The American economy gained 638,000 jobs last month, a sign the labor market continues to heal slowly as a resurgence in the coronavirus threatens future growth.
The unemployment rate fell sharply to 6.9 percent, from 7.9 percent in September, the Labor Department reported.
By Ella Koeze·Unemployment rates are seasonally adjusted.·Source: Bureau of Labor Statistics
The overall job gain would have been larger without the loss of 147,000 temporary census positions.
The nation has recovered about half of the 22 million jobs lost after the pandemic struck in March, but the gains have softened in recent months. The economy added almost 1.8 million jobs in July and 1.5 million in August, but the figure fell to 672,000 in September.
The latest gains are also jeopardized by a surge in virus cases that has led to renewed business shutdowns.
“It’s better than expected, but we’re starting to see headwinds,” Diane Swonk, chief economist at the accounting firm Grant Thornton in Chicago, said of the October report. “The drop in the unemployment rate is welcome news, but there are still over 11 million unemployed workers.”
Even as the unemployment rate has come down, joblessness for many has become more prolonged. The Labor Department said the number of long-term unemployed — those without work for 27 weeks or more — grew to 3.6 million in October, an increase of 1.2 million.
Millions of unemployed workers have had a harder time paying bills since an emergency federal program paying $600 a week in additional benefits expired at the end of July. Another set of federal jobless benefits will last only through the end of the year.
Job losses are more likely to be permanent than earlier in the pandemic
Share of jobs lost each month that are temporary layoffs
By Ella Koeze·Data is seasonally adjusted.·Source: Bureau of Labor Statistics
The Economic Policy Institute, a left-leaning research group, estimates that more than 30 million workers have lost jobs or had their hours or pay reduced in the coronavirus-related downturn.
With the Senate remaining in Republican hands, as election returns suggest, any further relief will probably be more modest than the multitrillion-dollar package that seemed likely if a “blue wave” had given Democrats control of Congress and the White House.
Arizona voters have approved a ballot measure that would tax the state’s highest earners to raise the pay for schoolteachers.
The measure, known as Proposition 208 or the Invest in Education Act, calls for a tax surcharge of 3.5 percent on income above $250,000 for single filers and on income above $500,000 for joint filers, in addition to the existing 4.5 percent income tax.
Prop. 208 passed with 52 percent of voters supporting the measure, The Associated Press reported late Thursday. Under Arizona’s rules for ballot measures, the tax increase needed a simple majority to pass.
“It’s a significant win, not just for Arizona, but I think it sent signals all across the country,” said Meg Wiehe, deputy executive director of the Institute on Taxation and Economic Policy, a nonpartisan think tank that works on state and federal tax policy issues.
The surcharge is estimated to generate $827 million per year, which will be allocated as follows:
50 percent toward hiring and salary increases for teachers and other certified employees, such as counselors and nurses.
25 percent to fund salaries of student support staff, such as classroom aides and bus drivers.
12 percent to support career and technical education programs.
10 percent to initiatives dedicated to retaining and mentoring teachers.
3 percent to fund scholarships for the Arizona Teachers Academy, which waives college tuition for students studying education who pledge to work for Arizona schools after graduation.
Opponents of the tax increase — including Gov. Doug Ducey and the Arizona Chamber of Commerce and Industry — said it would hurt Arizona’s economy by discouraging high-earning, top-tier talent from relocating to Arizona for job opportunities, and that it would penalize small businesses at a time when many are already struggling as a result of coronavirus restrictions.
“Small business is a driver of the economy in our state, and to have that kind of effect on small businesses is very concerning to us,” said Mike Huckins, vice president of public affairs for the Greater Phoenix Chamber of Commerce, which also opposed the measure.
Supporters say the measure will not hurt small businesses, as the initiative applies only to personal income, not business income, and will only affect the state’s highest earners.
The stock market’s rally took a breather on Friday as the final outcome of the presidential election was still being determined. Stock futures indicated the S&P 500 index would open slightly lower. European stocks fell for the first time this week.
But Wall Street is still on course for a bumper week. By the close on Thursday, the S&P 500 was up 7.4 percent for the week, on track for the biggest weekly gain since early April. It’s a huge turnaround from last week, when the index dropped more than 5 percent on concerns that the global economic recovery would stall as coronavirus cases kept rising and the prospects of near-term fiscal stimulus in the United States diminished.
On Friday morning, Joseph R. Biden Jr. took the lead on votes in Georgia, further narrowing the possibility for President Trump to be re-elected. Many market analysts are anticipating a divided government with Republicans keeping control of the Senate. But it could be months before an outcome in the Senate is known, because the likelihood of a runoff in Georgia’s two Senate seats grew.
But despite the uncertainty, investors seem to see upside in any of the likely outcomes. A Biden presidency with Democrats in control of the Senate would mean a surge in government spending to bolster the economy. A split government with Republicans in the Senate would mean many policies like tax increases on companies would have to be tempered, while Mr. Trump’s low-tax and low regulation stance has always been welcomed by Wall Street.
The Stoxx Europe 600 index fell 0.8 percent on Friday but was up 6.4 percent on the week. The DAX in Germany dropped 1 percent, the CAC in France fell 0.9 percent, and the FTSE 100 in Britain was 0.3 percent lower. In Japan, the Nikkei closed 0.9 percent higher, while indexes in Hong Kong and South Korea were little changed.
The decline in stocks futures was trimmed somewhat after the Labor Department reported that the American economy gained a larger than expected 638,000 jobs last month and the unemployment rate fell sharply. The gains are a sign the economy continues to slowly heal from the damage of the pandemic, though a surge in new cases is threatening that recovery.
On Thursday, the chair of the Federal Reserve said an increase in virus cases, with the U.S. hitting daily records for new cases, was concerning and more fiscal support would be needed to help the recovery.
Oil prices fell. West Texas Intermediate, the American benchmark for crude, dropped 3 percent to below $38 a barrel. An index of the dollar fell for the fourth consecutive day to its lowest level in about two months.
Four years of a Trump presidency, culminating in a hotly contested, divisive election, have been a boon to media companies and social networks. But as those businesses look ahead to a potential change in the political landscape, the DealBook newsletter explains, there are risks.
Politics has been a gold mine for broadcasters like Comcast, the parent of NBCUniversal, which said it had seen a 70 percent jump in political advertising in this election over 2016. Local TV operators have benefited, too, with Gray Television and Nexstar Media both reporting political ad revenue that vastly exceeded their expectations. Fox News, the most-watched news network, helped drive its parent company’s ad revenue up 18 percent in its latest fiscal quarter.
The New York Times Company reported a doubling of net profit in the third quarter, while revenue from digital subscribers exceeded that from print subscribers for the first time. Internet giants like Facebook and Google have also benefited from a surge in political ads.
But navigating the election has been fraught for media firms. When President Trump made numerous false claims about voting integrity on Thursday, ABC, CBS and NBC quickly cut away. Fox News stayed with his speech, but its news personnel have been skeptical of Mr. Trump’s fraud claims, and the network has already drawn the ire of Mr. Trump for calling Arizona for Joe Biden before anyone else.
Facebook took down a fast-growing user group that sought to delegitimize the election. And it is poised to take more action to slow the spread of disinformation on its platforms. Twitter has slapped warning labels on 38 percent of Mr. Trump’s tweets since Tuesday. YouTube is moving to strip ads from videos that promote misleading claims about the election, but won’t take them down.
What comes next? Traditional media companies face the potential end of the so-called Trump bump. In that case, Fox News would face the challenge of becoming an opposition outlet and confronting a possible new rival network tied to Mr. Trump. And social media giants would have to decide whether measures they imposed to limit the spread of disinformation around the election are worth keeping in place, given the trade-off of slower growth.
Sarah Figueroa’s company, Geojam, was focused on connecting fans at concerts and giving sponsors a look at what was working and what wasn’t. The pandemic broke that model, reports Paul Sullivan, a columnist for The New York Times.
In March, Ms. Figueroa pivoted, deciding to use her company’s technology to directly connect artists with their fans.
What Ms. Figueroa, her two co-founders and investors are able to do is not going to work for everyone. But their pivot may offer useful lessons to other entrepreneurs regardless of their wealth and experience.
Keep asking for money. Ms. Figueroa was raising the company’s initial round of investments when the pandemic struck. She ended up raising $350,000 in the worst of the lockdown and closed the funding round at $1.65 million.
“I think the investors analyzed the deck more” ahead of Zoom calls, she said. “There was a little less emotion in the meeting. We were in beta, so they were looking at what we had. It was also helpful that we only had $350,000 left in our round.”
Bring in an advisory board. Ms. Figueroa had an advisory board in place long before the pandemic hit. And she was able to lean on its members when the pandemic changed her business.
One was Marcie Allen, who has arranged sponsorships for live events like South by Southwest and Billy Joel’s extended residency at Madison Square Garden.
“I’ve worked for her for several years and knew that she would be able to pivot,” said Ms. Allen, who also teaches at New York University. “They’re in essence a tool provided to artists and their managers to create unique experiences. Now, they’re providing revenue streams for artists and a promotional opportunity.”
Days after LVMH agreed to go ahead with its acquisition of Tiffany & Co. at a slightly lower price, ending months of bitter public conflict, the global luxury industry has produced a new landmark deal that will unite some of its biggest names.
Richemont, the Swiss luxury watch and jewelry maker, and Artemis, the holding company of French luxury goods group Kering, are joining the Chinese e-commerce titan Alibaba to invest $1.15 billion in Farfetch, a luxury e-commerce platform based in East London but listed in New York.
The aim? To create a new Chinese marketplace that will capitalize on the country’s booming demand for luxury goods, which has recovered from a temporary drop in consumption brought on by the pandemic earlier this year. The partnership, announced Thursday night, could also herald further consolidation in the fragmented online luxury market at a time of dramatic upheaval in global retail.
Shares in Farfetch jumped more than 11 percent in premarket trading.
As part of the deal, Alibaba will introduce Farfetch luxury shopping channels on its Tmall Luxury Pavilion and Luxury Soho platforms. Alibaba and Richemont will each invest $300 million in Farfetch Limited, and a further $250 million each into the newly formed Farfetch China. They will have a combined 25 percent stake in the new joint venture.
Artemis will increase its existing ownership in Farfetch with a $50 million purchase of Farfetch shares. A steering group will also be formed among Farfetch, Alibaba, Richemont and Artemis to “explore new ways to incorporate digital into luxury retail,” a statement said.
At a time when Amazon continues to invest heavily in its luxury fashion operations, the deal confirms Farfetch as the leading player in the Western luxury market. Unlike rivals, Farfetch has seen flying sales this year, reporting $721 million in sales in the second quarter, a 48 percent increase from the same period last year. Founded in 2007 by José Neves, the company counts Alibaba’s rivals JD.com and Tencent among its investors. Until now, Farfetch’s biggest competitor was considered to be Yoox Net-a-Porter, which Richemont acquired in 2018.
“You are either a disrupter or a disrupted and I hate being the latter,” Richemont’s chairman, Johann Rupert, told reporters on a call on Friday, later stressing that Richemont was not interested in a merger or in taking over Farfetch.
“We’re dealing with a public company that we hope will remain independent,” Mr. Rupert said, adding that Mr. Neves would remain in charge at Farfetch.
The Chinese luxury market, which is expected to account for half of global luxury sales by 2025, has seen a strong recovery this year as shoppers emerging from Covid-19 lockdowns splurged online or in retail stores.
CVS on Friday reported a 3.5 percent jump in revenue in its third quarter, compared with the same period in 2019. The drugstore chain earned $1.22 billion, down from $1.53 billion during the same period last year. CVS also named a new chief executive, Karen Lynch, who is currently the executive vice president of CVS Health and president of Aetna, the health insurance company that CVS acquired in 2018. Ms. Lynch will replace Larry J. Merlo, who will retire on Feb. 1. CVS has responded to the pandemic by offering more than 4,000 drive-through coronavirus testing sites across the United States, as well as flu shots.
Visa’s planned $5.3 billion acquisition of the financial technology firm Plaid, which helps consumers connect their bank accounts to thousands of financial apps, would give the company an unfairly tight hold on the online debit transactions market, the Justice Department said in a lawsuit on Thursday. In the complaint, filed in federal court in San Francisco, the Justice Department said the deal would “eliminate a nascent competitive threat” to Visa, which it says controls more than 70 percent of the online debit market.
Uber’s core ride-hailing business continues to be battered by the coronavirus while its food delivery business surges, the company said in its quarterly earnings report on Thursday. Uber’s revenue in the third quarter was $3.1 billion, an 18 percent annual decline. The company lost $1.1 billion, an 8 percent improvement from the $1.2 billion Uber lost in the third quarter last year.
In a brutal recession, the job market can seem forbidding. But some workers are being hired, and Nicole Zappone of Naugatuck, Conn., is one of the lucky ones.
She started in August as a public relations assistant after being unemployed for six months, a harrowing personal experience.
“It was the worst part of my life,” said Ms. Zappone, 30, who took to reading novels by James Patterson and Michael Connelly to get through each day’s lonely hours. “I’ve been working since I was 14, and this was the first time I was laid off. And it was hard to comprehend.”
She had worked in a consignment shop and done babysitting and dog walking. Finding work had never been hard — until now.
Indeed, when she was let go as a substitute teacher in Waterbury, Conn., in March, she had no idea how severe the impact of the virus and the ensuing lockdown would be. By summer, she was applying for job after job on Indeed.com with no response.
“I felt like a failure, even though I knew it was beyond my control,” she said. “I can’t tell you how many jobs I applied for.”
When she got a nibble from a local information technology company for the public relations position, she couldn’t believe her luck. One week after a phone interview, she was hired for a 20-hour-a-week position that she hopes will become full-time. She is working from home and has been to the office only once — to sign her contract.
“I love it,” she said. “I get to use my passion for writing and talk to people from all over the country.”
The coronavirus pandemic hasn’t just put millions of people out of work. It has also made it harder for those who were already seeking jobs to find one.
Jodi Jackson, 57, worked as a buyer for J.C. Penney at the company’s headquarters in Plano, Texas, until she was laid off in April 2019. She has looked for a job as a buyer at other chains, with no success. And with retailers reeling from the pandemic, she has had to consider a move into another field.
“I could do sales, and I’ve tried to switch, but unless you know somebody, it’s hard to get an interview,” Ms. Jackson said.
“I was born to be a buyer,” she added. “I would buy screws and nails for Home Depot at this point.”
Ms. Jackson worked for the Census Bureau for three months, but that job ended last month. “I don’t live above my means,” she said. She sold her condominium in Ann Arbor, Mich., before moving to Plano in 2019, she said, and has mostly been living off the proceeds of that sale. (She collected unemployment benefits after her J.C. Penney layoff, and may do so again based on the loss of the census job.)
She took a temporary job as a cashier at Macy’s during the holiday rush last year. “It was only $9.45 an hour, which was a fraction of what I earned at J.C. Penney,” she said. “But I wanted to work and to be around people. And retail is something I know.”
Ms. Jackson has ruled out another holiday season at Macy’s because the pay is too low. And despite the industry’s worsening problems, she hasn’t given up hope. On Wednesday, a retailer based in Plano asked her to come in for a third interview next week.
“I feel really positive,” she added. “I’m going to get a job.”