New jobless claims are expected to reflect continuing layoffs, even as reopening proceeds.
Another huge weekly batch of new unemployment claims is expected to be reported on Thursday by the Labor Department.
Economists surveyed by Bloomberg estimated that 1.6 million people filed initial claims for state unemployment insurance last week. That would continue the decline from the more than six million claims seen in a single week in March, but would still be an unusually high number.
More than 40 million state claims have been filed since the coronavirus pandemic caused a widespread shutdown of businesses, and 21.5 million jobless workers were collecting state benefits in the previous weekly report. Some of those ineligible for state benefits, like the self-employed, are getting aid under an emergency federal program.
“We’re slowly seeing the labor market recovery begin to take form,” said Robert Rosener, an economist at Morgan Stanley, but “there’s still an enormous amount of layoffs going on.”
The government reported last week that jobs rebounded last month and that the unemployment rate fell unexpectedly to 13.3 percent. Correcting for a classification error, the rate was closer to 16.4 percent.
Reopening efforts will quickly reinstate a third of the workers who lost their jobs, said Beth Ann Bovino, the chief U.S. economist at S&P Global, but a return to the labor market conditions that preceded the pandemic is unlikely before 2023.
“We’re expecting a long haul,” she said.
Global markets slump amid a spate of glum forecasts.
Major European markets opened more than 2 percent lower on Thursday, following a spate of negative forecasts about the global recovery and ahead of data likely to show more job losses in the United States.
Stocks in London, Paris and Frankfurt were all 2 percent lower. The drop followed a smaller drop on Wednesday on Wall Street but the negative momentum picked up as Thursday trading began. Markets in Japan and Australia fell by roughly 2 percent earlier in the day.
The skepticism rippled across other markets. Prices for U.S. Treasury bonds, long seen as a safe place to park money in times of trouble, rose. Prices for oil in the United States fell 4 percent in futures markets.
Futures that track U.S. stocks were predicting Wall Street would open nearly 2 percent lower.
Investors were preparing for another negative weekly jobless claims report in the United States later in the day. They were also reacting to the Federal Reserve’s forecast on Wednesday that the unemployment rate could stay high for the next several years. Earlier that day, the Organization for Economic Cooperation and Development warned in a new report that the world economy is facing the most severe recession in a century and could experience a halting recovery.
The forecasts highlight the possibility of a second wave of infections that could hit the world’s major economies as they emerge from efforts to stop their first outbreaks. The global outlook could remain unsteady until vaccines become widely available.
European food delivery service to buy Grubhub.
Just Eat Takeaway said on Wednesday that it had agreed to buy Grubhub for $7.3 billion, a deal that would give the European company a foothold in the United States.
Food delivery has become more popular during the coronavirus pandemic. But profits in the food delivery business have been elusive. Uber Eats, DoorDash and Grubhub have all spent millions of dollars on marketing and incentives to lure customers away from the others. Grubhub, which had been profitable, began losing money as it spent more to fight off rivals. And restaurants have complained about the fees and tactics of those companies.
In the all-stock deal, Just Eat Takeaway said it would value Grubhub at $75.15 per share, a 27 percent premium to Grubhub’s closing price of $59.05. Grubhub’s founder and chief executive, Matt Maloney, will join Just Eat Takeaway’s board and oversee its business in North America, the companies said.
Just Eat Takeaway was created this year through the $7.8 billion combination of two of the earliest participants in Europe’s food-delivery market, Just Eat and Takeaway.com. It has been fighting competition in Europe from Uber Eats and Deliveroo, a London-based company whose investors include Amazon.
Catch up: Here’s what else is happening.
Rose Marcario, the chief executive of Patagonia for 12 years, is stepping down effective June 12, the outdoors brand said on Wednesday evening. It did not give a reason for her departure. Patagonia’s sales have dropped 50 percent in North America because of the coronavirus pandemic. The company’s transition will be led by Doug Freeman, its chief operating officer.
Disneyland in Anaheim, Calif., will reopen on a limited basis on July 17, the theme park’s 65th anniversary, the Walt Disney Company said on Wednesday. California Adventure, an adjacent Disney property, will also reopen on that date, with people wanting to visit either theme park required to use a new reservation system. A phased reopening of Disney’s hotels in Anaheim will follow on July 23. The plans must still be approved by state and local health officials. Disneyland attracted roughly 19 million visitors last year, making it the world’s second-busiest theme park behind the Magic Kingdom at Walt Disney World in Florida, according to the Themed Entertainment Association. Disney World is scheduled to begin reopening on July 11. Disney parks in France, Japan and Hong Kong remain closed.
Los Angeles County issued guidelines for film and television to begin production as early as Friday, but it’s more likely that production will not resume until July at the earliest. Studios and production companies are still waiting for unions to determine job protocols, even though the industry issued its own white paper last week that established general guidelines for resuming production.
Reporting was contributed by Mohammed Hadi, Kate Conger, Adam Satariano, Michael J. de la Merced, Brooks Barnes, Tiffany Hsu, Carlos Tejada and Nicole Sperling.