This is what you need to know:.
Adjusted gross domestic product
on inflation and seasonality, with
Inflation-adjusted gross domestic product
and seasonality, at annual rates.
The last quarter was the fastest growing quarter in the U.S. economy compared to the previous quarter, when the stores reopened and customers returned to the stores. However, the economy has only partially left the pandemic hole and progress is slowing.
Gross domestic product increased by 7.4% in the third quarter, said the Ministry of Commerce Thursday. The annual growth rate of 33.1% is by far the highest since reliable statistics were collected after World War II; the previous record was a quarterly growth rate of 3.9% in 1950.
However, the economy remained 3.5% weaker in Q3 than at the end of 2019, before the pandemic started. By comparison: In the course of the year and half of the Great Recession of ten years ago, gross national product fell by 4%.
This report is the latest important economic data for Tuesday’s presidential elections. Even before this publication, President Trump had raised the prospect of a major victory as proof that the economy had gained momentum again after the outbreak of the spring pandemic.
Economists said, however, that third-quarter figures said less about the strength of the recovery than about the severity of the previous collapse. Gross domestic product fell by 1.3% in the first quarter and 9% in the second, as the pandemic led to a massive shutdown. A major recovery was inevitable as soon as the economy started to open up again. The challenge is what happens now.
The reason for this huge leap forward is that the economy has shifted from a closed economy to a partially open economy, said Michelle Mayer, American economic leader at the Bank of America. The slight growth has been exhausted and there is now a lot of work to be done to heal completely.
There are already signs that recovery is starting. Industrial production fell in September and employment growth slowed, although a growing list of large companies announced new rounds of mass redundancies and leaves. Most economists expect the slowdown in the visa rate and the decline in federal support to households and businesses to increase in the last three months of the year.
We have a record collection, but it comes after an even bigger crash and it looks like the economy will slow down in the fourth quarter, said Jim O’Sullivan, Chief Macro Strategist, TD Securities.
Dinner in September at the House of Liberty in Jersey City, New Jersey. Companies that survived the summer may have to close their doors in the winter. A loan… Brian Anselm for The New York Times.
The number of workers applying for unemployment benefits again fell slightly last week, indicating that the economic recovery remains fragile.
The Ministry of Labor announced on Thursday that 732,000 workers claimed unemployment benefits again last week, a drop of about 28,000 from the previous week.
New applications for pandemic-related unemployment assistance – a federal emergency programme for the self-employed, part-time workers and other workers not eligible for benefits under the regular working regime – were revised with 360,000 applications versus 345,000.
Seasonally adjusted, the number of requests from the new government was 751,000.
Within a few weeks, about 800,000 new applications for unemployment benefits were submitted by the government – much less than in March and April after the pandemic, but exceptionally high by historical standards.
This is a surprisingly high level of demand, said Mark Hamrik, senior economic analyst at Bankrate.com. There are large sections of our society and sectors that are suffering.
While the number of new claims is decreasing, the number of people receiving unemployment assistance, a federal program that provides 13 weeks of extra benefits after the end of the state unemployment insurance, is increasing, as millions of people who lost their jobs at the beginning of the pandemic are still unemployed more than six months later.
We’re going in the right direction, but not as fast as we should, says Annelisabeth Konkel, labour market economist at Indeed Hiring Lab. We need to get back on our feet faster so that people don’t become long-term unemployed.
Coronavirus cases in the Midwest could foresee a new wave of lawsuits against the unemployed in the coming weeks as the states blockade or people become less comfortable shopping in stores or eating out, Konkel said. And when autumn turns into winter, many companies that have managed to stay afloat may be forced to close their doors.
In warm weather, an open-air dinner saved the lives of many companies, according to Julia Pollack, labour economist at ZipRecruiter’s construction site. Soon this will no longer be possible in many states, so more redundancies are likely to occur.
Dignity GoHealth employees perform Abbott ID Now express tests for United Airlines passengers in San Francisco. United hopes that the extensive tests will allow the resumption of international travel… credit… Jeff Chiu/Associated Media
Starting in November, United Airlines will test passengers over the age of two years on selected flights from Newark Liberty International Airport to London Heathrow for one month. This test is intended to convince government officials that it can be an essential element in the resumption of international travel.
United will perform an Abbott ID Nu Covid-19 rapid molecular testing on registrants for the 11th Annual Meeting of the United Medical Association. November – 11. December, flight 14, departure Newark at 19:15 on Monday, Wednesday and Friday Anyone wishing to make these flights must undergo a negative coronavirus test to board the aircraft. Positive results will be isolated and you will be asked to contact a medical examiner and the airline will help you to book a flight at a later time. Those who do not want to take the test will be transferred to another flight.
We believe that the ability to quickly test Covid-19 on the same day will play a key role in the resumption of safe travel around the world and the enforcement of quarantine and travel restrictions, especially to key international destinations such as London, said Toby Enqvist, Director of United Nations Customer Service. According to the Port Authority of New York and New Jersey, the number of international flights arriving at the five regional airports of New York in September 2019 decreased by 82 percent compared to September 2019.
People taking a flight have to make an appointment to take the test and the airline advises them to plan their arrival at least three hours before departure. The test site in Newark will be located in the United Club, near the door of the C93.
The pilot programme is designed to help passengers regain a sense of comfort during their journey, but it will not replace practices such as wearing masks, social distance boarding and disembarking protocols that have become mandatory in recent months. Passengers still have to comply with the quarantine regulations on arrival in London.
The test comes in the wake of United and other airlines offering coronavirus testing to people traveling from the mainland to Hawaii, where those who test negative can miss the state’s 14-day quarantine. Experts from the tourism sector believe that the tests will help to avoid quarantine and facilitate international travel. The UN leaders hope that the tests will lead to further testing at the airports.
Singapore Airlines Airbus A380 at Singapore Changi Airport. Earlier this year, Airbus reduced aircraft production and cut jobs to cut costs… credit… Wallace Vaughn/EPA at Shutterstock…
The Airbus consolidated operating loss for the third quarter was €636 million or $745 million, but the European space giant has managed to stem the cash drain and should remain stable after adjusting its operations in response to the coronavirus crisis, the company said Thursday.
Airbus CEO Guillaume Faury, at a press conference the day after rival Boeing announced 7,000 additional cuts by the end of next year, expressed cautious optimism about the company’s future, based on the much larger cuts announced this spring. Boeing plans to employ approximately 130,000 people by the end of 2021, almost 19 percent less than at the beginning of this year.
After nine months in 2020, we see progress in adapting our operations to the new market conditions of Covid 19, says Fauri. Despite a slower than expected recovery in air traffic volume, we combined production and deliveries of commercial aircraft in the third quarter and stopped using cash in line with our ambitions.
Airbus began reducing aircraft production earlier this year and has cut 15,000 jobs by the summer of 2021 to reduce costs, as the pandemic-induced drop in air traffic has led to cost savings. This week, the World Tourism Organization reported that the number of international tourists fell by 70 percent in the first eight months of 2020 and that it is unlikely that it will take at least another year for the number of tourists to recover.
Three months before September, Airbus announced a positive cash flow of 600 million euros. The company’s ability to maintain this trajectory will depend on whether or not the global economy and air traffic continue to deteriorate, the company said.
Faury said he expected that despite new blockades, Airbus would continue to generate cash to contain the virus announced Thursday in France and Germany, where Airbus operates.
Nevertheless, the coronavirus crisis has had a strong impact on the company’s results. For the third quarter, the aircraft assumed restructuring costs of EUR 1.2 billion, reflecting the cost of the planned staff reductions.
Airbus recorded a consolidated operating loss of EUR 2.1 billion for the nine months of the year. In the third quarter, turnover fell by 27% to EUR 11.2 billion, due to a 33% decline in the commercial aviation sector. Airbus recorded a net loss of 767 million Euro from July to September, compared to a profit of 989 million Euro in the previous year.
Since the company reduced its dividend for the first time since the Second World War earlier this year, investors have allowed Shell shares to disappear… Credit…CarlCourt/Agence France-Presse – Getty Images
Royal Dutch Shell, Europe’s largest oil company, said Thursday that it will increase its third-quarter dividend by around 4 per cent to 16.65 cents and will continue to raise it by a similar amount each year to attract investors again.
Investors have seen Shell shares plummet since the company first reduced its dividend for the first time since World War II earlier this year. The share price rose by approximately 2% on Thursday.
Ben van Bearden, the company’s CEO, said Shell can afford both increased shareholder payments and the large investments needed to implement its plans to switch from oil and natural gas emissions to cleaner energy sources such as wind, solar and hydrogen. The idea is to make a convincing investment case for Shell, Mr van Beearden said in a statement.
Shell’s adjusted income was $955 million. In the third quarter, the Company’s oil and gas prices were 80% lower than a year ago due to the Company’s exposure to the coronavirus pandemic.
At a press conference, Mr Van Birden said Shell would significantly increase investment in what he called future business from 11% to around 25% of total annual investments of around $20 billion. These companies include retail, renewable energy and electricity. Van Birden said 2019 is likely to be the peak of Shell’s oil production.
If the sale is approved by Tiffany & Company, it will put an end to a growing legal battle between a luxury jeweler and his buyer, LVMH Moët Hennessy Louis Vuitton.
Tiffany & Company announced Thursday that it has agreed to lower the price of its sale to the French conglomerate LVMH Moët Hennessy Louis Vuitton. An agreement would end the conflict between the companies and seal one of the world’s largest luxury boutiques.
Tiffany and LVMH agreed on a revised price of $131.50 per share versus $135. This will result in a turnover of almost $16 billion, about $400 million less than before. They also reached agreement on the settlement of duels in the Delaware District Court.
Director Tiffany met late Wednesday to vote on the motion.
LVMH has agreed to purchase Tiffany in November 2019 and plans to add the company’s diamond rings and Robin Egg Blue boxes to the stable of the brand which includes Louis Vuitton, Dior and Givenchy. With this acquisition LVMH can strengthen its position in the United States, according to the CEOs at the time, and open up Tiffany to more customers in Europe and China. This step also promised Bernard Arnault, President and CEO of LVMH, the status of a leading trader in the luxury sector.
But the French luxury giant became increasingly nervous about this largest store so far, when the pandemic devastated the retail sector. Six months before July, Tiffany’s sales fell by nearly 40% and the company recorded a loss of more than $30 million. The shares of the company were far below the transaction price because investors doubted LVMH’s determination to take over the company.
The deadline for closing the transaction was extended by three months in August, after which LVMH threatened to abandon the acquisition in September, accusing Tiffany of poor financial results and breaching the acquisition agreement. Moreover, and unusually, LVMH stated that the French Government had asked it to suspend the takeover because of the trade dispute between the United States and France.
Tiffany sued LVMH in Delaware to force the company to close the deal. After further legal disputes over the pilot scheme, the trial is scheduled for early January. Maybe you don’t need this.
The New York Stock Exchange. American stocks plummeted on Wednesday as fears of a new wave of the pandemic in Europe and parts of America grew. A loan… Spencer Picture/Getty Pictures
- Forward contracts on US stocks fluctuated on Thursday as traders received information about the state of the US economy. The S&P 500 index had its worst day in months on Wednesday and volatility reached its highest level since June, after new blockades in France and Germany revealed the fragility of the pandemic’s economic recovery. European shares hesitantly made up some of their losses on Thursday morning.
- The Stoxx Europe 600 Index rose by 0.3% after falling almost 3% on Wednesday. In Germany, the DAX index rose by 0.4%, while the CAC index in France and the FTSE 100 index in the UK rose by 0.3%. In Japan, the Nikkei 225 closed 0.4% and the Yen rose 0.2% against the US dollar after the Bank of Japan maintained its previous policy but revised its forecasts for economic growth and inflation.
- The US report on the third quarter of GDP published on Thursday showed the fastest quarterly growth, but an incomplete recovery, with the economy still a few percentage points below its pre-pandemic level. The Ministry of Commerce announced that gross national product increased by 7.4% in the third quarter.
- The European Central Bank will announce its final policy decision next Thursday. The resurgence of the pandemic in the euro area has prompted the governments of the country’s major economies to re-introduce large-scale blockades, close hotels and leisure facilities and encourage people to stay at home until November. This could put additional pressure on policy makers to strengthen monetary incentives.
- Lloyds Banking Group shares rose three percent after the lender reported a pre-tax profit of more than £1 billion ($1.3 billion) in the third quarter as a result of increased demand for mortgages and expected lower loan losses. Royal Dutch Shell’s share rose 2% after the oil and gas company returned to profitability in the third quarter and announced it would increase dividends to shareholders.
Copper on Wednesday in Bordeaux, France. French officials expect the new blockade to have serious consequences for many companies. Credit… Philip Lopez Press Agency/France – Getty Pictures.
France was preparing for another blow to its beleaguered economy when President Emmanuelle Macron reinstated the national blockade until December to prevent an alarming increase in coronavirus diseases from getting out of hand.
Mr Macron said on Wednesday on television that the virus had spread rapidly throughout France and that the only solution to contain the pandemic was to ask companies to close their doors and provide shelter for people at home. He pledged substantial financial support to avoid a wave of bankruptcies and redundancies that would hit the second largest economy in the euro area.
You can’t have a thriving economy if the virus is circulating in the country, he said.
The new blockade, which begins Thursday night, will still allow key sectors to continue to operate and will not be as tight as the two-month national quarantine at the beginning of the year, when the entire country was closed down, Macron said.
However, he acknowledged that this would have serious consequences for companies that had already become rich as a result of previous restrictions in the fight against the virus.
France is expected to show a growth spurt in the third quarter of Friday, as the summer holidays contributed to a temporary economic recovery.
But these figures are likely to be overshadowed by a new blockade, economists warn. The government has estimated that 60 billion euros are blocked every month that a full blockade is active.
Macron did not want to be there, said Mujtaba Rahman, managing director Europe of the Eurasia Group in London, in a note to customers prior to the announcement. He had already hoped to celebrate the economic recovery after the first blockade.
Vulnerable sectors are likely to continue to decline, including retail trade, aviation, tourism and hotels, which account for more than 10 percent of economic activity. In Paris alone, for example, hotel occupancy fell to 26% in September, when a new curfew was introduced, according to the French consultancy MKG. This figure is likely to deteriorate.
Bars, restaurants and unimportant shops will be closed, but students will continue to go to school. Plants, farms and construction sites will remain open, as well as some utilities, to limit the potentially greater economic damage. Earlier, Germany had already announced on Wednesday that restaurants and bars would be closed from Monday.
Last week, French legislators adopted a new EUR 100 billion package to support the country’s economy, on top of the almost EUR 500 billion in financial support announced during the previous blockade. The companies most affected by the new termination will receive € 10,000 per month and their wage bill will be effectively nationalized so that employees who are unable to work can keep their jobs.
Companies that are unable to pay their rent will be rejected, while SMEs will receive additional financial support, Mr Macron said. Teleworking will be an appropriate solution for all companies, said Mr Macron.
The economy can’t stand still, he said.
- Ford Motor reported a significant jump in profits in the third quarter after a year of restructuring and a recovery in sales volume after the pandemic led to the closure of dealers and factories for about two months this spring. In the three months to September, the automaker earned $2.4 billion compared to $425 million in the same period last year. She lost money abroad, but the company’s business in North America and the credit department were good.
- The online lender Social Finance, better known as SoFi, received provisional approval on Wednesday from the national banking regulations that will enable the company to hold deposits and offer consumers a wider range of financial services. The Commissariat has given its prior approval to the articles of association of SoFi, provided that SoFi complies with additional regulatory requirements. In particular, SoFi must apply for membership of the Federal Reserve System and take out deposit insurance with the Federal Deposit Insurance Corporation. These next steps will take at least a few months; the launch of SoFi at the bank will take place in the course of next year at the earliest.
Becky Cooper is the owner of Bounce Milwaukee. She closed the entertainment center in March and still hasn’t opened it. A loan… David Kasnick for The New York Times.
The pandemic has not only weakened the American economy. It has also changed them, at least temporarily – it has almost completely closed some industries, while at the same time causing an increase in demand in other industries.
Consumer spending on goods increased sharply in the last quarter, by almost 10%, which was more than enough to compensate for the relatively moderate decline of 2.8% in the spring. Expenditure on durable goods was particularly high because Americans were in a hurry to purchase cars, recreational vehicles and equipment for their new lifestyle at home.
By contrast, expenditure on services collapsed in the second quarter, down 12.7%, as consumers stopped eating out, exercising and family recreation. Service costs increased by 8.5% in the last quarter, but remain 7.7% below the pre-pandemic level.
Two companies from Wisconsin illustrate the different development of these two sectors.
When the American car factories closed last spring, this meant an immediate loss of business for Husco International, a manufacturer of hydraulic and electromechanical components for cars and other equipment. The company reduced production and released many of its employees.
But at the end of May the car factories started up again and Husco’s company started to flourish. September was the best month in the history of the automotive department.
Austin Ramirez, the company’s president and CEO, said he continues to expect sales to decline by about 10% over the year. Despite the good results achieved in September, the pandemic and the resulting economic weakness are leading to a further decline in demand. And the virus causes other complications that lead to more absence of employees. But the damage to his business is not as great as it was during the last recession ten years ago.
In a cyclical sector like ours, it’s actually a fairly mild recession we’ve managed to manage, Ramirez said.
It’s a different story for Becky Cooper. Bounce Milwaukee, a family entertainment centre that she owns with her husband, was closed in March and has not yet opened. In the summer they experimented with selling take-away pizzas and offered to stop at the cinema in the parking lot, but the sale was not enough to cover the costs.
Employees began the year dreaming about what they would do after repaying the loan to run a small business they had started six years ago. Instead, they had to clear their bank accounts and create more debt to cope with the pandemic. With a wave of coronaviruses in Wisconsin, they don’t know when they’ll be able to welcome their customers again – or whether they’ll be able to keep up until then.
I look at these numbers and I feel so helpless, Miss Cooper said. At the beginning of March I feel almost insanely optimistic and I don’t see how much of the past we could have let go of.