billions of dollars in government aid because air travel has not rebounded. And even in cities where the coronavirus caseload has declined, consumers continue to significantly cut back on their shopping and dining out. — Patricia Cohen

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Sur La Table, the upscale cookware company, filed for Chapter 11 bankruptcy on Wednesday, dealing another blow to brick-and-mortar retail. The company has started liquidating 51 of its 121 U.S. stores, according to court filings, which it said were in shopping centers and traditional shopping malls or as stand-alone storefronts.

The privately held retailer, founded in 1972 at Seattle’s Pike Place market, said that it expected to sell up to 70 stores to Fortress Investment Group, which is working with STORY3 Capital Partners. Sur La Table said in court filings that the deal would preserve nearly 2,000 jobs and the company’s online business and cooking classes.

Sur La Table is at least the eighth specialty retailer or department store chain to file for bankruptcy since May, as the pandemic forced temporary closures of nonessential businesses. The company, which recently posting annual revenue of about $346 million, said its sales had been declining for five years that it had been betting on growth in cooking classes. It filed for bankruptcy protection on the same day as Brooks Brothers. — Sapna Maheshwari

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United Airlines and American Airlines said they would suspend flights to Hong Kong after the authorities there said that they would test all airline workers for the coronavirus starting on Wednesday.

Airline crew members were previously exempt from the mandatory deep-throat saliva tests that nearly everyone entering the Chinese territory must take. A cargo pilot tested positive for the virus last week.

United said in an emailed statement late Wednesday that flights to and from Hong Kong will be suspended “through July 10” because of “recent changes in testing protocol” at the city’s airport. Earlier this week, United said it planned to bring back services between Chicago and Hong Kong in September.

American Airlines, which has suspended flights to Hong Kong since the end of January, was set to restart services from Dallas to the city on Thursday. But the carrier has now pushed back the resumption of passenger services to early August. “We consider a range of factors including travel restrictions or entry requirements in making network decisions,” the airline said late Wednesday. — Elaine Yu

Stocks were volatile on Thursday, as investors turned their focus to the economic risks of the coronavirus pandemic.

After starting the day with a gain and then falling by as much as 1.5 percent, the S&P 500 was about half a percent lower by the end of the day. Oil prices fell about 3 percent after data showed stockpiles of crude in the United States continued to rise last week, and shares of energy producers were among the worst-performing stocks in the S&P 500.

Retailers were lower after Walgreens Boots Alliance said that it would cut about 4,000 positions at its Boots chain in Britain, and Bed Bath & Beyond said sales plunged by almost 50 percent in the latest quarter. Walgreens fell about 8 percent, and Bed Bath & Beyond tumbled more than 24 percent.

But technology stocks again fared better than the rest of the market, and the Nasdaq composite climbed to a record. The tech rally came after Germany’s SAP reported that revenue and operating profit slowly rose in the second quarter. SAP, a software maker, said software license revenue, a main source of income, “recovered more than expected.”

Technology companies have been leading the market rally, because they are seen as beneficiaries of changes brought on by the pandemic, with more people working from home and shopping online.

Investors have seemed to largely shrug off a rise in coronavirus cases in the United States; the S&P 500 is up roughly 6 percent since late May. But trading has become more volatile lately over worries about the virus and restrictions that are being reimposed as a result.

As of Thursday, only Vermont and New Hampshire saw their numbers of cases decrease. In 14 states and territories, the number of cases was mostly the same. In the rest of the country, new cases were on the rise, while officials in Florida reported 120 new deaths from the virus, topping the state’s previous single-day record of 83 new deaths, on April 28.

Also on Thursday, filings for state unemployment claims came in lower than expected. Labor Department data showed that 1.3 million people sought benefits last week, which is lower than the 1.37 million expected by economists. About 1.4 million people claimed benefits for the prior week (not last week, as was earlier reported here).

Although new claims have been declining since early April, the weekly total has not dropped below a million since the coronavirus pandemic started — levels that are far above previous records. — Mohammed Hadi

  • Boots, a large British drug store chain, said Thursday that it planned to lay off more than 4,000 people, about 7 percent of its work force, as it closed optician stores and reorganized its head office. Last quarter, sales for Boots UK dropped 27.7 percent. Also, John Lewis, a British retailer, said it would permanently close eight department stores, leaving 42 stores and putting 1,300 jobs at risk.

  • Bed Bath & Beyond said on Wednesday that it would permanently close 200 stores over the next two years, starting later this year, as it tries to weather the coronavirus pandemic. The retailer said sales plunged by almost 50 percent in the last quarter despite a surge in online sales.

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